China-Switzerland Free Trade Agreement

Background

Swiss Federal Councillor Johann Schneider-Ammann and Chinese Minister of Commerce Chen Deming
Swiss Federal Councillor Johann Schneider-Ammann and Chinese Minister of Commerce Chen Deming © Embassy of Switzerland in China

A comprehensive bilateral Free Trade Agreement (FTA) between Switzerland and the People’s Republic of China was signed by Federal Councillor Johann N. Schneider-Ammann and the Chinese Minister of Commerce Chen Deming on July 6th 2013. A bilateral Agreement on Labour and Employment was signed simultaneously by Federal Councillor Johann N. Schneider-Ammann and the Chinese Minister of Human Resources and Social Security Yin Weimin.

Following initial preparatory talks in November 2007, joint workshops in collaboration with the private sector in 2009 and a Joint Feasibility Study in 2010, the negotiations were officially launched in 2011. The Agreement was then negotiated in nine rounds and various intersessional meetings from April 2011 to May 2013. After the signature of a Memorandum of Understanding on Concluding the Negotiations during the official visit of Premier Li Keqiang to Switzerland in May 2013 and the notification of the completion of the internal ratification procedures on April 29th 2014, the FTA entered into force on July 1st 2014 and the Agreement on Labour and Employment on June 9th 2014.

 

 

Benefits

Swiss Federal Councillor Johann Schneider-Ammann and Chinese Minister of Commerce Chen Deming during the signing ceremony of the FTA
Swiss Federal Councillor Johann Schneider-Ammann and Chinese Minister of Commerce Chen Deming during the signing ceremony of the FTA © Embassy of Switzerland in China

The FTA improves mutual market access for goods and services, enhances legal security for the protection of intellectual property rights and bilateral economic relations in general. For the vast majority of bilateral trade, the FTA will dismantle tariffs fully or partially, immediately or depending on transition periods, after 5, 10, 12 or in specific cases 15 years. In the area of technical barriers, sanitary and phytosanitary measures, sector-specific cooperation agreements aim at reducing non-tariff barriers to trade. For trade in services, more precisely defined rules compared to the GATS of the WTO will apply, e.g. for approval processes, as well as improved market access commitments for various services. Regarding intellectual property, the level of protection in selected areas will be improved compared to the multilateral standards of the WTO, including in the area of enforcement. The Agreement also establishes an institutional framework under a Joint Committee for cooperation between the relevant authorities for monitoring the implementation of the Agreement, further develop the Agreement and for resolving specific issues (consultation process, dispute settlement). Furthermore, the FTA covers rules of origin, customs procedures and trade facilitation, trade remedies, investment protection, transparency in government procurement, trade-related environmental and labour issues, economic and technical cooperation.

With such a comprehensive coverage, the FTA establishes preferential trade relations for goods and services between Switzerland and China, facilitates bilateral trade, strengthens protection of IPR and improves the legal security for economic exchange. The FTA goes indeed far beyond tariff-dismantling, fostering cooperation in various fields such as science, innovation, research, education and culture. The FTA enables a competitive advantage compared to other countries, which do not have a FTA with China and prevents discrimination against Swiss economic operators compared to China’s existing and future free trade partners.

Bilateral trade

China is the world’s second largest economy and one of Switzerland’s most important foreign trade partners. China is the largest buyer of Swiss industrial products in Asia and the third largest worldwide (after the EU and the US). In 2018, Swiss exports to China reached CHF 29.5 billion, while Swiss imports from China accounted for CHF 14.4 billion. The main products exported by Switzerland to China include machines and instruments, watches, chemical and pharmaceutical products, whereas imports included machinery, textiles, watchmaking and chemical products. Trade in services is also of utmost importance, as Chinese service providers show increasing interest in Switzerland as a business location and many Swiss service providers are operating in China (including banks, insurance logistics, quality inspection companies and management consultants). 

Rules of Origin

Chinese exporters shipping goods to Switzerland under the bilateral FTA need to apply for the required Certificate of Origin with one of the following approving authorities:

The application may be made online on the respective websites or by letter.

Companies having been granted the status of Approved Exporter may complete an Origin Declaration on an invoice or any other commercial document (which identifies the respective goods) autonomously without going through any approval process for each individual shipment.