As of 1 July 2014 the Free Trade Agreement between Switzerland and the People's Republic of China (“FTA”) came into force. Under the terms of the FTA, up to 99% of Chinese exports to Switzerland will be exempted from the tariffs and about 95% of Swiss exports to China will also achieve zero tariffs (over a period from 5 to 15 years depending on the product). The FTA covers the traditional sectors of free trade agreements (such as goods and intellectual property) but especially extends to sensible areas (given the degree of national law protection), such as services, investments and procurement. The FTA also covers rules of origin, competition, environment issues, economic and technical cooperation, institutional developments or labour and employment issues.
In order to fully benefit from the new FTA, companies should review their processes with regard to custom procedures. In particular multinational companies from the EU or the ASEAN region may benefit from the FTA by optimizing their supply chain (e.g. by optimizing supply sources in order to meet the rules of origin or by establishing manufacturing sites in one of the two countries) resulting in significant duty savings.
The 2013 FTA is of strategic relevance for both countries as China is after the EU and the United States Switzerland’s third largest trade partner and it represents an important step for Chinese economic diplomacy in Europe. The agreement will strengthen legal certainty for an economic exchange between the two countries.