Chinese Premier Li poised to ink landmark Swiss-China trade deal

BERNE, Switzerland (AFP) - China's Premier Li Keqiang was poised on Friday to sign a key accord with Switzerland, bringing closer a free-trade deal seen as a touchstone for Beijing's growing global ties.

After high-level talks, Mr Li and the Swiss government were scheduled to ink a memorandum of understanding on the free-trade accord, paving the way for the expected official signature in coming months.

Mr Li arrived in Switzerland late on Thursday, on the first stop of his debut visit to Europe since taking over in March in Beijing's once-in-a-decade power transfer.

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

Unlike Germany, Switzerland is not a member of the European Union (EU), and Mr Li's visit to the Alpine country comes a month after China signed a free-trade deal with tiny Iceland, which likewise stands outside the 27-nation EU bloc.

The deal with Iceland was China's first with a European country, and China has been pressing the EU to work on a similar accord.

"Switzerland will be the first continental European country, as well as the first in a list of the 20 largest global economies, to have concluded a key free trade deal with China," Mr Li said this week in the Swiss daily Neue Zuercher Zeitung.

"This will not only enhance our economic and trade cooperation, but also send the world a strong signal about the fight against trade and investment protectionism, as well as the liberalisation and facilitation of trade," he underlined.

Efforts to strike an overarching deal with the EU would be more complicated, however, because Beijing would need to negotiate with the entire 27-nation bloc, not just individual member states.

On Thursday, EU officials said that they aimed to negotiate an investment protection agreement with China, which would be the first step on the road to a wider free-trade deal, despite a series of tit-for-tat disputes with Beijing.

Mr Li suggested that the Swiss deal could have wider implications.

"It will give a new impulse to the deepening of relations and trade ties between Europe and China, bring tangible benefits for consumers and business in both countries, and contribute to the growth of world trade and the economic recovery," he explained.

Bilateral and regional free-trade deals - including a planned EU-US accord and a proposed trans-Pacific agreement - are sharply in focus amid deadlock at the World Trade Organisation (WTO) whose 159 member states have struggled since 2001 to produce a global treaty on liberalising international commerce.

The Chinese-Swiss deal has been under negotiation since 2011.

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 in 2012, with a full US$22.8 billion of that figure represented by Swiss exports to China.

That made it one of the rare Western countries to have a positive trade balance with the Asian giant.

In contrast, exports by European economic powerhouse Germany to China in 2012 were worth the equivaliant of US$86 billion, and imports from China, US$99.8 billion.

Switzerland's top exports to China are watches, pharmaceuticals and chemicals, and machinery, while textiles and machinery head the list of imported Chinese goods.

Mr Li was also to give a speech on Friday to an invited audience from Switzerland's financial sector, with which he has said he wants to boost links, amid growing speculation that China could allow currency selected offshore centres to trade in its currency.