Major boost for Swiss watchmakers with Chinese free trade deal

The Swiss and Chinese governments have come to an agreement on an updated free trade deal, a major boost for Swiss-made products, as China is the country’s third largest trading partner.

China’s commerce minister, Wang Wentao, and Switzerland’s president, Guy Parmelin, announced the successful conclusion of their negotiations yesterday.

The outcome is that 99.8% of Swiss exports will be duty free when shipped to China, which is an improvement on the existing deal, where only about half of Swiss exports to China are duty free.

Swiss watchmakers will be hoping that the new terms act as a fillip for the export of luxury watches to China, as data from the Federation of the Swiss Watch Industry has shown that the value of watch exports to the country has been low and declining for several years.

Under the previous 2014 trade agreement, Chinese import duties on Swiss watches were only reduced by 60% over 10 years, leaving remaining tariffs of roughly 4.4% to 5%. China’s separate 20% luxury consumption tax on high-end timepieces remains, however.

According to figures from the Swiss customs office, total bilateral trade between the countries amounted to CHF 51.2 billion last, which was up from CHF 31.7 billion in 2015. Only Germany and the United States represent bigger trading partnerships for Switzerland.

The deal is expected to be formally signed later this year, at which point a domestic approval process will take place in both respective countries.