On July 6, 2013 China and Switzerland signed the Sino-Swiss Free Trade Agreement ("Sino-Swiss FTA") which entered into force on July 1, 2014. After the Free Trade Agreement with Hong Kong (in force since October 1, 2012), the Sino-Swiss FTA is the second answer to the increasing importance of bilateral trade between the two countries in the past few years.
Switzerland has, with respect to goods listed in Switzerland's specific preference schedule and originating in Mainland China (imports from Hong Kong being governed by the EFTA - Hong Kong free trade agreement), since the entry into force of the Sino-Swiss FTA:
- abolished almost all remaining tariffs applied to industrial and other non-agricultural/farming/fishing products, including textiles and footwear; and
- reduced or abolished the tariffs applied to numerous agricultural/farming/fishing products.
The advantages of the Sino-Swiss FTA may be combined with those of Switzerland's free trade and mutual recognition agreements with the EU and EFTA and, as the case may be, with any of Switzerland's other 27 free trade agreements with 38 other partners, using Switzerland as its "Gateway" to all these countries. However, "Gateway" does not mean that a Chinese company may use Switzerland effortlessly as a transit or passage for its goods destined for the EU, or any other country with which Switzerland has an FTA, profiting from zero tariffs.
How easy or difficult this would be depends on the rules of origin (ROO) in the Swiss FTA with the relevant destination country and should be studied specifically by a legal expert specialising in international trade. Generally, such ROO require a minimal value added created within Switzerland. Chinese companies could export parts and semi-finished products meeting the ROO of the Sino-Swiss FTA to Switzerland at reduced or zero tariff, and process or work on them in Switzerland, or alternatively assemble them with Swiss components in Switzerland to a sufficient extent to meet the ROO requirements for Swiss origin in the Swiss FTA with the final export destination country or countries. The product would then be deemed Swiss made, with all the positive images connotations and effects that carries, and enjoy the preferential tariffs of the relevant FTA when exported to the final export destination country or countries.
Provided by VISCHER law and tax, Lukas Zuest
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