On Friday, the Swiss government announced it had signed off on the text of the new agreement it said should form the basis of business and trade relations between the two countries after the UK quits the European Union.

“This agreement guarantees, as far as possible, the continuation of the economic and commercial rights and obligations arising from the agreements between Switzerland and the EU,” the Swiss Federal Council said in a statement.

Trade between Switzerland and the UK was worth 17.5 billion Swiss francs (€15.5 billion) last year. The UK was Switzerland’s sixth biggest export market in 2017 and its sixth largest direct investor in 2016.

Text still under wraps

The text of the new agreement remains under wraps for now because the UK is officially barred from negotiating with third countries until it leaves the EU.

But behind the scenes, there have been extensive talks between Bern and London and the arrival of the agreement won’t surprise observers in the Swiss and British business communities.

Those talks come in the context of a determined push to ensure there is as little disruption as possible in bilateral relations because of Brexit.

At present, these relations are chiefly based on a package of agreements between Switzerland and the EU. But after Brexit, those agreement will cease to apply and will need to be replaced.

Free movement of persons

Alongside the trade agreement announced on Friday, Switzerland has also been working with the UK towards a new free movement of persons agreement.

According to the Swiss government, this should protect the rights of British residents in Switzerland and Swiss citizens living in the UK after the 1999 bilateral agreement on the free movement of persons (AFMP) between the EU and Switzerland ceases to apply post-Brexit.

Timing of the new agreement

Meanwhile, the timing of the implementation of the new post-Brexit trade agreement depends on whether the transition period agreed to between the UK and EU comes into force. If that is the case, the treaty would be the basis for trade relations after the transition phase ends on December 31st 2020.

But the Swiss government has also made plans for a so-called “no-deal scenario”. It says that if there is no transition period, the new agreement “makes it possible to replicate in substance the vast majority of trade agreements that currently regulate relations between Switzerland and the UK”.

However, the Swiss government has elsewhere sounded a note of caution by saying that the “fall-back” solution triggered by a “no-deal” situation could not “guarantee the continuation of the current level of treaty relations, especially in the harmonised areas”.

The Swiss business federation economiesuisse reacted positively to news of the agreement. Both countries had done their homework and had “sorted out what could be sorted out at this stage,” the federation’s head of foreign trade, Jan Atteslander, told Swiss daily Tages Anzeiger.

News of the trade agreement between the UK and Switzerland, which will need to be approved by the parliaments of both countries, comes just a week after the Swiss government published the text of a draft deal designed to govern bilateral relations between Switzerland and the EU in the years to come.

That draft deal is the result of years of negotiations. The Swiss government hopes the parliament will approve the deal after a consultation process, but there is opposition from both left-wing and right-wing parties in the parliament.

Read also: What you need to know about the new draft Swiss–EU deal