News Representatives of different watchmaking associations from across the world met on 23 March 2001 during the World Watchmaking and Jewellery Fair in Bâle to discuss the main problems affecting the trade in timepieces at international level.
This meeting is slowly becoming a tradition. It was the third of its kind and was chaired by Mr François Habersaat, Chairman of the FH and the Permanent Committee of European Watchmaking (PCEW). Representatives of the following eleven associations all participated: All India Electronic Watch & Clock Manufacturers Association, American Watch Association (AWA), British Horological Federation, BV Schmuck + Uhren (Germany), Chambre Française de l’horlogerie et des microtechniques, Hong Kong Manufacturers Association, Horloge Association of PR China, Japan Clock & Watch Association, Korea Watch and Clock Industry Cooperative, Federation of Hong Kong Watch Trades Industries Ltd and of course the Federation of the Swiss Watchmaking Industry.
Customs Duties and American Customs Tarif
Customs duties are a recurrent problem of world trade. In some countries, they are still very high for watchmaking products. This was the first topic of discussion. The different associations once more underlined their desire to continue their efforts to reduce or eliminate, as it is already the case in Japan and Hong Kong, customs duties on watchmaking products. To achieve this, the highest duty rates must be the first target. The associations observed with satisfaction that the situation is improving under the pressure of multilateral negotiations within the World Trade Organisation (WTO), or with the conclusion of bilateral free trade agreements.
Participants were informed by the AWA of progress towards simplification of American rates in the field of watchmaking. The delegations were naturally satisfied with the efforts made to simplify this particularly complex tariff, but they also agreed that in no case should this simplification generate an average increase of customs duties: a more complex system with reduced rates is preferable to a simple system with high rates! The American Congress will now have to give a ruling on the matter.
Origin of the Products
During a wide-ranging debate on the origin of watchmaking products, each of the participating associations recognised that the first step would be to harmonise minimum rules on origin. Negotiations on this matter are in progress within the framework of the WTO, but a consensus has not yet been reached as two opposing theories exist: countries of the European Union, Switzerland and Japan would like the origin of the watch to be based mainly on the country in which casing-up and final inspection occur. The USA and Hong Kong would like to use assembly of the movement as the sole criterion for the finished product. This second option is not paricularly logical as we know that it is the manufacturer of the watch who must guarantee product reliability to the consumer. Participants also deplored the fact that the American legislation requires the origin of the components as well as the watch to be marked.
This subject has been further complicated by the difference between rules of origin (customs duties) and rules of marking (intellectual property, Swiss Made). In some countries these two questions are governed by different regulatory provisions (Switzerland, Japan), while in others they are not (USA, Hong Kong).
Product Guarantee
An exchange of views also took place on the new European product guarantee directive, which sets the minimum duration of a guarantee at two years. The future implementation of this directive still has some unclear areas in the sense that the national laws of member countries required to implement this directive are not yet known. Details will probably have to be settled in the implementing texts. One of the difficulties consists in distinguishing between normal wear and tear and faults covered by the product guarantee.
Electrical and Electronic Waste
Delegations once more emphasised their fears concerning the draft European directive on the waste originating from electrical and electronic equipment. It seems almost certain that watches will not be excluded from the scope of this directive. However, hope remains that the ecological symbol may not have to appear on the product itself, but on the accompanying documents instead. In any case, delegations will continue to direct their efforts in this direction.
Smuggling
The subject of watch smuggling was raised by the Indian delegation. Several participants then pointed out that the best way of avoiding contraband was to cut the duties and taxes imposed on products; in any case, they felt it highly unlikely that the associations could make direct representations in this field.
Basel Salon
On the still highly controversial subject of the transfer of the exhibitors in the ancillary branches from Basel to Zurich, starting with the 2003 World Watch and Jewellery Salon, the delegations called attention to the regrettable lack of coordination between the organizers and the late announcement.
In conclusion, the participants welcomed the initiative of the FH and CPHE which had organized this meeting; the event will probably be repeated next year.
April 09, 2001