China and Switzerland Sign MOU on Free Trade Agreement
May 27 – China and Switzerland have signed a memorandum of understanding (MoU) to conclude negotiations over a bilateral free trade agreement (FTA) on May 24. The FTA, which took nearly three and a half years to negotiate, will be the first of its kind between China and a country in continental Europe, and China’s first with one of the 20 leading global economies. However, the FTA still needs to be officially approved by both governments and is expected to be signed in July when Switzerland’s economy minister visits China.
Both sides have hailed the upcoming FTA as a historic event in bilateral economic and trade cooperation. Swiss media have described it as one of the most important international deals of the past 40 years, while China reckoned it as one of its most comprehensive and high-level FTAs with another country.
According to China’s Commerce Minister, Gao Hucheng, the agreement will cover various fields, including:
- Labor and employment cooperation;
- Intellectual property rights protection; and
- Information exchanges on government procurement.
Moreover, China will offer zero tariffs to 84.2 percent of imports from Switzerland and, in return, Switzerland will offer zero tariffs for 99.7 percent of China’s exports.
China is Switzerland’s third-largest trading partner (behind the EU and the United States) while Switzerland is China’s seventh-largest trading partner in Europe. In 2012, bilateral trade between the two countries exceeded US$23.6 billion.
Chinese Premier Li Keqiang said that while the FTA will directly benefit the two countries, it will also benefit global trade and will further promote the economic opening-up of China to the outside world.
Experts have indicated that the Swiss pharmaceutical, chemical, tourism, engineering and watch-making sectors, as well as food manufactures, will benefit from the deal.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.
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