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A Swiss Army Knife, made in China?

TEXT OF STORY

Bob Moon: A pop quiz now: Which country comes to mind when I mention fine chocolate and watches? How about army knives?

They're all the pride of Switzerland, of course. In fact, the symbol of the Swiss Army Knife could almost be considered the tiny country's trademark.

Now, there's a chance the famous knife might one day carry the label "Made In China"— over the objections of some Swiss citizens. Marketplace's Janet Babin reports from North Carolina Public Radio.


Janet Babin: Who knows why the Swiss would tamper with a gadget that can already open a bottle of wine and, in a pinch, pluck your eyebrows. But there's an update in the works: a new model for the actual Swiss Army. And it's production could be outsourced to China.

Steve Suppan is with the Institute for Agriculture and Trade Policy. He says the reason has to do with a World Trade Organization rule. It could force Switzerland to award the knife contract to the lowest bidder.

Steve Suppan: You have to treat bidders on government procurement contracts from a foreign country just as you would treat your own.

That is, if a country has agreed to the WTO rule. China isn't a party to the agreement, but Hong Kong China is.

China-watcher Donald Straszheim with Roth Capital Partners says Chinese producers would have a leg up on the bidding:

Donald Straszheim: I would bet my whole checkbook that they've been producing so-called Swiss Army knives illegally and selling them as, you know, $1 knockoffs for years.

Rather than remain neutral, some Swiss officials are reportedly looking for ways around the WTO rules.

Steve Suppan says the outsourcing could violate WTO's Intellectual Property laws:

Suppan: Switzerland, in theory, could say, "Well, you know, this is no longer a Swiss Army Knife. We'll call it the Chinese Army Knife, but it can't be called the Swiss Army Knife."

Another exemption? If the Swiss can prove the pocket knife is a matter of national security.

I'm Janet Babin for Marketplace.

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