Chinese President Xi Jinping and Swiss President Guy Parmelin are due to sign an upgraded trade accord in Beijing on Friday that gives Switzerland unusually free access to China, in one of the most favourable deals Beijing has granted a European country, Reuters reported on Friday. The signing bucks a broader global shift towards protectionism, with barriers rising not only from the US administration but increasingly from the European Union as well.

Source: Reuters via WNCY

The degree of openness surprised diplomats: 99.8% of Swiss exports will have duty-free access to China, up from just over half previously, even if the terms largely reciprocate what Bern already grants China. Chinese and Swiss officials announced the deal in August, a year after US President Donald Trump saddled Switzerland with the highest US trade tariffs in Europe.

The Swiss State Secretariat for Economic Affairs said the deal does not grant Chinese industrial goods new tariff benefits, but tackles imbalances in the initial accord and expands Swiss market access to China. Senior Swiss trade official Roger Gschwend said the deal was targeting a level playing field for Switzerland, while China's foreign ministry said the upgrade will provide more stable, transparent and predictable institutional safeguards for Chinese and Swiss enterprises.

The accord raised some US eyebrows, and US officials sought to discuss it with Swiss colleagues, according to two people familiar with the matter cited by Reuters. The US State Department and the office of the US Trade Representative did not reply to requests for comment, Reuters said, and the Swiss government said the accord is not expected to affect bilateral goods trade with the EU, the United States or other partners.

Parmelin is in China at the same time as Germany's president and follows the EU's top trade official, who went earlier this month; the leaders of the United States, Canada, Britain, France and Germany have all been to China in the past 12 months. Three Western diplomats told Reuters they saw in the Swiss deal a bid by Beijing to burnish its free-trade credentials and project a more internationalist image as the Trump administration steps back from multilateralism.

Switzerland coped with 39% US tariffs for months before striking a provisional deal with Trump last November that cut those duties to 15% — context that helps explain why Bern pursued the China upgrade even as other European governments harden their trade stance towards Beijing.