Bilateral path with EU is in ‘the interest of Switzerland and its economy’

Trade wars, armed conflict on Europe’s doorstep, and multilateralism in crisis are all factors of uncertainty for our companies, which are already exposed to tough competition. Against this backdrop, it is all the more important to develop solid contractual relations with the EU. 

So we also need to analyse with a cool head the outcome of negotiations on the package of Swiss-EU agreements. The stakes are high. The EU is, and will remain, our main trading partner due to its geographical, linguistic and cultural proximity. This is true even if trade, particularly with the United States and China, has grown significantly, which is gratifying. 

Ending erosion of the bilateral path

We are at a crossroads. Bilateral agreements are losing their substance. They have not been updated for several years now, and no new agreement can be concluded until the famous institutional issues have been resolved (dispute settlement mechanism, and automatic application of EU law). In short, we are slowly but surely losing the important competitive advantages of our partnership sealed 25 years ago with the EU. And we cannot conclude the electricity agreement, which is of utmost importance for our winter power supply.

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Failure to update agreements has consequences. The medical device industry knows this well. Previously, a single approval was sufficient for Switzerland and the whole of Europe. For some years now, products have had to be certified in an EU member state, including those already on the market. This generates costs, considerable bureaucracy and much longer time-to-market. Some companies have been forced to relocate part of their activities, to Germany for example, or to stop investing in Switzerland. In two years’ time, machinery (certain products), pharmaceuticals and construction will be in the same boat if the agreement on technical barriers to trade is not updated. These represent 60% of our export industry.

Our entire economic fabric is exposed to the erosion of the bilateral path, as are consumers and citizens. The bilateral agreements have greatly benefited us. Without easier access to the European market and agreement on the free movement of people, we would not have experienced strong growth, sustained job creation and steadily rising wages. 

Since 1999, GDP per capita has risen by 25%, and the state – at all levels – has seen a sharp increase in tax revenues. This economic momentum and solid purchasing power have benefited companies in the domestic market, from bakers to service providers to subcontractors for exporting companies. At the same time, all sectors were able to import products from the EU, including spare parts, at lower prices. 

Bilateral III package is in Switzerland’s interest

Will the new package of agreements lead to a loss of sovereignty, as some claim? Will Switzerland have to take on board all European law without flinching? Will it be subject to the European Court of Justice? Is wage protection sufficiently guaranteed? These are legitimate questions. For economiesuisse too, there is no question of sacrificing our sovereignty and semi-direct democracy. 

Let’s look at the facts. On the basis of the information available at this stage, economiesuisse believes that the outcome of the negotiations is in the interests of our economy and our country. Our negotiators have obtained many important concessions and exceptions – far more than with the framework agreement. Here are a few examples: 

• Switzerland will be able to decide – on its own – to activate the safeguard clause to limit immigration from the EU/European Free Trade Association (EFTA) in the event of serious social or economic problems. The conditions and measures will be defined by Switzerland alone and enshrined in law. This is a concrete response to concerns expressed by Swiss citizens.
• The “dynamic” (automatic) adoption of European law concerns only eight agreements out of more than 140. This comes with important exceptions, and is subject to the agreement of the federal authorities, or even of Swiss citizens in the event of a referendum. In the event of refusal, the EU will be able to take compensatory measures, but these will have to be proportionate. As a reminder, “dynamic” adoption is already included in the Air Transport Agreement (2002) and in Schengen/Dublin (2008), and has never posed a problem. What is new is that Switzerland will be systematically consulted, as EU member states are, on the drafting and development of legislation affecting it.
• The dispute settlement mechanism corresponds to the usual principles of international law. In the event of a dispute, if a political solution cannot be found within the Joint Committee, the matter may be referred to the Joint Arbitration Tribunal. The latter will consult the European Court of Justice only if EU law needs to be interpreted. With this mechanism – and this is very important – Switzerland will be able to defend itself if the EU takes disproportionate compensation measures, which is not possible today.
• The EU recognises officially for the first time the need to protect wages in Switzerland and to provide accompanying measures. Our negotiators have won major concessions, including a guarantee that the current level of protection cannot be weakened (non-regression clause). The ball is now in the court of the Swiss unions and employers, who are discussing technical measures. An agreement seems to be on the right track.
• The risk of “social tourism” is averted. As in the past, the free movement of people will apply only to workers. EU nationals convicted of crimes can continue to be deported from Switzerland.

Bilateral III will guarantee Switzerland’s full participation in the most important European research programmes. This is a guarantee of innovation, from which all our companies benefit directly and indirectly. 

«The bilateral path is a bulwark against EU or EEA (European Economic Area) membership, and against isolation. »

No better alternative 

Economiesuisse will take a definitive position on the Bilateral III when the consultation process opens at the end of June, based on the texts of the agreements. One thing is already certain: the bilateral path must be continued and developed. It is a bulwark against EU or EEA (European Economic Area) membership, and against isolation. A free-trade agreement would not at all offer the same advantages. 

The bilateral path, which only Switzerland enjoys, allows us to participate in the internal market in specific areas of our choice while preserving our independence, direct democracy and federalism. In these troubled times, our companies and our country need a strong, stable partnership with the EU more than ever.  

The views expressed in this article are solely those of the author and do not necessarily reflect the views of SWI swissinfo.ch.

>>Read the opinion of François Schaller, a journalist and a member of the committee of autonomiesuisse:

Opinion

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Edited by Samuel Jaberg / adapted from French by Julia Crawford/gw