Switzerland has signed a much anticipated free trade agreement with China, which it is hoped will clear the way for improved sales of Swiss watches in China.
Federal Councillor Johann Schneider-Ammann and the Chinese Minister of Commerce Gao Hucheng signed the bilateral free trade agreement between China and Switzerland in Beijing on Saturday.
The agreement is expected to take effect in 2014.
The free trade agreement covers a range of sectors and issues and within it, should see China cut import duties on Swiss watches by 60% over the next 10 years, which it is hoped will boost the sale of Swiss watches in mainland China.
The deal, which has taken approximately three and a half years to negotiate, will now need to be ratified by the Swiss parliament.
China currently has an approximate 11% import tax on all watches and a 20% luxury tax on watches.
In May, at a press conference, China’s Minister of Commerce was quoted in media reports as stating: "In the first year, we will cut import duties on [Swiss watches] by 18% and then by around 5% annually in the following years. They will be cut by 60% in 10 years."
Jewels and watches are said to account for 32% of Swiss exports to China. The free trade agreement will improve access for exports of Swiss goods and services to the Chinese market and facilitate two-way trade.