The Swiss government has announced that it will start the parliamentary approval process for the Trade and Economic Partnership Agreement (TEPA) with India, which was signed on Sunday after 16 years of negotiations. The TEPA aims to boost trade and investment between the European Free Trade Association (EFTA) states and India, by reducing tariffs, improving intellectual property rights and addressing sustainability issues.
What is the TEPA?
The TEPA is a comprehensive trade agreement between India and the four EFTA states – Iceland, Liechtenstein, Norway and Switzerland. The agreement covers various aspects of trade and economic cooperation, such as:
- Trade in goods: The agreement will eliminate or reduce tariffs on industrial and agricultural products, as well as provide rules of origin, technical barriers to trade, sanitary and phytosanitary measures, and trade remedies.
- Trade in services: The agreement will provide market access and national treatment for service providers, as well as cover cross-border trade, establishment, temporary entry of natural persons, mutual recognition of qualifications, and regulatory cooperation.
- Investment: The agreement will promote and protect investments between the parties, as well as provide dispute settlement mechanisms, transparency, and corporate social responsibility.
- Intellectual property: The agreement will enhance the protection and enforcement of intellectual property rights, including patents, trademarks, geographical indications, copyrights, and trade secrets. It will also address issues such as legal certainty, patent procedures, and the protection of ‘Swissness’.
- Competition: The agreement will ensure fair competition and prevent anti-competitive practices, such as cartels, abuse of dominance, mergers, subsidies, and state-owned enterprises.
- Trade facilitation: The agreement will simplify and harmonize customs procedures and documentation, as well as provide mutual administrative assistance and cooperation.
- Public procurement: The agreement will provide access to public procurement markets at the central and sub-central levels of government, as well as cover transparency, non-discrimination, and dispute settlement.
- Sustainable development: The agreement will promote trade and economic development in a way that respects human rights, labor standards, environmental protection, and corporate social responsibility. It will also provide mechanisms for dialogue, consultation, monitoring, and dispute resolution.
Why is the TEPA important for Switzerland?
According to the Swiss government, the TEPA will open up broad market access for Swiss businesses in India, which currently levies very high import tariffs on most products. Under the agreement, India will lift or partially remove customs tariffs on 95.3 per cent of industrial imports from Switzerland (excluding gold) either immediately or with transition periods . Switzerland will also have tariff-free access to the Indian market for selected agricultural products after a transition period of up to 10 years .
The TEPA will also improve the legal framework and predictability for Swiss businesses in India, especially with regard to intellectual property rights, patent procedures and the protection of ‘Swissness’. The agreement contains a comprehensive and legally binding chapter on trade and sustainable development, which will enable the EFTA states to address trade-related sustainability considerations . Another chapter covers the promotion of investments in India by companies from the EFTA states, which are expected to invest USD 100 billion in India over the next 15 years .
The Swiss government said that the signing of the agreement between the EFTA states and India is a significant milestone in Swiss trade policy . It said that it will initiate the parliamentary approval process for the TEPA immediately so that Switzerland can ratify the agreement by 2025 at the latest . The agreement will also need to be approved by the parliaments of the other EFTA states and India before it can enter into force.
The TEPA is expected to boost bilateral trade between Switzerland and India, which amounted to CHF 4.1 billion in 2023. Switzerland is India’s sixth largest trading partner among the EFTA states. The main Swiss exports to India are chemicals and pharmaceuticals, machinery and instruments, watches and jewellery. The main Swiss imports from India are textiles and clothing, chemicals and pharmaceuticals, machinery and instruments.
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