Swiss Economics Minister Johann Schneider-Ammann and the Chinese Minister of Commerce, Gao Hucheng, signed a bilateral free trade agreement on Saturday, July 6, in Beijing. The agreement is expected to go into effect in 2014.
The comprehensive agreement, signed after several years of negotiations, will improve Switzerland’s ability to export goods and services to the rapidly growing Chinese market. China is the world’s second largest economy after the United States, and one of Switzerland’s most important economic partners.
In 2012 Switzerland exported goods to China valued at CHF7.8 billion ($8.1 billion), representing 3.7% of total Swiss exports. Imports from China were valued at CHF10.3 billion.
Give and take
In an interview published Saturday in the Zurich-based newspaper Neue Zürcher Zeitung, Schneider-Ammann said Switzerland is happy with the agreement because it «brings significant improvements for the majority of the trading volume».
According to Schneider-Ammann, the customs charges on 93 per cent of goods exported to China will be reduced or eliminated. For example, charges for watches exported to China are expected to drop by 60 per cent.
And to the benefit of Swiss agriculture, charges on products imported from China will remain.
To their advantage, the Chinese were able to negotiate transition periods of 5 to 10 years – and in some cases 15 years – for the reduction of many customs charges.
The Economics Minister acknowledged that the Chinese are tough negotiators and «didn’t give us any gifts. But we didn’t give them any gifts either.»
Among the issues addressed by the agreement are trade in goods and services, protection of intellectual property, investment promotion, competition, transparency in public procurement, economic and technical cooperation, dispute settlement procedures, and trade-related environmental and labour issues.
New opportunities
The Swiss Trade Association (sgv), which was represented at the signing of the agreement in China, sees it as a big chance for Switzerland’s small and medium-sized businesses.
«Chinese businesses will come to Switzerland, and vice versa,» said the association’s director, Ulrich Bigler. «This creates new opportunities for cooperation.»
According to Bigler, the association wants to promote this collaboration through the founding of a Swiss-China Centre in the Zurich headquarters of the Swiss Stock Exchange.