A framework to simplify and strengthen ties between Switzerland and the European Union was close to collapsing on Wednesday as the Bern government met to consider breaking off talks over ratification of a draft treaty struck in 2018.
A summit last month failed to resolve differences over a pact widely criticised within Switzerland and which focuses on five areas: free movement of people, civil aviation, land transport, mutual recognition of industrial standards and processed farm goods.
Switzerland insisted on more concessions on state aid, labour rules and citizens’ rights, and one political source said he expected the cabinet to decide after years of foot-dragging to cancel further negotiations.
But walking away from its biggest trading partner could over time disrupt and ultimately jeopardise Switzerland’s de facto membership of the EU common market.
For its part, the 27-member EU wants an overarching treaty to bind non-EU member Switzerland more closely to single market rules and provide a more effective way to resolve disputes.
EU-Swiss economic ties are now governed by more than 100 bilateral agreements stretching back to 1972 and fleshed out after Swiss voters in 1992 rejected membership of the European Economic Area. They will remain in effect.
Failure to strike a treaty deal would however block any new Swiss access to the single market, such as an electricity union.
Existing accords will also erode over time, including an agreement on cross-border trade in medical technology products that lapsed this week in the absence of a treaty deal.
The Swiss Medtech sector lobby – which represents 1,400 companies and 63,000 staff exporting more than 5 billion Swiss francs ($5.6 billion) worth of products to the EU – bemoaned the loss of seamless access to the single market.
“We hope that the last word has not yet been spoken,” Swiss Medtech President Beat Vonlanthen said.
“I expect politicians to put the health care of their own people above tactical negotiating interests.”
Main issues in Swiss-EU treaty standoff
Switzerland and the European Union have been wrangling since 2018 over a draft treaty that would formalise ties now governed by a patchwork of bilateral accords and create a more effective platform to resolve disputes.
WHAT WOULD IT COVER?
The treaty focuses on five areas: free movement of people, civil aviation, land transport, mutual recognition of industrial standards and processed farm goods. Bern would routinely, but not automatically, adopt EU single market rules in these areas and any future accords, such as an electricity union.
WHO WOULD SETTLE DISPUTES?
The EU originally wanted its European Court of Justice (ECJ) to act as the referee, but has since agreed to let arbitration panels address differences, albeit using ECJ guidance on how to interpret EU law.
If either party failed to comply with a panel’s decision, the other party could enact compensatory measures. The panel could then decide whether such measures were proportionate.
WHAT ISSUES ARE UNRESOLVED?
There are three main ones:
LABOUR RULES
The Swiss system of “flanking measures” – adopted in 2004 to ensure foreign workers on temporary assignments do not undercut high Swiss pay — is seen as a non-negotiable red line for Swiss unions but upsets many EU states.
CITIZENS’ RIGHTS
Swiss officials baulk at giving EU citizens the same access to social benefits as the Swiss get.
STATE AID
The EU wants Switzerland in principle to ban state aid that can skew competition for the single market, with some exceptions.
This has raised Swiss concerns about losing public subsidies for some sectors and state guarantees for regional banks.
Photo: EC Audiovisual Service
