14 October 2026 | Publication
Modernisation of the Switzerland- China
Free Trade Agreement
14 October 2026 | Publication
Modernisation of the Switzerland- China
Free Trade Agreement
In August 2026, Switzerland and China concluded negotiations to modernise their 2014 free trade agreement (FTA). The outcome is particularly significant for Switzerland’s life sciences sector.
The existing FTA, signed on July 6, 2013 and in force since July 1, 2014, was China’s first comprehensive trade agreement with a continental European country. Switzerland eliminated duties on virtually all Chinese imports upon entry into force, whereas around half of Swiss exports to China benefited from duty-free treatment. Invoking its status as a developing country, China secured extensive exceptions and limited concessions for sensitive sectors, notably chemicals and pharmaceuticals. While many medical devices already benefited from duty-free treatment, only 29.1% of Swiss pharmaceutical exports to China qualified for preferential tariff treatment.
Under the modernised FTA, pharmaceuticals are expected to be among the principal beneficiaries, with duty-free coverage increasing from 29.1% to nearly 100%. Overall, 99.8% of Swiss exports to China will benefit from duty-free access in the medium term, including full coverage for pharmaceuticals and precision instruments. Of these exports, 77.5% will become duty-free upon the agreement’s entry into force, with the remaining tariff reductions phased in over five to ten years. According to the Swiss State Secretariat for Economic Affairs (SECO), the enhanced market access could generate additional tariff savings of approximately CHF 244 million for Swiss exporters.
The modernisation package also includes significant non-tariff benefits. Swiss companies will be entitled to wholly own their Chinese subsidiaries in a range of sectors, including technical testing and analysis services (including freight inspection), services incidental to manufacturing, financial services (insurance, banking and securities firms), air transport services (repair and maintenance of aircraft, ground handling), as well as maritime transport and auxiliary services. This removes existing jointventure requirements in these sectors. The parties have further agreed to national-treatment and mostfavoured-nation protections for investments in other sectors, such as manufacturing. In addition, they may not impose performance requirements, such as mandatory technology transfers, local-content obligations or export commitments, as a condition for establishing or operating a business on the other party’s territory.
The modernised FTA also introduces new limitations on export restrictions, which may have positive implications for pharmaceutical supply chains sourcing from China. Existing export restrictions must be notified, while future measures must be published or notified to the other party 21 days before taking effect. The agreement provides for consultations and requires any such measures to be non-discriminatory and proportionate. In addition, the parties undertake a binding commitment to prohibit cartels, abuses of dominance and anti-competitive mergers, expressly extending these obligations to state-owned enterprises. Updated rules of origin further facilitate international supply chains by permitting certain processing activities in third countries, abolishing the direct transport requirement and recognising electronic certificates of origin.
That said, pharmaceutical products and medical devices will remain subject to applicable marketing authorisation and regulatory approval requirements on both sides. Duty-free access therefore neither replaces nor accelerates regulatory approval procedures, and companies must continue to address market-entry requirements separately.
The text of the modernised FTA has not yet been published. The agreement still requires formal signature and completion of the respective domestic approval procedures. Accordingly, the date of entry into force remains uncertain.
LIR Switzerland Edition 7, October 2026
The existing FTA, signed on July 6, 2013 and in force since July 1, 2014, was China’s first comprehensive trade agreement with a continental European country. Switzerland eliminated duties on virtually all Chinese imports upon entry into force, whereas around half of Swiss exports to China benefited from duty-free treatment. Invoking its status as a developing country, China secured extensive exceptions and limited concessions for sensitive sectors, notably chemicals and pharmaceuticals. While many medical devices already benefited from duty-free treatment, only 29.1% of Swiss pharmaceutical exports to China qualified for preferential tariff treatment.
Under the modernised FTA, pharmaceuticals are expected to be among the principal beneficiaries, with duty-free coverage increasing from 29.1% to nearly 100%. Overall, 99.8% of Swiss exports to China will benefit from duty-free access in the medium term, including full coverage for pharmaceuticals and precision instruments. Of these exports, 77.5% will become duty-free upon the agreement’s entry into force, with the remaining tariff reductions phased in over five to ten years. According to the Swiss State Secretariat for Economic Affairs (SECO), the enhanced market access could generate additional tariff savings of approximately CHF 244 million for Swiss exporters.
The modernisation package also includes significant non-tariff benefits. Swiss companies will be entitled to wholly own their Chinese subsidiaries in a range of sectors, including technical testing and analysis services (including freight inspection), services incidental to manufacturing, financial services (insurance, banking and securities firms), air transport services (repair and maintenance of aircraft, ground handling), as well as maritime transport and auxiliary services. This removes existing jointventure requirements in these sectors. The parties have further agreed to national-treatment and mostfavoured-nation protections for investments in other sectors, such as manufacturing. In addition, they may not impose performance requirements, such as mandatory technology transfers, local-content obligations or export commitments, as a condition for establishing or operating a business on the other party’s territory.
The modernised FTA also introduces new limitations on export restrictions, which may have positive implications for pharmaceutical supply chains sourcing from China. Existing export restrictions must be notified, while future measures must be published or notified to the other party 21 days before taking effect. The agreement provides for consultations and requires any such measures to be non-discriminatory and proportionate. In addition, the parties undertake a binding commitment to prohibit cartels, abuses of dominance and anti-competitive mergers, expressly extending these obligations to state-owned enterprises. Updated rules of origin further facilitate international supply chains by permitting certain processing activities in third countries, abolishing the direct transport requirement and recognising electronic certificates of origin.
That said, pharmaceutical products and medical devices will remain subject to applicable marketing authorisation and regulatory approval requirements on both sides. Duty-free access therefore neither replaces nor accelerates regulatory approval procedures, and companies must continue to address market-entry requirements separately.
The text of the modernised FTA has not yet been published. The agreement still requires formal signature and completion of the respective domestic approval procedures. Accordingly, the date of entry into force remains uncertain.
LIR Switzerland Edition 7, October 2026
