International Business: Switzerland's Trade Analysis Report

This report provides an analysis of Switzerland's international trade patterns from 1970 to the present, focusing on the impact of globalization. Switzerland's economy has experienced significant growth, ranking as the 18th largest export economy globally. The report examines Switzerland's key trade...Read More

International Business
Name
Institutional Affiliation
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International Business
Introduction
Since early 1970 to date, Switzerland has experienced a remarkable shift and growth
in its economy. Beginning with which, the country’s GDP has positively improved over the
years. In line with this, more is exported from within as well as imported from other nations
creating a trade balance. Herein, a brief analysis of the patterns of trade of Switzerland is
provided
Putting into consideration various determinants and consequences of globalization
when analysing patterns of trade is imperative. Since 1970 to date, it is beyond reasonable
doubt that trade in Switzerland has tremendously grown. Consequently, this growth has
totally transformed its economy. The country’s economy ranks 18th largest export economy
globally. In 2017 its GDP was $678B while the GDP per capita stood at $64.7k. On the other
hand, $285B was exported from Switzerland and $273B imported. As a result, a positive
trade balance of $12B was experienced (Ortiz-Ospina, Beltekian & Roser, 2018). Gold,
Packaged Medicaments, Human or Animal Blood, Base Metal Watches, Nitrogen
Heterocyclic Compounds are some of the items exported from the country.
Sources of comparative advantage is mostly emphasised in a majority of trade
theories. It states that based on their strengths, for every nation to gain from trade, they ought
to focus in producing things which they are best at producing.
Germany is the largest country that Switzerland exports its goods. Amongst the
various items handled, Pharmaceuticals, Machinery, and Organic chemicals are the most
popular ones. In total, 15.3% of what the country exports, it does so to Germany amounting
to $47.5B. Germany is an important trade partner with Switzerland because they share a
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border, close relationship and united by a common language. Swiss companies employ
around 260,000 people in Germany and 210,000 people are employed by Germany
companies in Switzerland. Over the years, the two countries have had a strong and cemented
trade partnership. In addition, trade transactions involve goods and services (Broadberry and
O’Rourke, 2010). Notably, traded services have resulted to merchandise trade being cheaper
and easier for example shipping services.
The United States comes in either second or third in the list of close Switzerland trade
partners. In 2018 U.S was the second export destination with 13.2% of the total exports
(Kikkawa & Sasahara, 2018). The high ranking of the U.S is attributed to strongest economic
relation that exists between the two countries. There are close to 500 Swiss companies in
United States and the United states is a leading country of origin of foreign direct investment
in Switzerland.
Switzerland also boasts for being a leading exporter to China. Among the products
exported are; pharmaceutical products, machinery, organic chemicals, plastics, iron and steel.
The rise of china in the 2018 list of top trade partners of Switzerland results from increased
demand and also improved international business between China and Switzerland.
In a nutshell, staying at the top require better strategies to be put in place. A lot is
involved. Likewise, Switzerland should apply the same. For the country to maintain its good
stature and top rank in global export economy, it should look into more and better ways to
improve on both its exportation and importation processes. Not only that, but also sustain
amicable trade relationships and ties with other countries.
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References
Broadberry and O'Rourke (2010) - The Cambridge Economic History of Modern Europe:
Volume 2, 1870 to the Present. Cambridge University Press.
Kikkawa, K., & Sasahara, A. (2018). Gains from Trade and the Sovereign Bond Market.
Available at SSRN 3304936.
Ortiz-Ospina, E., Beltekian, D., & Roser, M. (2018). Trade and Globalization. Our World in
Data.
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