Chinese Premier Li Keqiang (L, front) is welcomed by Swiss Vice President and Foreign Minister Didier Burkhalter, upon his arrival in Zurich, Switzerland, May 23, 2013. Li Keqiang arrived here Thursday evening for an official visit to Switzerland. (Xinhua/Ju Peng)
China is close to signing a free trade agreement (FTA) with Switzerland, the first pact of its kind between the country and continental Europe, after the two sides inked a memorandum of understanding (MOU) Friday on concluding their bilateral FTA negotiations, Xinhua reported.
The MOU was signed in Bern during a meeting between China's visiting Premier Li Keqiang and Swiss President Ueli Maurer, according to the Xinhua News Agency. The establishment of a mechanism for talks on finance was also announced.
"I hope we can sign our FTA on the occasion of my confirmed visit to Beijing in mid-July," Johann Schneider-Ammann, Switzerland's economy minister, was quoted by Reuters as saying Friday.
The FTA may help the world's second largest economy to further tap the European market where rising trade friction has caused uncertainty for Chinese investors, experts said.
"The completion of the Sino-Swiss FTA talks marks a breakthrough in China's FTA efforts with the world's major economies, which may help pave the way for talks with other European economies," Huo Jianguo, director of the Chinese Academy of International Trade and Economic Cooperation, a think tank under the Commerce Ministry, told the Global Times Sunday.
Iceland became the first European nation to sign a free-trade deal with China in April. But the Swiss economy is much larger, so the Sino-Swiss free-trade talks are more important, Huo noted.
The FTA will be mutually beneficial for both countries, He Weiwen, co-director of the China-US-EU Study Center under the China Association of International Trade, told the Global Times Sunday.
It will help in expanding China's imports in industries such as high-end machinery manufacturing and pharmaceuticals, which Switzerland is well known for, and will boost the Swiss economy as well, He noted.
The iconic Swiss watch-making industry will see a more modest benefit from the FTA, He said, as prices of the luxury goods will remain higher in China than overseas even if tariffs come down.
The agreement will cover various fields, including the environment, cooperation on labor and employment, intellectual property rights, and government procurement information exchange, Chinese Commerce Minister Gao Hucheng said Friday, according to Xinhua.
Under the pact, Switzerland will offer zero tariffs for 99.7 percent of China's exports, while China will promise zero tariffs for 84.2 percent of imports from Switzerland, according to Gao.
Experts also addressed the difficulties facing China's free-trade talks.
Even though China has made considerable progress in opening up its trade sectors, the nation's restrictions on foreign investment may continue to cast a shadow on its FTA talks with Western economies, Huo said.
China is currently Switzerland's third largest trade partner after the European Union and the US, while Switzerland is China's seventh largest trade partner in Europe and the sixth largest source of foreign direct investment, according to official statistics.