Paris: Swiss Parliament appears to be in a quandary as to how the Swiss defence industry remains competitive while at the same time maintaining a “neutrality” as there are heated debates over waiving a ban on the re-export to Ukraine of Swiss-made weapons.

This is already affecting the local defence industry as war rages in eastern Europe, and by extension is making traditional customers for Swiss arms wary. Or, as a top industry official put it, “we are just losing our market.”

The official, secretary general of the ASD, Swiss defence industry federation Matthias Zoller, said at a recent meeting with Swiss economics minister Guy Parmelin, a dozen CEOs of defence companies had given recent examples of situations in which they had expected to have been asked for requests for proposals from abroad and didn’t get them.

“Some even got letters asking if their company could guarantee that they could share and deliver weapons in case NATO allies had to invoke Article 5 of its founding treaty … but no Swiss company can give this guarantee because Swiss law not only prohibits giving to other countries but also prohibits delivering to countries involved in an internal or external armed conflict,” Zoller said.

So far, there’s no indication the war in Ukraine will spill into a conflict directly involving NATO and its Article 5 mandate to collective self-defence. But while other Western nations have given generously to Kyiv’s military defence, pressure is increasing on Switzerland to, at least, allow Swiss-made arms already sold to foreign militaries to be re-exported to Ukraine.

“Nobody is asking Switzerland to deliver arms directly to Ukraine. We understand that this is not compatible with neutrality,” Frédéric Journès, the French Ambassador to Switzerland said adding that it is “about the re-export of Swiss weapons and ammunition that are in the stocks of our European partners. If these are blocked, that is a problem for Europe.”

The issue is giving lawmakers a headache as they consider the philosophical ideas of “neutrality” and what constitutes a “defensive” against an “offensive” weapon. “If Ukraine loses the war, European security will be at risk,” Journès said. His comments were echoed by Dutch Ambassador Hedda Samson who said she understood the debate over neutrality but that Swiss authorities should explore all possibilities to support Ukraine.

But the Swiss government wants to make sure it cannot be seen to be taking sides — it has been neutral for over 200 years, ever since the 1815 Treaty of Paris — and that military equipment manufactured in this small, land-locked, Alpine nation does not end up in the wrong hands.