SWISS CHALLENGES IN DEALING WITH THE EU

Switzerland and the EU sustain very close relations. With no other third country has the Union concluded more agreements (more than 120). Thus Switzerland and the EU are intertwined in many policy areas. Examples: Internal market (free trade agreement, free movement of persons agreement), internal security (Schengen/Dublin), transport (overland transport and civil aviation agreements), cooperation in tax matters (taxation of savings and fight against fraud agreements). There are nevertheless several economic challenges of being the outsider.

• Having a relationship based on bilateral agreements means Switzerland doesn’t have a seat at the EU table. In theory, it gives the opportunity for Switzerland to safeguard national interests by not adopting EU legislation. But this does not happen in practice as most of the time Switzerland opts to autonomously introduce similar measures to make sure its industry doesn’t have obstacles in accessing the EU market. For Swiss businesses to be allowed to continue to export, they need to follow the rules of the EU. Swiss access to the single market on that area is only guaranteed as long as the EU rules remain the same as when the agreement was made. If the EU’s laws have changed, Swiss businesses loose the access unless Switzerland adjusts its rules accordingly.
• Switzerland has given substantial concessions in order to get market access.
• Negotiating trade agreements has been a complex and time consuming process, meaning costs to businesses due to uncertainty.
• The lack of any dispute resolution mechanism makes it difficult for businesses to get clarification in case of disagreements.
• The process and administrative system surrounding the management of the agreement is burdensome. The sheer number of joint committees (27 in total) means managing the agreement leads to difficulties, in particular concerning the communication between them.  In some cases it has proven to be a challenge to determine under which committee a certain sectoral agreement falls causing delays, that can be costly for businesses.
• The agreements reflect EU laws as they were originally adopted, but have no built-in mechanisms to address future changes, which can be challenging for businesses needing a medium to long term planning horizon. In areas where updates occur, delays can occur as most joint committees meet only once or twice a year. Each committee tends to have limited oversight of what is discussed in the other committees, which can lead to a lack of coverage of certain issues or to duplication of work, leading to further bureaucratic costs.
• There is no official institution to interpret the sectoral bilateral agreements in a universal manner. This creates legal uncertainty and poses a potential barrier to trade.
• The EU and Switzerland have not been able to get an agreement on services although they have planned for negotiations. The free movement of services is covered by the bilateral law only very selectively and under different instruments, despite the potential benefits for both sides. Financial services are wholly outside the agreements, and thus its sector is treated under third country rules.
• The sustainability of the Swiss option is not favoured by the European Commission or by EU Member States. The pressure for change from the Commission focuses on getting a better overall framework for the large number of agreements. Switzerland and the EU are currently discussing changing the relationship by adopting a more comprehensive and coordinated approach encompassing all current bilateral issues between Switzerland and the EU. This could include moving away from the principle of equivalence to adopting the Acquis, adopting the principle of homogeneity for Swiss interpretation of the laws vis-à-vis the European Court of Justice (ECJ) and introducing a type of surveillance mechanism and a dispute settlement- similar to the EEA institutions.
• Although the Swiss are efficient lobbyists in Brussels, the political influence of Switzerland is very low. This means that they have to follow the rules on the areas covered by the bilateral agreements without being able to set the agenda and influence the development of those rules.
• As a general rule Swiss experts are not allowed to sit on EU expert groups. Moreover, lack of information on and notification of new EU legislative proposals that involves even the fields covered in the bilateral agreements limit the possibilities of the Swiss in participating in the decision shaping process.
• The result of the fact that the Swiss are not involved in the practical aspects of EU decision making is that certain developments go unseen by the national administration.

 Swiss Companies listed in the Transparency Register

1. AlpVision SA
2. Axpo Holding AG
3. BLS AG
4. Conceptivity
5. Dufry Group
6. F. Hoffmann La Roche Ltd.
7. FO Fotorotar AG
8. GovFaces SA
9. Landis +Gyr AG
10. Meyer Burger Technology AG
11. Mondelez Europe GmbH
12. Nestlé SA
13. Novartis International AG
14. Swiss Railways
15. Swiss Re Ltd
16. Swissgrid AG
17. Swissport International Ltd
18. UBS AG