Urs Diethelm

The three main arenas of Swiss-Israeli cooperation are economic, military and scientific. Since the end of the 1990s, Switzerland has expanded its cooperation with Israel in spite of the fact that there has been a marked increase in human rights abuses since the outbreak of the second Intifada, and that the oppression of the Palestinian people has been more exposed to public scrutiny.

Switzerland, as a member of the European Free Trade Association (EFTA) since 1993, has concluded a free trade agreement with Israel. The agreement is actually limited to products from Israel within the 1949 armistice lines. Products from the territories Israel occupied in 1967 are not included, but these settlement products find their way into the European and Swiss market falsely labelled “Made in Israel.” Countries belonging to the EFTA and member states of the EU, who also subscribed to this agreement, have failed to take effective measures against this misleading labelling. Ignoring Israeli violation of the agreement, the Swiss government concluded a new tax agreement with Israel in 2003 in order to encourage bilateral investments.


 Switzerland has an export surplus to Israel, especially in the trade of diamonds, pharmaceutical products and chemicals, machines and clocks. Diamonds account for half of these goods as Switzerland exports twice as many diamonds to Israel as it imports from Israel. Swiss diamond merchants acquire most of their uncut diamonds principally from the African continent, and export them to Israel for finishing. Only some of the finished gems return to Swiss jewellers (for example to the clock and jewelry fair in Basel, now known as Basel World).