Switzerland One-Ups the EU Signing an FTA with China

Written by | Monday, July 7th, 2014
@Eubulletin

Switzerland has signed a free trade agreement with the world’s second largest economy – China – which it managed to do before the European Union had a chance to finalize its own FTA with Beijing. The deal establishing free trade relations between Beijing and Bern, entering into force tomorrow (June 8), is the first FTA that China has signed with a mainland European country. It took two years to negotiate the deal. Switzerland’s Economy Minister, Johann Schneider-Ammann, said in Basel that his country looked to the huge Chinese market while China would find Swiss a reliable partner in keeping its economy on a cutting edge technology level. The agreement is supposed to decrease the amount of red tape needed to pursue business between the two. Moreover, mutual tariffs should also go down while Swiss industrial will be given access to China’s more than a billion consumers. China is already importing Swiss pharmaceuticals, chemicals, and machinery. Experts believe that the new deal could benefit mainly small- and medium-sized businesses and engineering firms, which form the crux of the Swiss economy.
In turn, Chinese producers and manufacturers will get a duty-free access to Swiss primary products, which will become less expensive for companies. Switzerland’s customs service said that customs duty savings could provide a decisive edge compared to those countries which do not have an FTA with China, including the entire European Union. As the Swiss-Chinese FTA comes before an EU-Chinese deal, some experts foresee that Switzerland has the potential to become a center for Chinese firms in Europe, which are increasing their investments on the continent. Surprisingly, the new deal also strengthens intellectual property protection of Swiss goods in China, something that the EU has been trying to achieve for its own FTA for a long time. The FTA is generally seen by observers as a positive sign of China’s commitment to the free global market.

Article Categories:
ECONOMY & TRADE

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