- POSTED: 01 Jul 2014 18:46
- UPDATED: 02 Jul 2014 01:51
A watershed free-trade deal between China and Switzerland came into force on Tuesday, the first such accord between the Asian giant and a mainland European economy.
BASEL, Switzerland: A watershed free-trade deal between China and Switzerland came into force on Tuesday, the first such accord between the Asian giant and a mainland European economy.
Marking the start of the Free Trade Agreement (FTA), Swiss Economy Minister Johann Schneider-Ammann and Chinese trade envoy Yu Jianhua presided over a ceremony in the northern city of Basel.
"This is a real chance for Swiss and Chinese businesses alike," Schneider-Amman told reporters.
"Our economy needs access to markets for its goods and services. The Swiss domestic market alone is too small for our economy and our labour market to prosper, and this is the consideration which shapes our foreign economic policy," he said.
"I am convinced that both sides will benefit from this agreement," he added, noting that Swiss industrial and farm goods would benefit from Chinese tariff cuts, while China's industrial products would have duty-free access to Switzerland.
The deal also bolsters intellectual property protection for Swiss goods - a persistent concern for Western firms on the Chinese market, though Beijing has stepped up its battle against the pirates.
Yu, a key FTA negotiator and China's ambassador to the World Trade Organization (WTO), echoed Schneider-Ammann's remarks.
"This FTA is a historic step that will cement our economies," Yu said.
"It will also further help the process of reform and opening," he added.
As the two officials looked on, a crane hauled a shipping container marked "Switzerland-China FTA" from a barge on the River Rhine, symbolising Chinese imports, and loaded another in honour of Swiss exports.
The Rhine has long been landlocked Switzerland's link to maritime commerce, with Basel still accounting for 40 per cent of Swiss exports and 12 per cent of imports.
The FTA was signed in Beijing July 2013, capping two years of talks between China and Switzerland.
The deal is China's second with a European country after Beijing signed an FTA with economic crisis casualty Iceland in April 2013.
Neither Iceland nor Switzerland - whose prosperous economy emerged relatively undented by the crisis - is a member of the European Union.
Beijing has been pressing Brussels for a similar FTA, but efforts on that front are more complicated because China would need to find agreement with the entire 28-nation bloc, and the two sides are locked in a series of tit-for-tat trade disputes.
The European Union (EU) is China's top export market, while China is second to the United States as a destination for EU exports.
But the balance is heavily in China's favour.
While EU exports to China reached a record 148.1 billion euros (US$191.8 billion) in 2013, Chinese exports to the EU were worth 279.9 billion euros (US$382.4 billion).
Switzerland has a relatively narrow trade deficit with China, its third-ranked partner after the EU and the United States.
In 2013, its exports to China were worth 8.8 billion Swiss francs (7.2 billion euros, US$9.9 billion), and Chinese imports, 11.4 billion francs (9.38 billion euros, US$12.8 billion).
Switzerland's top exports to China are precision machinery, pharmaceuticals and chemicals and watches, while machinery and textiles head the list of imported Chinese goods.
With their strong Swiss franc and high labour costs making it hard to beat rivals on price, Swiss firms have long made quality their selling point.
The nation of eight million people is dwarfed by behemoth China, but Yu said the deal represented an equal partnership.
"Switzerland is small. But small is beautiful. The small country is looking for a big market, but the big market, China, we are looking for the quality of the economy. We are upgrading our economy, we are looking for a partnership of quality," he said.
FTAs, including a planned EU-US accord and a proposed trans-Pacific agreement, are solidly in focus as the 160-nation WTO struggles to craft a global treaty on liberalising international commerce, a process launched in 2001.