Swiss deal with China in sight

Swiss negotiators are hoping to wrap up a deal with visiting Chinese negotiators this month that will bring Beijing another step closer to membership of the World Trade Organisation.

Talks will take place in Geneva, the headquarters of the WTO, on a landmark trade agreement between the two countries.

Switzerland is one of a handful of countries still to reach an accord with the Chinese. The others are Costa Rica, Ecuador, Guatemala and Mexico.

China has already overcome the biggest hurdles to entry by completing negotiations with the United States and the European Union.

Although it is almost inconceivable that any of the five would block a deal at the eleventh hour, they will still be looking for concessions to boost their domestic economies.

The Swiss economics ministry has been involved in ongoing talks with Beijing, but with the EU and US talks wrapped up, the Swiss negotiations are entering the final strait.

“We have special interests in watches,” says Marie-Gabrielle Ineichen, head of the ministry’s WTO division, “and that’s an area where we’d like to get more tariff concessions. And in financial services, we have a few issues we’d still like to solve with the Chinese.”

The EU cut a deal last month which wrung more concessions from the Chinese than even the Americans had previously managed. And under the terms of WTO entry concessions ceded to one partner will be extended to all members upon Beijing’s entry.

The main features of the EU deal included a promise by the Chinese to dismantle its state procurement policies of oil, oil products and fertilisers. And more than 150 tariffs on EU-priority goods will be cut by much more than the US team had managed to negotiate.

But like the Americans, the EU failed to move the Chinese on limits imposed on foreign ownership in the mobile telecommunications and life insurance sectors.

“After seeing the results the EU got, it isn’t very realistic to think that we can get an agreement where we have majority foreign investment in the insurance business,” says Ineichen. “But 50-50 is something we can live with,” she adds.

Beijing did however agree to a more rapid opening of the mobile telecommunications market and to grant European insurers seven licenses within three months of entry to the WTO.

Talks between Bern and Beijing are now expected to make rapid progress.

“We expect to wrap up rather quickly because the working party has to continue its work on the protocol of accession but it all depends on the concessions offered by the Chinese”, says Ineichen.

It has long been an aim of the Chinese to join the WTO and with Switzerland among the last countries to be wooed, Bern appears to be in a good position to wring final advantages.

by Michael Hollingdale