China – a magnet for Swiss firms

Swiss companies view the Agreement as being of major importance. economiesuisse has received much feedback and many questions from its members concerning application and use of the free trade agreement, especially in the first several months after it entered into force. Among them were many export-oriented Swiss SMEs. Questions concerned how to navigate the customs and origin-related provisions so as to benefit from the customs duty advantages, such as the correct assessment of tariffs, application of the list rules, proof and verification of origin and direct transport documentation as well as electronic data interchange for approved exporters.

Approved exporters exported more than 52,000 shipments with proof or origin to China in the first year the Agreement was in place, averaging roughly 200 shipments per business day. In May 2016 the Federal Customs Administration wrote to the approximately 2,500 approved exporters registered with 'active' status in the EACNapplication. The number of origin declarations are uploaded to the application monthly averages between 4,200 and 4,500.

Compared to other emerging markets China's import tariffs are relatively modest; therefore non-tariff improvements are a highly important element in market access.

Intellectual property:

The Agreement contains a number of improvements in the protection of intellectual property. This is an area in which Switzerland and China have gone further than the scope of the WTO TRIPS Agreement. Test data is protected for six years and industrial design for ten years, in some cases 25 years. The existing bilateral dialogue on intellectual property issues has also been incorporated into the Agreement. Protective measures are provided already at the border for suspected breaches of intellectual property rights. Compensation for intellectual property violations may be obtained through civil proceedings. Patents on biotechnology inventions are recognised.

Services:

The Agreement builds upon the concepts and rules employed in the WTO's General Agreement on Trade in Services (GATS). A number of horizontal rules (concerning transparency and licensing procedures among other things) have been clarified. This increases legal certainty. The free trade agreement establishes categories of persons for provision of services (company-internal transfers of managers and specialists, highly qualified providers of certain services under temporary contracts, service sellers and business travellers) and outlines the parameters for the work and entry permit procedures for these categories. Measures concerning access to the employment market and permanent residency are not covered by the FTA.

Switzerland and China improved on the GATS in structuring their market access obligations in various sectors. China and Switzerland particularly facilitated the provision of temporary services by installation and machinery repair technicians and airport services as well as certain financial services. China has also eased market access for securities trading.

Review clause:

The Joint Committee on the free trade agreement between Switzerland and China will review the provisions of the Agreement on trade in goods every two years, including the duty concessions lists. The Joint Committee met in Beijing for its last meeting in September 2016.  

Improvements in customs procedures:

The free trade agreement also has a section on trade facilitation obligating the parties to accommodate international standards in structuring customs procedures, to publish relevant data on goods trade and to issue binding disclosure to business entities relating to duty rates and origin.