China-switzerland Free Trade Agreement Signed-news Fh

On July 6, China and Switzerland signed a bilateral free trade agreement as scheduled. An economic delegation, including the Swiss Watch Industry Federation (FH), led by the Swiss Federal Councillor and Minister of Economy Johann Schneider-Ammann, and the Chinese Minister of Commerce Gao Hucheng officially signed a free trade agreement in Beijing. The agreement is expected to enter into force in mid-2014.
The impact of the agreement on the Swiss watch industry can be summarized as follows:
First, according to the statistics released by the General Administration of Customs, the watchmaking trade between the two countries as a whole is dominated by Switzerland’s entry into the super, which has been going on for many years. In fact, the total number of Swiss watches exported to China in 2012 was 1.653 billion Swiss francs, while the same type of watches imported from China during the same period totaled 740 million Swiss francs.
By value, finished watches account for 98% of Swiss exports to China. According to the terms of the agreement, tariffs on these types of watches will either be eliminated in the next 5 to 10 years, or depending on the type of product, tariffs will be reduced by 60% over a period of 10 years. After the agreement enters into force, it will first implement a tariff reduction policy of 18%.
More precisely, three types of watches, namely precious metal automatic watches, ordinary metal automatic watches and non-digital display quartz watches (only these types account for more than 90% of the total export value), will be reduced by 60% from tariffs Benefit. Specifically, the tariffs on these products will fall from the current level of 11% to 12.5% ​​to the level of 4.4% to 5% at the end of the adjustment period.
Measures to eliminate or reduce tariffs in the future will apply to other products in the watchmaking industry, such as alarm clocks, movements, external parts, accessories, etc. Only the 20% tariff on bracelets exported to China and made of precious metals remains unchanged. In 2012, these products accounted for less than 0.05% of total Swiss exports.
The positive chain effects of the agreement on the Swiss watch industry, including the benefits to other export sectors, go beyond tariffs. Other elements of the agreement include provisions to protect intellectual property rights and promote investment, creating another institutional framework that places trade on a more secure and legal basis. For the Swiss watch industry, the most important thing is to improve the protection of trademarks and appellations of origin (made in Switzerland).
China, as the third largest partner of the Swiss watch industry, has become the fifth Asian country to sign a free trade agreement with Switzerland or EFTA (European Free Trade Association). The previous four countries and regions were Singapore, South Korea, Japan and Hong Kong.
Source: FH