Switzerland-China: agreement to eliminate customs duties (cross-border guide)

Context

In a nutshell

• Updated trade agreement between Switzerland and China.
• Elimination of tariffs on 99.8% of Swiss exports.
• Estimated savings for exporters of CHF 244 million per year.
• Inclusion of clauses on labour rights and the environment.

Key facts

• What: Revision of the bilateral free trade agreement.
• When: Announced on Thursday, effective pending signature and approval.
• Where: Bern, Switzerland.
• Who: Federal Councillor Guy Parmelin and Minister Wang Wentao.
• Amount: Savings of CHF 244 million per year.
• Percentage: 99.8% of Swiss exports duty-free.
• Percentage: 53.8% of exports currently duty-free.

Federal Councillor Guy Parmelin and Chinese Minister Wang Wentao announced the conclusion of negotiations for an enhanced trade agreement between Switzerland and China. The agreement, formalized through the signing of a memorandum of understanding in Bern, aims to eliminate tariff barriers that still weigh on bilateral trade. According to the federal authorities, the objective is to achieve exemption from customs duties for 99.8% of current Swiss exports to the Chinese market. This milestone represents a significant evolution compared to the current situation, where only 53.8% of Swiss goods benefit from this exemption. Bern estimates that, when fully operational, Swiss exporting companies will be able to achieve estimated total annual savings

Operational details

The analysis of the contents of the new agreement reveals an innovative approach that goes beyond the simple reduction of duties, introducing relevant social and environmental standards. Switzerland, through the work of the SECO (State Secretariat for Economic Affairs), insisted on the inclusion of binding provisions concerning compliance with the conventions of the International Labour Organization (ILO). This is a turning point in trade relations with Beijing, as it is the first time that China has accepted explicit clauses on the protection of workers' fundamental rights within a free trade agreement. At the same time, the chapter dedicated to environmental protection has been defined as one of the most ambitious ever negotiated by both parties. The commitments signed cover strategic sectors such as the transition to cleaner energies and the implementation of models related to the circular economy.

Implications for the national economic system

For Swiss companies, overcoming customs barriers represents a direct competitive advantage, in particular for sectors that have so far suffered partial or total limitations. The watchmaking and pharmaceutical sectors, pillars of the national economy, will benefit from more fluid and less onerous access. It is important to emphasize that the ratification procedure remains an essential step: the agreement must in fact be submitted to Parliament for approval.

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Key points

The path to full implementation of the agreement still requires precise institutional steps before the new tariffs become applicable. Following the signing of the memorandum of understanding, the Federal Council must submit the final text to Parliament for official ratification. No specific dates have been provided for the parliamentary votes, but the government has indicated that the agreement should be formally signed by the end of the current year. For economic operators and workers concerned about the impact of these measures, the procedure includes an analysis phase during which parliamentary committees will evaluate technical details and environmental and social safeguard clauses. Therefore, companies involved in exports to the Chinese market must periodically check official SECO announcements for updates on the entry into force of individual tariff exemption stages.

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