The European Union (EU) is by far Switzerland’s most important trading partner. At the same time, Switzerland is also one of the EU’s largest export and import markets. Accordingly, the relationship between Switzerland and the EU is important for the Swiss economy. Switzerland is pursuing a bilateral path in this regard. Starting with the Free Trade Agreement concluded in 1972, Switzerland has established a dense and constantly evolving network of agreements with the association of states. Of particular importance are the Bilateral Agreements I and II, which grant the contracting parties non-discriminatory access to each other’s markets and establish close cooperation in various areas between Switzerland and the EU. This bilateral approach has brought our country numerous advantages.
However, the EU has linked the further development of the agreement network to a clarification of the institutional framework. Based on this demand, a draft agreement was drawn up between 2014 and 2018. At its meeting on 26 May 2021, the Federal Council decided not to sign the institutional framework agreement and to end the negotiations with the EU, as in the eyes of the body various substantial differences could not be resolved.
Nevertheless, the Federal Council wishes to continue bilateral cooperation. Two years after the failure of the Framework Agreement, the Federal Council decided in the spring to make a new attempt to clarify the relationship with the EU. The reason given for this was that the body had noted a positive dynamic at the technical, diplomatic and political levels in the exploratory talks with the EU that had been underway since the end of February last year. The administration was therefore instructed by the body to draw up the key parameters of a negotiating mandate by the end of June and to explore this with the European Union. The package approach proposed by the Federal Council continues to serve as the basis for the talks: instead of a single agreement with a horizontal character, which regulates institutional issues (such as the assumption of rights, monitoring, dispute settlement), an entire package with new concrete agreements (including electricity, food safety and health) is to be drawn up. The existing and new internal market agreements should each also contain solutions for the institutional issues in their area. The aim is to enable a broad balance of interests with this approach and to increase the chances of success in any subsequent negotiations.
On 21 June, the Federal Council adopted the key parameters for a negotiating mandate between Switzerland and the EU. They form the basis for further talks with the EU, above all to settle the outstanding points. If the talks with the EU and the internal work continue to progress well, the Federal Council will prepare to adopt a negotiating mandate by the end of the year. At the same meeting in June, the long-awaited Federal Council report “Situation Assessment of Switzerland-EU Relations” was also adopted. The report concludes that the bilateral path remains the most advantageous solution for Switzerland.
Core concerns of SwissHoldings
Orderly and secure relations between the European Union and Switzerland are essential for both sides. The EU member states will remain extremely important trading partners of the strongly export-oriented Swiss economy for the foreseeable future. It must therefore remain a priority objective that the bilateral path can be successfully continued.
SwissHoldings welcomes the fact that the Federal Council is endeavouring to ensure that the bilateral agreements continue to be applied as smoothly as possible. From the association’s point of view, it is also important to exploit all possibilities that Switzerland can implement unilaterally to strengthen the framework conditions in order to ensure the competitiveness of our country.
