Sino-Swiss free trade agreement: how China stands to benefit

By Felix Egli and Wu Fan, VISCHER
0
838

In our last column, we promised to come back in more detail to the Sino-Swiss free trade agreement (FTA) signed on 6 July 2013. As its wording has been published in the meantime, this column and next month’s column will feature how Chinese exporters and investors benefit as of its entry into force (expected on 1 July 2014 at the earliest).

Export of goods

Currently and until the entry into force of the Sino-Swiss FTA, Switzerland has no obligation with respect to imports from mainland China other than the obligation under the WTO General Agreement on Tariffs and Trade (GATT) not to apply customs tariffs higher than most favoured nation (MFN) rates (with respect to imports from Hong Kong, the European Free Trade Association [EFTA] free trade agreement with Hong Kong applies).

Felix Egli 菲谢尔律师事务所 苏黎世办公室 高级合伙人 Senior Partner VISCHER Zurich
Felix Egli
菲谢尔律师事务所
苏黎世办公室
高级合伙人
Senior Partner
VISCHER
Zurich

Nevertheless, following WTO/GATT’s 1979 adoption of the so-called enabling clause, Switzerland autonomously, i.e. without any obligation, adopted a generalised system of preference for de-veloping countries that also fully or partly dismantled tariffs for certain goods originating in China.

The Sino-Swiss FTA converts such unilateral preferences – which China would otherwise have lost as soon as no longer qualifying as a developing country – into binding commitments and fully or partly dismantles the vast majority of the remaining tariffs, including those for textiles and footwear, with immediate effect upon the FTA’s entry into force.

As a result, with respect to goods originating in mainland China listed in Switzerland’s specific preference schedule, Switzerland will in essence, as of the entry into force of the Sino-Swiss FTA:

  • no longer have an option to re-introduce tariffs that have been abolished under the autonomous generalised system of preference, irrespective of whether China continues qualifying as a developing country;
  • abolish with immediate effect almost all remaining tariffs applied to industrial and other non-agricultural/farming/fishing products, including textiles and footwear (appendix 2 to annex I of the Swiss-Sino FTA). As a result, virtually all Chinese goods described in sections V to XXI, in chapters 25 through 97 of the Harmonised Commodity Description and Coding System, are exempted from Swiss customs tariffs; and
  • reduce or abolish the tariffs applied to numerous agricultural/farming/fishing products (covering all goods described in sections I to IV, in chapters 01 through 24 of the Harmonised Commodity Description and Coding System). As a very rough thumb rule, such tariffs are abolished for products which are not, or only insignificantly, competing with correspondent Swiss products (such as tropical products, fish and crustaceans); for those significantly competing with Swiss products the Swiss tariffs are, subject to quite a few exceptions, abolished or reduced, sometimes however only outside Swiss harvest periods or within WTO tariff quotas (such as with certain meat products, cut flowers, vegetables, fruit and fruit juices). For processed agricultural products of a primary export interest for China – in particular sugar, bakery or pasta products and peanut butter – Switzerland committed to reduce the relevant tariff beyond the removal of its domestic industry pro-tection element.

Export of services

Currently and until the entry into force of the Sino-Swiss FTA (expected on 1 July 2014 at the earliest) Switzerland has no obligations with respect to services supplied from mainland China, other than the obligations under the WTO General Agreement on Trade in Services (GATS). With respect to imports from Hong Kong, the EFTA free trade agreement with Hong Kong, in force for Switzerland since 1 October 2012, applies).

吴帆 Wu Fan 菲谢尔律师事务所 苏黎世办公室 顾问 Counsel VISCHER Zurich
吴帆
Wu Fan
菲谢尔律师事务所
苏黎世办公室
顾问
Counsel
VISCHER
Zurich

With the Sino-Swiss FTA, Switzerland and China basically adopted, and partly improved, their general GATS commitment to grant each other MFN treatment and their specific GATS commitments to grant each other, for certain service sectors, reduced or no limitations on market access and national treatment for the cross-border supply of services, the consumption of services abroad, the establishment of a commercial presence for the supply of services and the presence of individuals.

Switzerland’s general commitment to MFN treatment was, compared to GATS, improved by reducing the scope of its MFN exemptions with respect to audiovisual services, computer reservation systems, and sales and marketing of air transport services.

Switzerland’s specific commitments were, compared to GATS, improved in essence by further reducing or abolishing limitations on market access and national treatment for the cross-border supply of certain services and the establishment of a commercial presence for their supply, respectively, in the following sectors: real estate; leasing or renting; outdoor advertising; services incidental to manufacturing or fishing; scientific and technical consulting; telephone answering; duplication services; translation and interpretation; mailing list compilation and mailing; specialty design; agency on behalf of individual performers; design for ergonomic working place; business consulting not elsewhere classified; express delivery of letters and parcels (subject to minimum pricing); enhanced value-added voice transmission; special trade construction work; renting related to equipment for construction or demolition of buildings or civil engineering works; commission agency; education in the fields of Chinese and cooking; sewage; refuse disposal; sanitation and similar services; cleaning services to limit exhaust gases; underwriting of aircraft liability insurance; lead-managing Swiss franc-denominated issues by banks or securities dealers; hotels and restaurants (including catering); tourist guide; maritime transport, including passenger and freight transportation, maintenance and repair of seagoing vessels, maritime cargo-handling, storage and warehousing, customs clearance, container station and depot services, maritime agency, and maritime freight forwarding; air transport, including aircraft maintenance and repair, selling and marketing of air transport services, computer reservation system services, ground handling, and airport management; road freight transportation, excluding cabotage.

Felix Egli is a senior partner and Wu Fan is counsel at the Swiss law firm VISCHER in Zurich

VISCHER_Logo_Swiss_Law_and_Tax

Schützengasse 1

Postfach 1230

8021 Zürich

电话 Tel: +41 58 211 34 00

传真 Fax: +41 58 211 34 10

Felix Egli

电话Tel: +41 58 211 34 90

电子邮件E-mail: [email protected]vischer.com

吴帆 Wu Fan

电话Tel: +41 58 211 36 45

电子邮件E-mail: [email protected]vischer.com

www.vischer.com