Even though Switzerland is currently not a member of the European Union (EU), its relations with it are crucial to the country in many ways, as four out of five countries surrounding Switzerland belong to the EU. Furthermore, Switzerland shares many cultural, economic, and political ties as well as certain values with the EU and the EU is Switzerland’s most important economic and political partner. Therefore, it is one of the main goals of Swiss foreign policy to maintain good relations with the EU. To do so, the two parties agreed on more than 120 bilateral deals over the past 50 years. This bilateralism is strongly supported domestically. However, the dynamic of the Swiss-EU relationship is highly complex and remains a delicate balance between sovereignty and integration.
Even though, from a Swiss perspective, there are many arguments against seeking EU membership, establishing well-regulated relations between Switzerland and the EU is crucial, as it ensures prosperity and stability for both parties.
The EU and Switzerland are close neighbours with strong cross border links. Four out of five of Switzerland’s neighboring countries, Germany, Austria, France, and Italy are part of the EU. The fifth neighboring country – the Principality of Liechtenstein – is not a member of the EU but of the European Economic Area (EEA) and is thus linked into an internal market governed by the same basic rules. Switzerland also shares many cultural, political, and economic ties as well as certain values with the EU. Furthermore, the EU is Switzerland’s most important economic partner and Switzerland is the fourth largest partner for the EU. Barrier-free participation in the EU single market therefore remains a priority for the Swiss. Simultaneously, the EU prioritizes safeguarding the integrity of its single market, necessitating uniform application of rules for all applicants. Last but not least, around 450,000 Swiss citizens live in the EU, and around one and a half million EU citizens reside in Switzerland. Also, several hundred thousand EU citizens commute across the border for work every day.
The history of Switzerland with the EU goes back a long way, even to times when the EU itself was not yet established.
In 1948, Switzerland joined the Organization for European Economic Cooperation (OEEC). The main goal of the OEEC was to rebuild the economy and foster European cooperation in the aftermath of World War II.
Later, in 1957, the European Economic Community (EEC) was founded: the predecessor of the EU. For Switzerland, however, it was unthinkable to join the EEC, firstly because it was considered controversial to Swiss neutrality in World War II and its consequences, and secondly because Switzerland rejected the idea of supernationalism at that time, as it prospered by not being occupied during World War II. After some time, however, the Federal Council (FC) recognized the negative impact of World War II on transnational trade. Therefore, Switzerland, together with other non-EEC states, established the European Free Trade Association (EFTA) in 1960 as a counterweight to the EEC. The main objective of the EFTA was to abolish tariffs on industrial products of the member states and thus promote trade between them.
In 1972, Switzerland set the foundation for economic exchange with the EEC by signing the Free Trade Agreement with the EEC. This agreement provided that industrial goods coming from Switzerland to the EEC and vice versa would be exempt from custom duties.
In 1989 and 1990, Switzerland signed two other agreements with the EEC, the so-called Insurance Agreement in 1989, which grants all non-life insurers the right to establish themselves in the territory of the other country, and the Agreement on the Carriage of Goods in 1990. The latter aimed to simplify the clearance of goods through customs.
A popular referendum about EEC accession failed in 1992
As the FC came to the realization that this multilateral approach with the EEC did not align with national interests, as it lacked the possibility of joint decision-making, the FC decided to follow the example of other neural states such as Austria, Sweden, and Finland, and sent an official application for EEC membership to Brussels on May 26th. At the same time, a national referendum was held on whether Switzerland should join the newly created European Economic Area (EEA). Both this popular referendum and the one about EEC accession were held the same day, on December 6th. This might possibly be the reason why the project failed. Although the majority of the parliament was in favor of joining the EEC, the popular referendum failed by a narrow margin, with 50.3% voting against.
Two sets of bilateral agreements were established
After the founding of the EU in 1993, the EU agreed to negotiate with Switzerland in seven different areas. However, the EU had its own conditions for this: the EU argued that “the various dossiers are in the interest of both parties only if adopted as a single package”. Therefore, the different agreements were legally linked to each other. This suggested that all agreements would be signed and entered into force at the same time and that if one agreement expires, so do all others. This is known as the guillotine clause. After seven years of negotiations, the EU and Switzerland signed a package known as Bilateral Agreements 1 in 1999. A year later, the Bilateral Agreements 1 were approved by the Swiss electorate in a popular mandatory referendum, with almost two-thirds of the voters voting “yes”. Official approval by the EU and its member states followed, until the first set of bilateral agreements finally entered into force on June 1st, 2002. The first set of bilateral agreements was mostly economic in nature and aimed to improve Switzerland’s access to the EU internal market.
