There was no protectionism involved in a jewellery exhibition fiasco, the foreign affairs secretary assures traders Switzerland's state secretary for foreign affairs expressed regret yesterday about the row that erupted over Hong Kong's participation at the Swiss watch and jewellery fair during the Sars outbreak. Franz von Daeniken said he wanted to assure Hong Kong that there would be more communication between the two governments to avoid further misunderstanding and hard feelings. Speaking to the South China Morning Post on his first visit to the city, Mr von Daeniken said Switzerland was not afraid of competition and described the relationship between the Hong Kong watch and jewellery industry and that of his country as complementary. On April 2, the Swiss government issued a decree ordering all 317 Hong Kong exhibitors to the World Watch and Jewellery Show in Zurich to undergo medical checks before being allowed to enter the exhibition hall. To protest against the decree, all Hong Kong exhibitors pulled out of the fair and later held a protest in Central. They believed the complicated medical examination, which would have taken several days to complete and left them only four days to do business at the fair, was a protectionist measure aimed at one of the country's biggest exporting rivals. But Mr von Daeniken denied the health check decree was disguised protectionism. 'It was exclusively based on public health concerns,' he said. 'Why should Switzerland resent Hong Kong? Hong Kong is of vital importance to us. You are, after Japan, our second-most important trading partner in Asia. 'Maybe the way we handled the Sars outbreak was very Swiss. We are a very orderly and stable society and used to dealing with everything predictable. 'At that time, we had very little information [about Sars]. We were very worried and knew that we needed to take swift measures to prevent the spread of Sars.' But Mr von Daeniken said that while components of many Swiss-made watches came from Hong Kong, one-third of the country's exports to the city were watches, and the two places were targeting different markets. He also said his visit had no relationship to Hong Kong's threat of taking the issue to the World Trade Organisation for dispute settlement. The state secretary said that Hong Kong's Trade Development Council had decided after the incident to invest in the construction of an exhibition complex in Basel that would house the city's delegation visiting future jewellery and watch fairs. Under the agreement, which will be signed today between the Trade Development Council and Basel World, the organiser of the event, Hong Kong will have an area of its own in the new complex and will have the right to decorate it. Mr von Daeniken said he would not under-estimate the difficulties of his mission in improving the relationship between two sides. 'It won't be easy, but I am very confident that with this visit and the new agreement, Hong Kong businessmen will be able to get over their hard feelings when they return to the trade fair next April,' he said.