Import/Export in Switzerland: an update on free trade agreements

Customs duties, VAT… There can be many tariff barriers standing in the way of your goods. Fortunately, Switzerland has numerous free trade agreements that remove these barriers!

Discover all the free trade agreements Switzerland has concluded with its trading partners, and their impact on your import/export business.

What are Switzerland’s free trade agreements?

By definition, free trade agreements (FTAs) are international treaties concluded between two or more parties (which may be states or cross-border groupings) with the aim of promoting international trade, in particular by guaranteeing the free movement of goods.

Generally, these agreements provide for a reduction in duties and customs controls, as well as the removal of a number of national regulations that hinder the import or export of goods, services, labour or foreign capital.

Good to know: There are now more than 150 free trade areas worldwide, over 50% of which stem from agreements signed after 1990!

In Switzerland’s case, FTAs enable the country to develop and strengthen economic relations with its main trading partners. They make it easier for Swiss companies and SMEs to access the international market, particularly as part of their import/export activities.

To this end, the FTAs signed by Switzerland can remove:

• customs duties;
• Value Added Tax (VAT);
• certain technical standards;
• import quotas;
• certain packaging and labelling requirements.

Switzerland currently has a network of nearly 32 free trade agreements with 42 partners outside the European Union (EU). This network is constantly evolving, and further agreements are currently being negotiated.

What is the purpose of Switzerland’s free trade agreements?

Free trade agreements boost value creation, competitiveness and growth for Swiss companies. They also offer a number of benefits to Swiss consumers and producers: the former benefit from attractive prices and a wider choice, while the latter benefit from preferential tariffs on both raw materials and semi-finished products.

Indeed, in 2013 the various free trade agreements signed by Switzerland accounted for nearly 23% of the country’s total exports, excluding the agreement with the European Union. This proportion represents more than half of Swiss exports to countries outside the EU.

The free trade agreements currently in force in Switzerland

Import/Export with EU countries

The historic free trade agreement

The first free trade agreement between Switzerland and the European Union dates back to 22 July 1972. It was signed between the European Free Trade Association (EFTA) – an association of several states formed in 1960 to create a European free trade area, of which Switzerland is still a member – and the European Economic Community (EEC) – a former organisation set up in 1957, a pillar of the EU, aimed at the economic integration of several European states.

This 1972 free trade agreement allows Swiss companies to import and export certain industrial products to and from the EU without paying any customs duties.

Please note, however, that this exemption from customs duties only applies when the imported or exported goods meet the rules of origin set out in the agreement, and are accompanied by a movement certificate.

For example, goods manufactured in China, imported into Germany and then imported into Switzerland by the German supplier would not meet these conditions. As a result, the Swiss importer would indeed have to pay customs duties.

Bilateral agreements

While the 1972 free trade agreement does not cover agricultural products, these are included in the Bilateral Agreements I, signed years later, on 21 June 1999.

Indeed, these agreements notably provide for:

• the removal of customs duties and import quotas in sectors such as fruit and vegetables, meat and wine specialities, horticulture and cheese;
• the removal of non-tariff barriers in sectors such as organic farming, plant health protection and seeds.

Import/Export outside the EU

Although Switzerland signs numerous free trade agreements as part of EFTA, it can also conclude agreements with countries outside Europe, as is the case with China, Japan and Canada, for example.

The EFTA-Mercosur agreement

The EFTA member states (Switzerland, Norway, Liechtenstein and Iceland) and the Mercosur member states (Brazil, Argentina, Uruguay and Paraguay) signed a free trade agreement on 23 August 2019, opening up a market of 260 million people, which is also growing rapidly, to Swiss companies specialising in industrial exports.

Ultimately, thanks to this agreement, nearly 96% of Swiss exports to Mercosur countries will benefit from customs concessions, around 95% of which will simply be exempt from customs duties.

The EFTA-Indonesia agreement

On 16 December 2018, the EFTA member states and Indonesia concluded a wide-ranging economic partnership agreement.

Ultimately, this agreement involves:

• greater legal certainty;
• improved predictability of bilateral economic relations;
• greater cooperation between authorities.

Switzerland’s other non-European partners

In addition to the two major agreements mentioned above, Switzerland has concluded numerous trade partnerships with countries outside the EU, including:

• with the United Kingdom (CH-UK bilateral agreement) since 1 January 2021;
• with Turkey since 1 April 1992;
• with Singapore since 1 January 2003;
• with Japan (Switzerland-Japan bilateral agreement) since 1 September 2009;
• with China (Switzerland-China bilateral agreement) since 1 July 2014…

Good to know: you can find the full list of all these partnerships on the website of the State Secretariat for Economic Affairs!

Signed throughout its recent economic history to boost the import/export activities of its companies, Switzerland’s various free trade agreements now hold no secrets for you. It’s up to you to make the most of them to support the growth of your business!

To optimise your performance even further, it is best to protect yourself against the exchange rate risk inherent in international trade transactions. To do so, don’t hesitate to use b-sharpe’s online currency exchange service.