In this impact analysis BAK Economics evaluated the economic consequences of a repeal of the Bilateral I agreements. As the model-based analyses show, the elimination of Bilateral I would have considerable negative economic effects on Switzerland as a location for investment, research, production and exports.
Reduction of GDP growth by a quarter
Termination of the Bilateral Agreements I would have noticeable negative repercussions on Switzerland's growth potential. According to BAK calculations, Switzerland's long-term economic growth would be around a quarter lower without the Bilateral Agreements. The abolition of the Bilateral Agreements would have a particularly negative impact on the productivity and competitiveness of the Swiss economy. The shortage of skilled workers, which is already a problem, would become even more significant in the future due to demographic developments. A loss of Bilateral I, and thus a curtailment of the free movement of persons, would exacerbate this problem. However, this volume effect explains only 1/3 of the expected loss of growth. Negative repercussions on the real economy would also result from the so-called systemic effects (loss of attractiveness as a business location and of investment which goes beyond the significance of the individual bilateral agreements), reduced accessibility, the sidelining of networked EU research framework programmes and increasing technical barriers to trade.
Switzerland's GDP 6.5 percent lower in 2040
Such a continuous loss of growth would become increasingly significant over time and accumulate to a noticeable reduction in the level of GDP. Without Bilateral I, for example, the level of overall economic output would be 6.5 percent lower by 2040. Discounted to today's values, this corresponds to a loss of value added of over CHF 45 billion. The export-oriented sectors would be disproportionately exposed. Above all, the agreement on technical barriers to trade is specifically designed for the manufacturing sector, especially the capital goods industry. In addition, the capital goods industry is (still) disproportionately dependent on Europe.