Talks between the EU and Switzerland over a new “framework agreement”, that had been under negotiation since 2014, have collapsed. The agreement would have rationalised the complex web of existing EU-Swiss treaties, established over more than 50 years, under a common framework and extended mutual market access in certain areas.
Swiss-EU relations have been slightly fractious over the past decade, with particular tensions arising from the 1999 Agreement on the Free Movement of Persons, which was a key factor in the 20 per cent rise in the Swiss population over the following two decades.
Many Swiss felt this immigration tended to induce economic harms (particularly because Swiss GDP per capita is about twice the EU average) and in 2014 the Swiss voted in a referendum to imposed quotas on EU immigration. Under pressure from the EU, this was never implemented as promised, leading to a subsequent referendum in 2020 on abandoning a whole package of EU-Swiss agreements (the “Bilaterale I”). At that 2020 referendum the Swiss voted to keep free movement and the rest of the Bilaterale I package.
However, the Swiss federal government understood that its scope to go further was limited. This led to a set of effective red lines. The Swiss government insisted it needed to exclude the EU’s Citizenship Directive (which would have extended the scope of free movement to cover benefits and voting rights). It also wanted to maintain various domestic wage safeguards and state aid rules.
The EU, wary of allowing bespoke arrangements in the post-Brexit world, was unwilling to compromise on these points.
In principle, failure to complete the framework agreement leaves EU-Swiss relations governed by the same patchwork of deals that were in place before, and that the Swiss are largely happy with. In practice, it seems likely the EU will seek to apply pressure to push the Swiss back to the negotiating table. One early implication concerns medical devices – of particular salience during the pandemic and in the life sciences sector where Switzerland is well-known to be strong. New EU rules will now lead Swiss medical devices to be treated like other “third country” imports into the EU.
Other areas of expected near-term pressure include collaborations over education and research, arrangements for Swiss planes accessing EU airspace, Swiss access to the EU’s electricity network, and the long-thorny issue of Swiss financial services – where the EU has restricted access in the past when there were tensions over free movement.
Thus although the Swiss government has declared the framework agreement talks decisively at an end and various Swiss politicians that opposed the agreement have declared victory, it is far from clear yet that the EU will accept matters staying that way for long.
From a UK perspective, it is natural to try to read Brexit-related lessons into the Swiss debate. Rather as the British did, the Swiss have maintained this slightly fractious relationship with the EU for decades. Perhaps at some point, the Swiss population might decisively turn against such close engagement with the EU?
Maybe one day. But for now, that seems unlikely. Nonetheless, there have been areas the UK has sought to collaborate more closely with the Swiss post-Brexit (e.g. forming a new joint regulator for medicines and healthcare products – the “Access consortium”, which also includes Australia, Canada, and Singapore). In the future, there may be more – financial services and pharmaceuticals being merely two of the most obvious contenders. Time will tell.