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!

Find out about all the free trade agreements Switzerland has concluded with its trading partners, and how they affect 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 ensuring the free movement of goods.

Generally, these agreements provide for the reduction of taxes 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 around the world, over 50% of which stem from agreements signed after 1990!

In Switzerland’s case, FTAs therefore enable the country to develop and strengthen economic relations with its main trading partners. They thus facilitate access to the international market for Swiss companies and SMEs, particularly in relation to their import and export activities.

To this end, the FTAs signed by Switzerland may 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 promote value creation, competitiveness and growth among Swiss businesses. Furthermore, they offer a number of benefits to Swiss consumers and producers: consumers benefit from attractive prices and a wider range of choice, whilst producers benefit from preferential tariffs on both raw materials and semi-finished products.

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

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 was signed on 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 established 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 applies only where 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. Consequently, the Swiss importer will indeed have to pay customs duties.

Bilateral agreements

Whilst the 1972 free trade agreement did not cover agricultural products, these were included in the first bilateral agreements signed several years later, on 21 June 1999. 

In fact, these provisions include, in particular:

• 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 protection products and seeds.

Import/Export outside the EU

Although Switzerland signs numerous free trade agreements within the framework of the EFTA, it is perfectly capable of concluding such agreements with countries outside Europe, as is the case, for example, with China, Japan and Canada.

The EFTA–Mercosur Agreement

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

Ultimately, thanks to this agreement, nearly 96% of Swiss exports to Mercosur countries will benefit from tariff concessions, with around 95% of these being completely exempt from customs duties.

The EFTA–Indonesia Agreement

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

Ultimately, this agreement entails:

• greater legal certainty;
• improving the predictability of bilateral economic relations;
• the promotion of cooperation between authorities.

Switzerland’s other non-European partners

In addition to the two major agreements mentioned above, Switzerland has entered into 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!

With the various free trade agreements signed by Switzerland throughout its recent economic history to boost its companies’ import and export activities, you’ll now be fully up to speed on them. It’s up to you to make the most of them to support the growth of your business!

To further optimise your performance, it is advisable to hedge against the exchange rate risk inherent in international trade transactions. To do so, please feel free to use b-sharpe’s online foreign exchange service.