Europe

China seals first free-trade deal with Switzerland

  • 24 May 2013
  • From the section Europe
Chinese secretary of trade and Swiss economy minister sign memorandum of understanding of free trade on 24 May
Image caption Bilateral trade between China and Switzerland is worth $26bn

China has signed the framework of a free-trade agreement with Switzerland, which could become Beijing's first such deal with a major Western economy.

The signing ceremony took place during an official visit by Chinese Premier Li Keqiang to Switzerland.

Bilateral trade between the two countries is worth $26bn through imports and exports of watches, medicines, textiles and dairy products.

Mr Li said he hoped the deal would be felt beyond Switzerland's borders.

"This free-trade deal is the first between China and a continental European economy, and the first with one of the 20 leading economies of the globe," Mr Li told reporters after the two countries signed the preliminary agreement.

"This has huge meaning for global free-trade," he added.

For his part, Swiss President Ueli Maurer described the agreement as a "real milestone".

China is Switzerland's third biggest trading partner after the European Union and America, with exports to China of watches, pharmaceuticals and machinery amounting to over $22bn.

It is no coincidence that China's premier made Switzerland his first stop on his brief European tour, the BBC's Imogen Foulkes in Berne says.

China has hinted it could also make Switzerland its financial centre of choice, if Beijing allows offshore trading of its currency, the yuan, she adds.

High-level figures in Switzerland's watch-making industry are viewing the deal positively, hoping it will reduce China's import duties on watches from 16% to 12%.

""It will give a legal framework to our cooperation," Jean-Daniel Pasche, the head of Switzerland's main watch federation, told AFP news agency.

China is also looking to sell Switzerland more textiles and agricultural products.

The agreement still needs to be cleared by both chambers of the Swiss parliament before it can be ratified.

Mr Li, who is on his first foreign trip since becoming premier in March, is due to visit Germany on Saturday.

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