Mid-2002, the EU and Switzerland started a new round of negotiations, this time in ten different areas. These new agreements went beyond economic interest and extended cooperation to important political areas such as security, asylum, and environment. Unlike the Bilateral Agreements 1, the Bilateral Agreements 2 were not legally linked. The new agreements were signed by the EU and Switzerland in 2004 and then entered into force.
An important agreement of the Bilateral Agreements 2 is the Schengen Agreement. It was set up to facilitate travel. It suggested abolishing systemic controls on border crossings withing the Schengen Area but tightening controls at the external borders. It therefore also called, for example, for visas issued by Switzerland to be valid for the entire Schengen Area and vice versa. This, however, led to the need of another agreement, the so-called Dublin Association Agreement, which is legally linked to the Schengen Agreement. It determines which state is responsible for processing asylum applications. It is intended to prevent asylum seekers from applying for asylum in more than one Schengen/Dublin Association country. It therefore states, for example, that if Switzerland has already rejected an asylum application, that person cannot apply for asylum in another member country and vice versa.
“The bilateral approach is the European policy instrument that best allows Switzerland to safeguard its interests with regard to the EU”
To summarize, the two parties have agreed on more than 120 bilateral deals over the last 50 years to ensure smooth relations in areas such as transport, security, trade, and education. This bilateralism is strongly supported domestically. The FC once stated that “the bilateral approach is the European policy instrument that best allows Switzerland to safeguard its interests with regard to the EU”.
However, the relationship between the two parties remains highly complex and is always facing new challenges
Even though all bilateral agreements were designed as static intergovernmental agreements intended to guarantee Swiss sovereignty and institutional independence, they are increasingly being integrated into the dynamics of EU legislation, resulting in a loss of sovereignty for Switzerland. Regarding Switzerland, the Council of the EU stated in December 2008 that “participating in the internal market requires a uniform and simultaneous application and interpretation of the constantly evolving acquis”. In several negotiations on new bilateral agreements since then, the EU has proposed to suspend the respective agreement if Switzerland does not adopt the new EU legislation. However, the EU requires this unconditional adoption of its respective legislature not only regarding possible future changes, but also with regards to the already existing agreements.
In 2021, the Swiss-EU relationship faced a new challenge, and previous negotiations came to a halt, when the Swiss government rejected the proposed Swiss-EU institutional framework agreement (InstA). The main challenge was managing the free movement of persons in a way that works for both parties. For the FC, discrepancies on various essential points were ultimately insurmountable. The FC e.g. feared a potential surge in EU social welfare beneficiaries without mechanisms to revoke residency or deport individuals convicted of criminal offences.
The FC approved a draft negotiating mandate for ongoing collaboration with the EU
In order to overcome the discrepancies of the InstA, the Swiss authorities came up with a package of new and revised cooperation and market access agreements in December 2023. In contrast to the InstA, this negotiating mandate offers greater flexibility and scope for action to protect the interests of both parties throughout the negotiation process. The mandate is the outcome of 18 months of exploratory talks with the EU and is based on parameters approved by the FC. Furthermore, it provides room for maneuver for the negotiations with the EU. Those negotiations address several key points, such as: new agreements on food safety, health and electricity; Swiss participation in EU education and research programs such as Horizon Europe; regular Swiss-EU cohesion contributions; as well as the dynamic implementation of legislation and mechanisms for resolving disputes concerning the five agreements governing market participation between the two parties (overland transport, free movement of persons, agriculture, overland transport and the mutual recognition of industrial goods).
Swiss President Viola Amherd and European Commission President Ursula von der Leyen opened negotiations between Switzerland and the EU
On the 18th of March 2024, Swiss President Viola Amherd and European Commission President Ursula von der Leyen officially opened the negotiations on the various elements of the mandate in the presence of the chief negotiators from both sides. To review the progress of the negotiations, a meeting between the Executive Vice-President of the European Commission Maroš Šefčovič and the Federal Councillor Ignazio Cassis, head of the Federal Department of Foreign Affairs (FDFA) is scheduled for June 2024. While in Brussels, Amherd also met with Šefčovič to discuss the situation in the Middle East, migration issues as well as the European Political Community (EPC) as an intergovernmental forum for political cooperation and dialogue on the European continent. Further topics of the meeting in March included the security landscape in Europe, Switzerland’s and the EU’s dedication to peace, and the extension of security policy collaboration, as decided by the FC in September 2022.
However, the Swiss-EU relationship remains an intricate dance of sovereignty and integration
Even though it seems as if Switzerland and the EU found a temporary solution in the negotiating mandate, the question arises how Switzerland will be dealing with the EU in the future, now that the bilateral approach faces more and more challenges and seeking EU membership is still not an option. The relationship between the two parties remains a delicate balance between sovereignty and integration.
Sources
Image : Wikimedia Commons
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