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Key step cleared to Swiss-China free trade deal

25 may 2013, 15:23
Switzerland and China cleared the final hurdle Friday towards a landmark free-trade agreement, as Beijing seeks to underscore its growing global ties via deals with European partners, AFP reports.

As China's Premier Li Keqiang and Swiss President Ueli Maurer looked on, the two nations' economy ministers inked a memorandum of understanding which paves the way for the formal signature, expected in Beijing in July.

"Congratulations!" said a beaming Li as the officials shook hands.

The two sides then went on to ink other economic-focused deals, including one on boosting cooperation between the Swiss and Chinese financial sectors.

"China is our top commercial partner in Asia," Switzerland's Economy Minister Johann Schneider-Ammann underlined earlier Friday, during talks with Li and members of Switzerland's financial sector, a driving force of its economy.

Li earlier lauded Switzerland as a "global financial centre", saying China hoped to learn lessons from it.

China is reforming its financial sector, notably concerning interest rates and trading in its currency in selected offshore centres -- Switzerland hopes to be picked.

Li arrived in the Alpine country late Thursday on the first stop of his debut visit to Europe since taking the helm in March in Beijing's once-in-a-decade power transfer.

On Saturday he heads to Germany, China's main European trade partner.

Unlike Germany, Switzerland is not a member of the European Union, and Li's visit comes a month after China signed a free trade deal with Iceland, which likewise stands outside the 27-nation EU bloc.

The Iceland deal was China's first with a European country, and Beijing has been pressing the EU for a similar accord.

Efforts to strike an overarching deal with the EU are more complicated because Beijing would need to find agreement with the entire bloc.

On Thursday, EU officials said that they aimed to negotiate an investment protection agreement with China, which would be the first step on the road to a wider free trade deal, despite a series of tit-for-tat disputes with Beijing.

-- Impulse for Europe-China trade --

Li has said the accord could have wider implications.

"This will not only enhance our economic and trade cooperation, but also send the world a strong signal about the fight against trade and investment protectionism, as well as the liberalisation and facilitation of trade," he said Thursday in the Swiss daily Neue Zuercher Zeitung.

"It will give a new impulse to the deepening of relations and trade ties between Europe and China, bring tangible benefits for consumers and business in both countries, and contribute to the growth of world trade and the economic recovery," he added.

Bilateral and regional free trade deals -- including a planned EU-US accord and a proposed trans-Pacific agreement -- are sharply in focus amid deadlock at the World Trade Organization whose 159 member states have struggled since 2001 to produce a global treaty on liberalising international commerce.

The Swiss deal has been under negotiation since 2011.

After wrangling notably over Chinese taxes on imported Swiss industrial goods and Switzerland's rules on China's agricultural exports, the two countries wrapped up technical talks earlier this month.

Bilateral trade between Switzerland and China was worth $26.3 billion in 2012, with a full $22.8 billion of that figure represented by Swiss exports to China.

That made it one of the rare Western countries to have a positive trade balance with the Asian giant.

In contrast, exports by European economic powerhouse Germany to China in 2012 were worth the equivalent of $86 billion, and imports from China, $99.8 billion.

Switzerland's top exports to China are watches, pharmaceuticals and chemicals, and machinery, while textiles and machinery head the list of imported Chinese goods.

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