Li Keqiang

China seals free-trade pact with Switzerland

Premier to set seal on China’s second free-trade pact with a European country before moving to Germany, where row over solar imports looms

PUBLISHED : Saturday, 25 May, 2013, 12:00am
UPDATED : Saturday, 25 May, 2013, 5:30am

Premier Li Keqiang was to announce yesterday the conclusion of negotiations with Switzerland on a free-trade deal seen as a touchstone for China's growing global ties.

In a speech at a lunch with business and financial leaders, Li said he would announce with Swiss President Ueli Maurer the conclusion of talks on the free-trade deal.

The endeavour to try to understand the other can deepen mutual trust
Li Keqiang, premier

"To conclude [free-trade agreement] talks with such a developed and world-leading economy as Switzerland shows China's determination and courage in opening up wider," Xinhua quoted Li as saying. The pact has been in the works since 2011.

Swiss economy minister Johann Schneider-Ammann said he hoped the pact could be signed when he visits Beijing in mid-July.

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 their technical talks earlier this month.

Bilateral trade between Switzerland and China was worth US$26.3 billion last year, with US$22.8 billion of that represented by Swiss exports to China.

The agreement with Switzerland follows China's free-trade pact with Iceland, its first signed with a European country.

Li arrived in Switzerland late on Thursday, on the first leg of his debut visit to Europe as premier.

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

"From the German side, it's all about trade. Germany sees China essentially as a large export market on which it's increasingly dependent," said Germany expert Hans Kundnani, of the European Council on Foreign Relations.

German Chancellor Dr Angela Merkel is under pressure to use her meeting with Li to defuse a European Union trade conflict with China over solar power products.

Merkel, who will meet Li tomorrow in Berlin, should speak out against EU import duties that may be imposed on the Chinese products, the Alliance for Affordable Solar Energy, a lobby group, said.

The EU is poised to penalise imports of Chinese solar power products after Solarworld, Germany's biggest maker of solar panels, lodged an anti-dumping complaint with the European Commission. Import tariffs would hurt manufacturers such as Trina Solar and raise costs to build power plants in Europe, the world's largest solar market.

In Thursday's Die Zeit, under the headline "Together on the outside lane", Li wrote that the two nations were economically working excellently together, adding: "The accomplishments so far are, however, just a start. Active dialogue can contribute to better understanding and the endeavour to try to understand the other can deepen mutual trust."

Li's two-day programme begins with a visit to Potsdam and the palace where Soviet, US and British leaders met in 1945 to help shape the post-war world.

Agence France-Presse, Bloomberg, Reuters