Workshop on International Law, Natural Resources and Sustainable
Development
Swiss-ploitation? The Swiss Role in Commodity Trading
Alex Cobham (co-authored with Alex Prats)
Centre for Global Development
The extent to which commodity-exporting developing countries are able to benefit, both
through their trade balance and through taxation, depends in large part on appropriate
patterns of trade pricing internationally. This paper assesses the role of Switzerland, as the
leading hub for global commodities trading, to assess whether there may be systematic
distortions in pricing. Specifically, we analyse patterns of prices received by original
exporting countries, and subsequently by Switzerland and other jurisdictions. We find
support for the hypotheses Fthat (i) the average prices for commodity exports from
developing countries to Switzerland are lower than those declared for exports to other
jurisdictions; and that (ii) Switzerland declares higher (re-)export prices for those
commodities than do other jurisdictions. This pattern implies a potential capital loss for
commodity exporting developing countries, and we provide a range of estimates of that loss
– each of which suggests the scale is substantial (the most conservative is around $8 billion
a year). We argue that this issue merits greater research and policy attention