EU, CPHE oppose change in 'Swiss Made” criteria

William George Shuster, JCK Senior Editor -- JCK-Jewelers Circular Keystone, 5/3/2007 10:55:00 AM

Opposition to a proposal to strengthen the criteria for “Swiss Made” watches is growing.

The European Union (the intra-governmental and supra-national economic alliance of 25 European nations) has said it opposes changing the criteria, as suggested in a proposal by the Federation of the Swiss Watch Federation (FH), say Swiss press reports.

The proposal would raise the level of required Swiss-made components in a watch to 80 percent for mechanical watches and 60 percent for quartz watches, in order to use the “Swiss Made” label. The FH membership (90 percent of Swiss watchmakers) is due to vote on whether or not to accept the proposal and send it the Swiss government for consideration at its June 28 general meeting.

The FH says the proposal is a response to the wide use of foreign-made components (primarily from Asia) in Swiss watches.

However, the proposal is “protectionist,” says the EU, according to a recent report in the national Swiss newspaper SonntagZeitung. “A limitation of the free-trade agreement between Switzerland and the EU isn’t allowed,” a spokesman for the EU’s external affairs division told the newspaper. Any change can’t be unilateral but must be negotiated with the EU.

Also opposing the proposal is the permanent Committee of European Watchmaking Industry (CPHE), an independent body. The CPHE will convene in Geneva, Switzerland, on Friday when, said the press report, it was expected to “advise their Swiss colleagues to further consult the EU.”

The FH proposal has also provoked opposition from a number of Swiss watchmakers, which came out into the open at the recent BaselWorld 2007 trade fair. They claim that the proposal, if adopted, would raise their costs, forcing them to raise the prices of their watches, and that it only benefits the largest watchmaking firms, who can more easily absorb the higher costs.