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SCMP Reporter

LATEST Hong Kong Trade Development Council (HKTDC) figures show that from January to October last year trade between the territory and Switzerland increased by a margin of 12 per cent over the same period in 1991.

  The total value was US$2.025 billion (about HK$15.7 billion).

  Hong Kong's exports to the Swiss continued to grow modestly, reaching US$727 million in the first three quarters of 1992, but the proportion of re-exports - mainly clothing, watches and clocks - grew at a faster rate than domestic exports.

  Re-exports rose by 28 per cent in 1991 and, in the nine months from January to October 1992, were a further 10 per cent ahead.

  Switzerland's exports to Hong Kong amounted to US$1.3 billion in January to October 1992, a jump of 16 per cent.

  At the end of 1991, 19 factories in Hong Kong with Swiss participation were involved in chemicals, watches and clocks, jade and jewellery, clothing and textiles.

  The Swiss economy is expected to grow by 1.1 per cent in 1993, according to the Hong Kong Trade Development Council's Market Profile.

  This is an increase on the 0.2 per cent growth last year and the 0.5 per cent decline in 1991.

  As with most European economies, the long recession has taken its toll.

  But sustained government spending, higher than expected export growth, and success in the inflation battle - bringing it down to 3.5 per cent - has helped prevent the economy from nose-diving.

  Despite this, private consumption was stagnant, there was only a negligible gain in disposable incomes, tight monetary policy forced domestic investment down, and unemployment rose to 3.3 per cent, historically a high level for Switzerland.

 According to the HKTDC report, the short-term prospects are brighter.

  Domestic demand is rebounding, fuelled by an easing of monetary policy, and continuing favourable export conditions throughout 1993 should support further economic recovery.

  The longer term picture is less clear. A significant setback could be that, in a referendum in December last year, the Swiss people voted by a narrow margin to reject a treaty which would have linked them to the European Community (EC).

  Switzerland was a founding member of the continent's other main trading block, the European Free Trade Association (EFTA), which was set up in 1960 as a counterweight to the EC.

  EFTA shared, and still shares, the same ultimate goal as the EC: to create an effectively frontier-free unified West European market.

  This would stretch from the Arctic to the Mediterranean.

     and include all 12 EC nations and the seven EFTA countries.

  The mechanism to achieve this dove-tailing of the two established blocks was supposed to be a third body, the European Economic Association (EEA).

  The EEA was meant to swing into operation on January 1, 1993.

  This was the same date as the effective creation of the EC's own single market, permitting ''the free movement of goods, people, services and capital'', as specified in the Treaty of Rome.

  Switzerland's rejection of the EEA proposal was narrow in terms of sheer numbers but comprehensive in terms of the cantons that make up the Confederation Helvetica.

  Of 23 cantons, 16 voted against the plans, all of them in the German-speaking east of the country, while the French-speaking western cantons were overwhelmingly in favour.



Trade grows in face of the long recession