Libya escalates dispute with trade embargo

Observers of the long-running feud between Switzerland and Libya must be wondering, what next?

In the latest installment of the dispute, the Libyan government on Wednesday announced a trade embargo against Switzerland, escalating a standoff that has been ongoing for more than a year.

The development, announced by Libya's Jamahiriya News Agency (Jana), followed a call to Muslims last week by the country’s leader, Muammar Gaddafi, for a jihad or “struggle” against the Swiss, as well as a boycott of goods and services from the alpine country.

Gaddafi said such measures were necessary given the Swiss ban on the construction of minarets, approved by citizens in a referendum last year.

"The General People's Committee (government) has decided on an economic and trade embargo of the Swiss state involving the public and private sectors," the Libyan government said in the statement.

The government said it made the decision in response to Gaddafi’s call.

Tripoli said that Libya would find alternatives for its imports of medicine, medical supplies and equipment from Switzerland.

Officials from the Swiss government declined to immediately comment on the embargo as diplomats continued work to find a solution to end the conflict.

The embargo is not expected to have a major direct impact on Switzerland’s economy.

Swiss exports to Libya amounted to 156 million francs in 2009, just 0.08 percent of the country’s total exports, according to statistics from the state secretariat for economic affairs (Seco).

More significantly, Switzerland relied on Libya for almost a third of its oil imports, which accounted for most of the 718 million francs in total imports from the North African country last year.

Tripoli also issued a warning that it would sever trade ties with the United States unless it receives an apology from the American government over comments made by Philip Crowley, spokesman for the US state department.

Crowley poked fun at Gaddafi’s call for a jihad against Switzerland, saying it reminded him of a speech made by the Libyan leader at the UN General Assembly last September: “ Lots of words and lots of papers flying all over the place and not necessarily a lot of sense.”

The European Union was dragged into the Libyan-Swiss row last week when Tripoli stopped issuing visas to member countries of the Schengen Agreement, which allows for passport-free travel in 25 countries, including Switzerland.

That decision was a response to a blacklist issued by Bern, denying more than 180 high-ranking Libyan officials, including Colonel Gaddafi, from entering Switzerland.

The spat between Switzerland and Libya was initially sparked by the arrest in July 2008 of Gaddafi’s son, Hannibal and his wife by Geneva police in a five-star hotel.

Their arrest followed complaints of mistreatment by domestic workers that were later withdrawn.

The Gaddafi couple was released but Libyan authorities were rankled by the “humiliation” meted out to members of the ruling family.

The publication by the Tribune de Genève newspaper of police photos of Hannibal Gaddafi during the arrest exacerbated the problems.

The Libyan government shut down Swiss businesses in the North African country, detained two Swiss businessmen and withdrew billions of francs from Swiss banks.

In a bid to normalize diplomatic relations, Swiss cabinet minister Hans-Rudolf Merz issued a personal apology last summer for the Gaddafis’ “unjust arrest”.

But the Geneva government objected to Merz’s remarks and backed police actions against the Gaddafis.

However, the cantonal government has been put on the defensive over the publication of the police photos of Hannibal Gaddafi.

After a five-month probe into the leak, the cantonal attorney general Daniel Zappelli acknowledged this week that investigators are having difficulty making headway.

Among other problems, Swiss legislation makes it difficult to track down telephone and computer records from the police department if they are more than six months old.

Hundreds of police officers would have had access to the photos, Zappelli told Le Temps newspaper.

“This case is a priority. But the investigative work is monumental.”

Against this background, hopes seem remote for the early release of Max Göldi, the Swiss businessman who began serving a four-month jail term in Libya for visa irregularities last week.

Göldi’s family this week appealed to the Libyan government for a pardon to bring an end to his 19-month detention in the country.

Against all appearances, Tripoli maintains his arrest and the confinement of another Swiss businessman Rachid Hamdani – released last week – had nothing to do with the row with Switzerland.