The Senate has clearly rejected a ban on the export of weapons and other military material proposed by a pacifist group.
It followed the line of the government and the other parliamentary chamber, the House of Representatives, on Friday with 23 votes to three.
Opponents argued the ban would lead to massive job cuts and was a serious threat for the industry and the Swiss armed forces.
The initiative was tantamount to the abolition of the Swiss army, according to Senator Hans Altherr.
In a similar vein, Economics Minister Doris Leuthard said the proposal was an attack on national security and businesses.
Other speakers pointed out that Switzerland had a restrictive policy on weapons exports.
For his part, Luc Recordon, Green party senator for Canton Vaud, came out in favour of the proposal, saying Switzerland's role was to contribute to global disarmament efforts.
Last year Switzerland exported military material worth SFr722 million ($674 million) to more than 70 countries, including Pakistan, Saudi Arabia, Romania, Turkey and Malaysia.
The initiative was handed in by the Group for Switzerland without an Army. A date still has to be set for a nationwide vote.
swissinfo.ch with agencies
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