Liechtenstein: The Battle
by Mondaq News Alerts
Foreign economic policy plays an important role in the foreign policy of the Principality of Liechtenstein. As Foreign Minister Rita Kieber-Beck declared, "The goal of our foreign economic policy is to create optimal framework conditions for domestic enterprises, so that they can assert themselves successfully on the world markets." To underscore the significance of foreign economic policy in the framework of foreign policy, the Foreign Ministry organized a lecture series this year on the topic of "Foreign Policy and Foreign Trade of the Future". Prominent speakers included EU Foreign Minister Benita Ferrero-Waldner, EFTA Secretary-General Kare Bryn, and former Swiss Federal Councillor Josef Deiss.
The lecture series concluded with a panel discussion entitled "The Liechtenstein economy: European and global challenges". Norbert Frick, Liechtenstein Ambassador to EFTA and the WTO in Geneva, spoke on global challenges; Prince Nikolaus, Liechtenstein Ambassador to the EU in Brussels, discussed the European dimension. Fabian Frick, Member of the General Management of Hoval AG, supplemented the remarks of the ambassadors from the perspective of industry, while Michael Lauber, CEO of the Liechtenstein Bankers Association, contributed the perspective of the financial center.
Foreign Minister Rita Kieber-Beck said that Liechtenstein enterprises should be able to carry out their business activities internationally under the same conditions as their competitors from other countries. Through a targeted foreign economic policy, Liechtenstein should ensure that it belongs to regulatory frameworks guaranteeing fair competition for internationally active Liechtenstein businesses.
Liechtenstein has a highly developed industrial sector, which sells almost all of its products on the export markets. The financial center has expanded from a banking center into a financial services center with globally operating investment undertakings and insurances, exhibiting the highest standards with respect to the quality of services, competence, security, and due diligence. To offer these internationally operating sectors good conditions, the Liechtenstein Government is heavily engaged in the European Economic Area, the European Free Trade Association, and the World Trade Organization, the Foreign Minis
ter stated. In her assessment, the EEA Agreement continues to represent an appropriate basis for structuring Liechtenstein's relations with the EU.
Ambassador Norbert Frick described the pragmatic development of Liechtenstein foreign economic policy over the past decades and summarized the current status in positive terms: "Liechtenstein economic actors has comparatively good cards in the battle for international markets. Access to the economically significant countries in Europe is secured thanks to our participation in the EEA. Market access to other, non-European markets is governed by our WTO membership and, in part, by our EFTA free trade agreements. Thanks to our membership in the WTO, our economic actors in principle enjoy the same market access conditions as our competitors, and Liechtenstein economic interests can be advanced in the framework of an orderly legal system. Given the importance of our foreign trade, Liechtenstein necessarily has a vital interest in reliable international rules."
As Prince Nikolaus emphasized, the current satisfaction with the economic development should not prevent Liechtenstein from asking questions about the future and observing future trends: "I believe that competition in general will become tougher. This is not only due to competition from low-wage countries, especially outside Europe, which are increasingly utilizing their technological progress.
The competition within Europe is also becoming tougher, mainly for a simple reason: The conditions of competition from county to country are moving closer together. This is in part due to the fact that we are increasingly subject to the same legal rules, now that the rather detailed Single Market legislation of the EU allows less differentiation between countries with respect to conditions of competition.
Standing outside this Single Market would not make the problem easier to solve, however, but rather more difficult, since we would likely make the conditions of access for our products in Europe considerably worse. How important the application of these EU rules is for the domestic economic can certainly be seen in the fact that Switzerland, which is not a member of the EEA, often engages in autonomous replication: namely increasing the chance of selling products to its trading partner by adopting the latter's rules, even without full reciprocity."
From the perspective of industry, Fabian Frick, Member of the General Management of Hoval AG, remarked: "Highly-qualified experts are becoming one of the greatest limiting factors for Liechtenstein industry. Without substantial research and development, we will be unable to maintain our strong position. To do so, we need engineers. We should therefore ensure simple recruitment of experts and promote the attractiveness of Liechtenstein for specialized workers.
Cooperation with foreign trade bodies such as the Swiss State Secretariat for Economic Affairs is very useful especially for smaller businesses engaged in export and can facilitate their steps toward export. A closer affiliation with the Austrian foreign trade body would provide additional synergies, especially in the new EU accession countries."
As Michael Lauber, CEO of the Liechtenstein Bankers Association, emphasized, the EU's vision of creating a uniform regulator for the financial sector of all Member States and EEA countries has significant consequences for the Liechtenstein financial center.
In Lauber's view, the position of the financial services sector could encompass three strategies for the future: Showing courage in tackling new challenges, striving for sustainability, and identifying niches. The advantages that Liechtenstein previously enjoyed would vanish due to the EU pressure for more information exchange, so that new challenges should be tackled courageously.
In all measures aimed at changing the existing framework conditions, sustainability should be the goal. Finally, the actors in the financial services center should continue to identify niches, as has already happened successfully in the case of investment undertakings and asset management.