"Uruguay and Switzerland — cultural and economic Benefits from new Market opportunities"

Speech by Federal Councilor Christoph Blocher at the colloquium on trade opportunities in the MERCOSUR, Lausanne, April 17, 2007

Speeches, FDJP, 17.04.2007. Both the spoken and the written word are valid. The speaker reserves the right to deviate − even considerably − from the manuscript!

Lausanne. In his speech at the colloquium on trade opportunities in the MERCOSUR, Federal Councilor Christoph Blocher acknowledged both the similarities between Uruguay and Switzerland and the long history of mutual economic relations the countries share. Federal Councilor Christoph Blocher and Minister of Industry, Energy, and Mines Jorge Lepra met on the fringe of the colloquium to exchange ideas. They were discussing energy and, in particular, the possibilities of producing ethanol from wood-based biomass.

Ladies and Gentlemen,

The Swiss Institute of Comparative Law has organized this colloquium. The topic of this colloquium is “Swiss investment in the MERCOSUR.”

1. Uruguay — The Switzerland of Latin America

In terms of history and geography, Switzerland and Uruguay have much in common, so much in fact that Uruguay has often been referred to as the “Switzerland of Latin America.”

Switzerland, much like Uruguay, is a small country, surrounded by the major economic powers of the region it is located in.

Switzerland and Uruguay feature relatively stable and reliable democracies. And both countries share a long history of mutual economic relations.

It was in the nineteenth century that Swiss settlers founded the town of Nueva Helvecia, some 120 kilometers from Montevideo.

In 1860 a Basel bank by the name of Siegrist und Fender purchased farm land in Uruguay. It was not long before the first Swiss citizens moved to Uruguay with the goal of working the land as farmers.

Even as early as back then, and despite the fact that Uruguay is 11,000 kilometers away from Switzerland, Siegrist und Fender did an excellent job of managing landed property and ensuring appropriate living conditions for the settlers.

The bank provided them with farm tools and made certain the local government granted the settlers favorable loans. By the way, this goes to show that things can get done without the Swiss Office for Trade Promotion.

This Swiss settlement was soon to become known for the exceptional quality of its cheese and other dairy products. As transport developed, the farmers began selling their products on an unprecedented scale, notably to Argentina and even to Switzerland.

2. From Cheese to Pharmaceuticals

To this day, Switzerland has been present in Uruguay through businesses whose traditions of excellence contribute to Uruguay’s economical and technological growth.

Today, Swiss companies in Uruguay are key players in sectors such as pharmaceuticals, food, and banking. And they benefit from the liberal economic system of their host country.

The economic relationship between our countries is bound within legal frameworks, of course. It is this legal framework that will be the subject of speeches experts will give throughout this conference.

Without wanting to anticipate these speakers, let me point out two aspects regarding these relations:

Uruguay and Switzerland laid down the cornerstone of their cooperation in 1938: The two countries signed a trade agreement aimed to enhance commercial cooperation. And in 1991, an agreement on the mutual protection of investments became effective.

Furthermore, the Swiss-Uruguayan Chamber of Commerce in Montevideo and the Latin-American Chamber of Commerce in Switzerland have also contributed to furthering trade relations between Switzerland and Uruguay.

3. Future Prospects

To many Swiss investors, Uruguay represents a unique gateway to the MERCOSUR, a point that will be addressed extensively by the distinguished speakers throughout this conference. MERCOSUR is a high-potential economic area which - to echo the title of this conference - is “a market of more than 200 million consumers.”

More generally, trade relationships with Latin America represent a major challenge and opportunity for export-oriented Swiss businesses. Indeed, Swiss export figures for that region have been increasing for many years.

And blessed with abundant mineral resources, Latin America has an enormous potential in terms of economic growth.

It is also noteworthy that the implementation of sound financial and monetary measures has allowed various countries in that region to make significant progress in the struggle against inflation.

What is more, the reduction of obstacles to trade and the subsequent regional economic integration have contributed to the development of economic exchanges.

4. The Legal Environment of Business and Commerce

Today’s conference provides a unique forum for Swiss business enterprises to learn about business opportunities in the MERCOSUR.

I would therefore like to take this opportunity to express my gratitude to the Swiss Institute of Comparative Law for having conceived and organised this conference, a conference where business people and legal professionals meet.

Talking about law, the presence among us of numerous legal professionals is indeed worth noting. After all, investments are only possible in accordance with the rules governing the rights and obligations of all players involved.

Those involved are manufacturers, consumers, employees, bankers, competitors, and governments. Detailed knowledge of all applicable rules is one of the keys to a successful investment.

Today, you will be presented with the opportunity of learning about these rules and legal requirements. Among the topics discussed are:

  • the formation of an enterprise;
  • labor law;
  • rules on lending;
  • investment protection;
  • contract law, tax law, and procedures to repatriate funds.

Ladies and gentlemen, I trust all participants will make the most of this event. Use the information obtained to the benefit of your businesses as well as to the benefit of the Swiss economy at large.

Thank you.