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China calls time on import tariffs on Swiss watches China calls time on import tariffs on Swiss watches
(about 20 hours later)
China is to cut import tariffs on Swiss watches by 60% over 10 years as part of a free-trade agreement, as luxury watchmakers struggle to stem falling sales in the country.China is to cut import tariffs on Swiss watches by 60% over 10 years as part of a free-trade agreement, as luxury watchmakers struggle to stem falling sales in the country.
Under the pact, to be signed in July, Switzerland will offer zero tariffs on 99.7% of the value of goods from China, while China will allow 84% of Swiss exports to be duty-free, the assistant minister of commerce, Yu Jianhua, said on Monday.Under the pact, to be signed in July, Switzerland will offer zero tariffs on 99.7% of the value of goods from China, while China will allow 84% of Swiss exports to be duty-free, the assistant minister of commerce, Yu Jianhua, said on Monday.
Switzerland will be the first continental European country to sign a free-trade deal with China; Iceland was the first European country to sign a free-trade pact with China in April.Switzerland will be the first continental European country to sign a free-trade deal with China; Iceland was the first European country to sign a free-trade pact with China in April.
The latest agreement will benefit Switzerland's watchmakers, notably Swatch Group and Richemont, whose timepieces are particularly popular with Chinese consumers. Swatch Group includes 19 brands of watches, ranging from the eponymous plastic-cased variety to prestige brands including Blancpain, Omega, Longines and rado. Richemont's brands include Cartier, Van Cleef & Arpels, Piaget.The latest agreement will benefit Switzerland's watchmakers, notably Swatch Group and Richemont, whose timepieces are particularly popular with Chinese consumers. Swatch Group includes 19 brands of watches, ranging from the eponymous plastic-cased variety to prestige brands including Blancpain, Omega, Longines and rado. Richemont's brands include Cartier, Van Cleef & Arpels, Piaget.
Sales of luxury watches have tumbled in recent months, hurt in part by a government crackdown on giving gifts to officials for favours, and as growth in the world's second-biggest economy falters. Chinese imports of Swiss-made watches were down nearly a quarter on 2012 levels in the first three months of this year.Sales of luxury watches have tumbled in recent months, hurt in part by a government crackdown on giving gifts to officials for favours, and as growth in the world's second-biggest economy falters. Chinese imports of Swiss-made watches were down nearly a quarter on 2012 levels in the first three months of this year.
"In the first year, we will cut import duties on Swiss watches by 18%, then 5% annually in the following years," Yu said. "They will be cut by 60% in 10 years.""In the first year, we will cut import duties on Swiss watches by 18%, then 5% annually in the following years," Yu said. "They will be cut by 60% in 10 years."
Yu added that lower duties would reduce the price of Swiss watches sold in China, but noted it was difficult to calculate the amount by which prices would fall as there were other taxes also levied, including value-added tax and the consumption tax.Yu added that lower duties would reduce the price of Swiss watches sold in China, but noted it was difficult to calculate the amount by which prices would fall as there were other taxes also levied, including value-added tax and the consumption tax.
China is Switzerland's third-biggest trade partner after the EU and the US, and the free-trade deal covers industrial goods as well as agricultural products.China is Switzerland's third-biggest trade partner after the EU and the US, and the free-trade deal covers industrial goods as well as agricultural products.
All industrial goods, including textiles, clothes, metal products, auto parts and components, from China to Switzerland will enjoy zero tariffs. More than 960 types of Chinese agricultural products will be on the list of duty exempt items, Yu said.All industrial goods, including textiles, clothes, metal products, auto parts and components, from China to Switzerland will enjoy zero tariffs. More than 960 types of Chinese agricultural products will be on the list of duty exempt items, Yu said.
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