On 20 August 2026, Switzerland and the People's Republic of China announced that they’ve completed negotiations to improve the Switzerland - China Free Trade Agreement (FTA). The upgraded agreement addresses the tariff imbalance in the original 2013 FTA and materially improves conditions for companies operating in both markets. The texts are now undergoing legal review, with signing planned by the end of 2026. After that, the upgraded FTA will need to be ratified before it takes effect.
A strategic milestone amid geopolitical uncertainty
This agreement matters well beyond trade economics. Right now, geopolitical tensions are high and global supply chains are under pressure. Against that backdrop, Switzerland and China have shown that pragmatic, rules-based cooperation is still possible. Both countries have reaffirmed their strong support for the multilateral trading system centred on the World Trade Organization (WTO).
The upgraded FTA confirms the longstanding friendship between Switzerland and China. Switzerland keeps its tradition of political neutrality. At the same time, the agreement shows that bilateral economic engagement can move forward even when wider geopolitical conditions are challenging.
For Chinese companies that want to de-risk overseas operations, Switzerland offers a distinctive platform. You benefit from political stability, a highly skilled workforce, excellent infrastructure, and now improved market access and greater legal certainty for investment, including in manufacturing. Switzerland stands out in Europe. While EU–China trade relations still follow WTO rules (the EU - China Comprehensive Agreement on Investment of December 2020 has not been ratified), Switzerland is currently the only country in continental Europe that offers Chinese businesses an operational FTA with enhanced investment protections.
For Swiss companies, the agreement broadens export market access to China - Switzerland's third-largest trading partner. It creates fresh opportunities for businesses in both countries and underlines that economic openness can sit alongside national sovereignty and careful risk management.
Key outcomes
Duty-free access for goods
Under the existing FTA, about 53.6% of Swiss exports to China were duty-free. The improved FTA raises this to 99.8% in the medium term, with 77.5% duty-free from entry into force. Key sectors reaching full duty-free access are:
| Sector | Existing FTA | Optimised FTA |
| Watches | 1% | 100% |
| Precision instruments | 85.9% | 100% |
| Machinery | 74.7% | 100% |
| Pharmaceuticals | 29.1% | 100% |
| Chemicals | 50.4% | 100% |
For Chinese exporters, 97.3% of agricultural exports to Switzerland are now covered, with 80.1% duty-free. This includes new concessions on fruits, vegetables, oilseeds, and sunflower seeds.
Investment
For the first time, the FTA includes investment market-access commitments based on national treatment and most-favoured-nation (MFN) treatment in non-services sectors, including manufacturing. Key features include:
- Prohibition of performance requirements (no forced technology transfer, local content requirements, or export obligations).
- Simplified authorisation procedures
- Full investment-cycle coverage when combined with the existing Investment Protection Agreement.
Trade in services
China has raised its commitments. It now guarantees Swiss companies sole ownership of subsidiaries in several sectors, including technical testing, manufacturing-related services, financial services (insurance, banking, securities), air transport, and maritime services.
Switzerland has expanded its commitments for contractual service providers, allowing presence of up to 90 days per year. It has also extended commitments in traditional Chinese medicine, covering teaching and research and development.
Digital trade
A new digital trade chapter builds a modern regulatory framework for cross-border digital activity. It increases legal certainty for digital business models, addresses bulk parcel shipments and e-commerce consumer protection, and promotes paperless trade to cut administrative burdens.
Rules of origin and supply chains
Revised rules of origin now allow processing in non-contracting parties, remove the direct transport requirement, and introduce electronic EUR.1 certificates. New provisions on export restrictions require 21-day advance notification, transparency, and proportionality. These changes strengthen supply chain resilience and make it easier to reconfigure your sourcing and production.
Sustainability and labour
The upgraded FTA now includes a combined trade and sustainable development chapter with binding commitments on climate change, biodiversity, clean energy, and the circular economy. These are described as the most ambitious environmental provisions China has accepted in any trade agreement.
For the first time in a China FTA, binding labour commitments cover freedom of association, elimination of forced labour, and implementation of International Labour Organization (ILO) conventions. The chapter also refers to the United Nations Guiding Principles on Business and Human Rights.
Competition
Both parties must now prohibit cartels, abuse of dominant positions, and anti-competitive mergers - including in relation to state-owned enterprises.
What should you consider now
The improved FTA creates real business opportunities - and gives you a clear reason to prepare at pace. At PwC, we recommend that you start by reviewing the following areas:
- Reassess your tariff exposure and pricing strategy. Model how duty-free access will affect your cost base and competitive position. This is particularly important if you operate in watches, pharmaceuticals, machinery, or chemicals.
- Review your supply chain and rules of origin. New rules that allow third-country processing and remove direct transport requirements may let you design more efficient and resilient supply chains.
- Evaluate investment opportunities. MFN treatment, the ban on performance requirements, and simpler authorisations may reshape the business case for setting up or expanding operations in China - or in Switzerland if you’re a Chinese company.
- Assess the impact on your services and digital business. Sole-ownership rights in key sectors and the new digital trade framework may open new routes to growth. Review your China market-entry strategy and identify where to act next.
- Strengthen your ESG posture. Binding environmental and labour commitments - including references to the Paris Agreement, ILO conventions, and the UN Guiding Principles on Business and Human Rights - raise expectations. Check that your compliance framework and reporting are up to date and match these standards.
- Revisit customs and trade compliance. Electronic EUR.1 certificates, modernised trade facilitation measures, and new export-licensing notification requirements will demand operational updates. Test whether your systems and processes are ready.