Webinar: Early Swiss Trade Diplomacy in East Asia

Tokyo (SCCIJ) – More than 40 members and guests participated in the first webinar ever in the history of the Swiss Chamber of Commerce in Japan. Pascal Lottaz, Assistant Professor at the Waseda Institute for Advanced Study, presented fascinating insights into the beginnings of Swiss trade diplomacy in East Asia. Full recording available here!

Pascal Lottaz of Waseda University presents the SCCIJ’s first talk as a video conference.

The webinar topic was supposed to give the SCCIJ membership and the webinar participants a break from the overwhelming dominance of the virus topic. The following is a short summary of some of Professor Lottaz’ main presentation points. The Swiss political scientist specializes in research about neutrality, history, and international relations.

Different trajectory

“I think it is safe to say that trade has always been the backbone of Swiss-Japanese relations,” Professor Lottaz laid out his main argument at the start of this webinar. “But Switzerland is a bit of a different case from some of the other countries who started trading with Japan early on.” First, the Swiss did not have the same power projection capabilities of other colonial powers although the country benefited from the same kind of environment. Second, Switzerland also had no interest in East Asia as a military outpost or as a place to dominate local population. Its merchants were interested in these territories mainly as market places.

The bilateral relationship with Japan officially started with the friendship and commerce agreement in 1864. The speaker described this as surprising because until 1862 Switzerland had no diplomatic representation in East Asia at all: “But within two years, it opened four consulates, one in Manila, one in Batavia (Dutch East Indies) and then two in Japan, in Yokohama and Nagasaki. So why was that?”

Early export surge

The business community in Switzerland said already in the 1830s that consulates in East Asia would be needed. “In 1851, this point was discussed again in Berne,” Professor Lottaz told his audience. But the Commerce and Customs Department said at that time that it did not want to open consulates in places with few Swiss people “where consular capacities grant the appointee effectively a monopoly of influence on commercial activities”. This statement reflected the fact that Switzerland’s consuls abroad were almost exclusively business people, mostly the heads of a trading company. “Consulates represented Switzerland, but they were mainly there to facilitate trade.”

When, in 1854, the gun boats of U.S. Admiral Perry forced Japan to open its borders, the government Tokugawa Shogunate concluded trade agreements first with the United States (Treaty of Kanagawa) and by 1868 also with other colonial powers like the Netherlands, Russia, Great Britain, and France. Their treaties became the template for all other countries in the 1860s. Portugal joined the club first, Prussia followed in 1861, Switzerland began diplomatic relations with Japan in 1864, Belgium in 1866 und Italy in 1867.

Ambitious pioneer

But the speaker emphasized that Switzerland had attempted to negotiate a treaty with Japan as early as 1859, something he says was really quite remarkable. “Why am I so excited about this? Because Japan concluded the first treaties with the big colonial powers who came with a lot of ships, had a lot of trade interests all around the world, and used a lot of gunboat diplomacy. And then right behind them comes this tiny, landlocked Alpine nation, which doesn’t even have a commercial fleet or any gunboats, but says, hey, we want to do the same,” the speaker explained glaringly.

As another interesting point in this context, Mr. Lottaz pointed out that Swiss diplomacy was organized as a “militia system”. This meant that Swiss diplomacy was done by business people hired for this purpose but pursuing their business interests. In 1866, Switzerland operated 77 honorary consulates around the world, meaning there were 77 companies whose top management was functioning as Switzerland’s consuls, even in the United States.

Machinery and textile exporter

The speaker reminded his audience that Switzerland had experienced a short civil war in 1847. But this young nation produced already high value-added goods like machinery and textiles that needed a lot of expertise. “Surprisingly, its gross national product was quite reliant on export markets,” the speaker said. “Switzerland had a share of about 1% of the entire European population, but it was responsible for 4-5% of European exports in non-European markets. And the export value that it created per capita was two to four times higher than what other colonial powers created.

Comparatively, Switzerland was more dependent on foreign markets than the other countries,” he said. Hence, the Swiss exporters were excited after the U.S. gun boats entered the Bay of Yokohama. “The last big country with locked doors was opening up.” In reaction, Mr. Aimé Humbert, a very important politician in the canton of Neuchatel and also the president of the Organization of the Watchmakers Union, sprang into action.

“He was one of the people that some historians today refer to as “federal barons,” or in today’s parlance, oligarchs”, the professor said. They were industrial magnates who had power over a lot of industrial production and thus political influence. “Between 1850 and 1870, you had a moment in Swiss history when the system worked very differently from today. And you had a group of people that could impose their will quite strongly. And one of them was the Watchmaking Industry Initiative.”

In 1859, Humbert hired the young Rudolf Lindau, gave him a semi-official status, and sent him to Japan. Lindau stayed for a couple of months, but the military government in Edo declined a trade treaty with Switzerland. “The Japanese said they do not want a trade agreement with a landlocked, tiny little country because if they give it to them, then they cannot reject anyone else,” the speaker said. “The shogunate was afraid of too much trade, not too little. So his mission unfortunately failed.”

Early long-term view

But Switzerland succeeded five years later. In 1864, the Swiss company Siber, Brennwald Co. was founded in Yokohama, known today as DKSH. In the meantime, the federal council had to sell the treaty in parliament to get it ratified. “The council argued that the contracts with Japan that are currently in effect should be understood much more as introductory steps towards future agreements than as remaining instruments for the transport of trade with that country,” the speaker recounted. “In contrast, it could be expected with certainty that in the future, the more and more evolving civilization in that country will develop trade, which will bear plentiful fruits for our efforts.”

Professor Lottaz summed up his feelings: “The government of Switzerland did not say: Now finally, we can trade so much. They were more like: This is going to take time, but the time it will take will be worth it, because, in the long term, we believe that trade with Japan will be good. I find that intriguing.” This long-term attitude in the Swiss government paid off and has turned Japan into Switzerland’s second-largest trading partner in Asia.

For a full account of this story please see: Lottaz, Pascal. “Going East: Switzerland’s Early Consular Diplomacy toward East and Southeast Asia.” Traverse: Zeitschrift für Geschichte – Revue d’Histoire, no. 1 (2020).