Highly vis­i­ble FTA leads to wave of 2-way trade

China Daily (Canada) - - FRONT PAGE - By CECILY LIU cecily.liu@chi­nadaily.com.cn

In the seven months since the free trade agree­ment be­tween Switzer­land and China came into force, it has greatly helped to ac­cel­er­ate business col­lab­o­ra­tion be­tween the two coun­tries.

The agree­ment calls for zero tar­iffs on 99.7 per­cent of Chi­nese ex­ports to Switzer­land, and 84.2 per­cent of Swiss goods sent to China.

“The high pub­lic aware­ness cre­ated in Switzer­land by the agree­ment has led to more vis­i­bil­ity for business op­por­tu­ni­ties for Swiss com­pa­nies in China,” said Alain Graf, di­rec­tor of Swiss Business Hub in China, a gov­ern­ment or­ga­ni­za­tion charged with the pro­mo­tion of ex­ports and in­vest­ments in China.

In­creas­ing num­bers of Swiss com­pa­nies have been turn­ing to China, a trend that is ex­pected to con­tinue as many smaller com­pa­nies be­gin to make full use of the new reg­u­la­tions, Graf said.

“That a lot of en­ter­prises have been start­ing to do so is shown by the ever grow­ing num­ber of re­quests we re­ceive from Swiss com­pa­nies about the agree­ment,” he said.

Switzer­land is the sec­ond Euro­pean state and the third mem­ber of the Or­ga­ni­za­tion of Eco­nomic Co­op­er­a­tion and De­vel­op­ment to sign a free trade agree­ment with China. Ice­land signed a deal in 2013; New Zealand signed one six years ear­lier.

When prod­ucts on which tar­iffs have been re­duced are taken into ac­count, the China-Switzer­land agree­ment cov­ers nearly all Chi­nese ex­ports to Switzer­land and 96.5 per­cent of goods flow­ing the other way.

The agree­ment also cov­ers such mat­ters as col­lab­o­ra­tion on tack­ling en­vi­ron­men­tal is­sues, la­bor and em­ploy­ment is­sues and in­tel­lec­tual prop­erty pro­tec­tion.

Erik Jan­dr­a­sits, trade af­fairs man­ager of Scien­cein­dus­tries, a business as­so­ci­a­tion for the Swiss chem­i­cal, phar­ma­ceu­ti­cal and biotech in­dus­tries, said the as­so­ci­a­tion’s mem­ber com­pa­nies con­sider the agree­ment an im­por­tant step in lib­er­al­iz­ing trade and im­prov­ing in­tel­lec­tual prop­erty pro­tec­tion.

Sonja Wol­lkopf Walt, CEO of GreaterZurich Area AG, said the free trade agree­ment also goes far beyond dis­man­tling tar­iffs by fos­ter­ing col­lab­o­ra­tion in fields in­clud­ing sci­ence, tech­nol­ogy, re­search, ed­u­ca­tion and cul­ture.

In­di­ca­tors from last year show the first pos­i­tive ef­fects, Walt said. The value of Swiss ma­chin­ery ex­ported to China rose 9.1 per­cent in the first 10 months, to 2.3 bil­lion Swiss francs ($2.6 bil­lion) — strong growth com­pared with other sec­tors.

Over­all ex­ports from Swiss com­pa­nies to China rose 11.2 per­cent to 7.5 bil­lion Swiss francs in the same pe­riod, and im­ports from China to Switzer­land rose 7.7 per­cent to 10 bil­lion Swiss francs, of­fi­cial fig­ures show.

De­spite the great op­por­tu­ni­ties the free trade agree­ment presents for both coun­tries, chal­lenges still ex­ist.

Walt said one pos­si­ble prob­lem is that Switzer­land’s in­creased ex­ports of pro­fes­sional me­chan­i­cals, watches, medicines and chem­i­cal prod­ucts to China will put pres­sure on those in­dus­tries in China — and vice versa for la­bor-in­ten­sive prod­ucts from China.

“How­ever, the tran­si­tional agree­ments of the China- Switzer­land free trade agree­ment on sen­si­tive ar­eas will pro­vide space for Chi­nese and Swiss com­pa­nies to adapt to mar­ket com­pe­ti­tion,” she said.

Xu Jinghu, China’s am­bas­sador to Switzer­land, said ear­lier that the agree­ment started to have an im­pact on bi­lat­eral trade re­la­tions even be­fore it came into ef­fect.

The agree­ment will not only help im­prove Chi­naSwitzer­land re­la­tions but will es­tab­lish a model of col­lab­o­ra­tion that could en­cour­age bet­ter re­la­tions with other Euro­pean coun­tries, Xu said.

Ties be­tween China and Switzer­land — po­lit­i­cal, eco­nomic and cul­tural — are now bet­ter than ever, and both sides are search­ing for new ar­eas of co­op­er­a­tion, par­tic­u­larly in sci­ence and fi­nance, she said.

More than 30 Swiss sec­ondary schools have started teach­ing Chi­nese. Last year, more than 800,000 Chi­nese tourists vis­ited Switzer­land, while about 80,000 Swiss vis­ited China, Xu said.

Walt, the CEO in Zurich, said the China-Switzer­land free trade agree­ment is highly sig­nif­i­cant for her coun­try be­cause of the com­ple­men­tary na­ture of their economies.

The agree­ment of­fers many ad­van­tages for Swiss and Chi­nese multi­na­tion­als, as well as small and medium-sized en­ter­prises, she said.

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