EU Criticism of "Swiss Made" Proposal is Premature, says FH president

William George Shuster, JCK Senior Editor -- JCK-Jewelers Circular Keystone, 5/4/2007 10:28:00 AM

Criticism by the European Union of proposed changes to criteria for “Swiss Made” watches is premature, says the president of the Federation of the Swiss Watch Industry (FH).

The EU has said an FH proposal to strengthen the criteria, due for a vote by FH members on June 28, is “protectionist,” according to a recent report in the national Swiss newspaper SonntagsZeitung and that any change must be negotiated with the EU. The Permanent Committee of the European Watchmaking Industry (CPHE), an independent body, also said something similar.

However, JCK was told May 4 by Jean-Daniel Pasche, FH president, that  the proposal first must be presented to the FH members for their vote the General Meeting on June 28. “Then, after the meeting [if the proposal is adopted], before entering into discussions with the EU, we will contact the Swiss authorities. He added that, that the FH is also “well aware that we have to discuss this with the European watch associations (France, Germany, Italy, UK).” Switzerland is a member of the CPHE.

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 (most 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.

The proposal has also provoked criticism from some Swiss watchmakers. They claim that if adopted, it 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.