China-Switzerland trade upgrade a reference point for China-EU trade

Editor's note: Alexandr Svetlicinii, a special commentator on current affairs for CGTN, is an associate professor of Global Legal Studies and program coordinator for Master of Law in International Business Law at the University of Macau, Macao, China. The article reflects the author's opinions, and not necessarily the views of CGTN.

When Chinese President Xi Jinping and visiting Swiss President Guy Parmelin witnessed the signing of a protocol upgrading the free trade agreement (FTA) between their two countries on October 30, it was an event of multifold significance.

The FTA goes back to 2013, when it became China's first FTA with a continental European country. Switzerland was among the first Western countries to recognize the newly founded People's Republic of China and the two nations have maintained diplomatic relations since 1950. This Swiss presidential visit comes when the two countries are celebrating the 10th anniversary of their "innovative strategic partnership," designated in 2016.  

China is Switzerland’s most important trading partner after the EU and the US. In 2025, bilateral trade in goods, excluding gold and other valuables, amounted to around CHF 33.5 billion ($40.66 billion). Switzerland exported goods worth about CHF 15.2 billion to China and imported goods worth about CHF 18.3 billion. Ties with China are also a component of Switzerland’s Asia-G20 Strategy 2025-2028, which aims to deepen cooperation with key Asian partners.  

The most direct change of the FTA upgrade will be seen in trade in goods. Once the upgrade takes effect, products subject to zero tariff will account for more than 99% of bilateral trade value, up from 53.6% under the original 2013 agreement. Swiss goods such as watches, machinery, pharmaceutical products, as well as cheeses and roasted coffee will gain wider access to the Chinese market, while Chinese products including oil-bearing seeds and kernels, vegetable oils and pet food will enter the Swiss market at lower tariff rates.

The upgraded FTA also expands market access in services. China has increased its commitments in sectors of interest to the Swiss economy, including testing and analysis services, financial services, air transport and maritime transport. It is also expected to improve conditions for Swiss companies that are established in China or wish to establish themselves there.  

Today, Swiss companies invest in China across several sectors: pharmaceuticals, industrial engineering, diagnostics, and food and beverages. Business representatives accompanying the Swiss president to Beijing named pharmaceuticals, machinery manufacturing, finance, watches and the green transition as priority areas for expanded investment and cooperation.  

In the upgraded FTA, Switzerland has committed to market access for traditional Chinese medicine, research and development (R&D).

Notably, the upgrade has a new chapter on digital trade, setting out a modern regulatory framework for digital business activities. This is particularly relevant for companies with digital business models or those providing digital services across borders. 

The chapter addresses bulk parcel shipments and consumer protection in e-commerce, and promotes paperless trade in order to reduce administrative burdens. In addition, the environmental chapter of the original FTA has been transformed into an integrated chapter on trade and sustainable development, containing binding commitments on environment and labor. The environmental commitments cover climate change, biodiversity, clean energy and the circular economy; the labor commitments cover the implementation of International Labour Organization conventions.

The FTA upgrade was accompanied by other agreements. China and Switzerland concluded a dedicated agreement on cooperation in labor and employment, as well as an agreement on regulated cooperation in R&D. The two countries agreed on the rules for managing scientific data transfers across borders, which would allow Swiss researchers to exchange research data with Chinese counterparts within a secure legal framework.

The multiple impacts of the upgrade mean, first, it shifts the focus from trade in goods to digital trade, sustainability, services and research, moving toward regulatory alignment and cooperation in emerging fields. It also introduces market access commitments for investments in non-services sectors such as manufacturing.

Second, the agreement is designed to give businesses greater legal certainty and predictability, which should facilitate further economic exchanges between the two countries. At the same time, it preserves the regulatory discretion, so that each trading partner retains room to set its own domestic rules.

In addition, the upgrade has a bearing on the global trading system as it signals support for international trade governed by World Trade Organization rules, at a time when unilateral trade-restrictive measures are proliferating.

Finally, the agreement may be read as a reference point for future China-EU economic relations. At a time of heightened trade tensions, it sends a signal that reduced barriers are possible in bilateral trade and investment relations.

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