Cheese: Modelling the impact of the UK-Switzerland FTA

The impact of the UK-Switzerland trade deal was examined for cheese, looking at the changes expected after the deal comes into force. This aspect of the modelling work assumes all other factors, except the FTA, remain the same.

Key points

• The model suggests that Switzerland cheese exports to the UK will increase by 884 t (an increase of 60% based on the baseline used within the model 

• The model suggests that UK cheese exports to Switzerland will increase by about 197 t (an increase of 23% in percentage terms on the baseline used within the model) 

• The model predicts that changes to production and price will be relatively small (less than 1%) 

Summary of findings

The chosen network for cheese consists of the UK, EU, USA, New Zealand/Australia and Switzerland.

The EU is the world’s largest cheese exporter and is a key trading partner for the UK. The USA, New Zealand and Australia also export a large amount of cheese around the world. Switzerland also imports and exports a significant amount of cheese.  

The model predicts an 23% increase in UK cheese exports to Switzerland in the first year of a fully liberalised trade scenario, a rise of about 197 t annually.

To put this into context, the UK currently exports about 173Kt of cheese per year globally. The model predicts a slight reduction in the amount of UK cheese sold into the UK market and in the EU.  

The model predicts the Swiss cheese imports into the UK will increase by 60%, a rise of about 885 t annually. There will also be a slight reduction in imports from the EU.

Overall, these changes represent a slight increase in the amount of cheese sold by the UK farming sector by 270 t.  

There isn’t a great deal of change in the domestic marketplace. UK domestic production will rise by about 125 t, an increase of less than 1%. Table 1 details the impact on domestic production, prices, and the total amount of cheese available in both countries.  

Table 1. Modelled changes in the UK and Switzerland of domestic production, prices and total amount of cheese sold 

Limitations of modelling results 

There are a number of caveats to these results.  

The analysis is based on full liberalisation. Switzerland is a highly protectionist country with high tariffs on goods especially meat and dairy. There are currently tariffs on cheese exports to Switzerland and negotiations may focus on reducing these not eliminating completely.  

Like other economic models, the trade network model is not a prediction or forecast and assumes all factors other than UK-Switzerland trade deal remain equal. This is unrealistic in a global economy but is an essential assumption for modelling due to the complexity of predicting future changes. What the network model can do, though, is examine specific ‘what if’ scenarios, and this is something that AHDB will continue to analyse.  

Like other economic models, the trade network model treats all products in a category as homogenous. In reality, we know that there are varying levels of demand for different types of cheese in each market.  

The model does not take into account Sanitary and Phytosanitary (SPS) limitations such as Export Health Certificates (EHCs) and other trade barriers. Read more about trade implications of Non-Tariff Measures (NTMs). 

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Economic modelling of the beef, sheep, dairy and pork sectors