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Evolution without membership

Referendums in Switzerland and legislative changes in the EU make for a fragile co-operation.

Switzerland’s relationship with the European Union is sometimes described as an example of integration without membership. On the economic side, the integration is evident from the numbers: the EU accounts for most of Switzerland’s trade. But if integration implies cohesion, it is hard to apply the word to Switzerland’s institutional ties with the EU.

Over time, what has emerged is not a consolidated system, but an ad hoc arrangement built on layers of different agreements. One of the lower layers was laid in 1960, when Switzerland joined the European Free Trade Association (EFTA). Another was added in 1972, when Switzerland struck a free-trade agreement with the EU that remains in place. In 1992, voters scuppered the government’s bid to join the European Economic Area (EEA), which gave other members of EFTA – Norway, Iceland, and Liechtenstein – the same access to the European market as EU member states but without the decision-making power.

Since then, Switzerland has sought, in effect, to create the equivalent of EEA membership through bilateral agreements. It agreed one set of bilateral agreements in 1999 and another in 2004. Ostensibly, the 1999 package has seven subsidiary agreements, with nine in the 2004 package. Overall, though, the packages contain a total of more than 100 agreements.

This edifice is fragile. If Switzerland cancels one agreement, it cancels all agreements in that package. While this ‘guillotine clause’ might seem to create a strong incentive for Switzerland not to pull out, the frequency of referendums in Switzerland increases the chances of the guillotine falling.

There are other problems. One is more theoretical than real: the content of Swiss-EU agreements has not evolved very differently from EEA agreements. The bigger issue is that in many of the areas covered by Switzerland’s bilateral agreements, the EU’s legislation changes often, requiring frequent amendments to the agreements, a process that absorbs a great deal of parliamentary time in Switzerland and institutional time in the EU. In particular, the EU’s waves of enlargement have repeatedly forced Switzerland to re-visit its labour and travel rules, ensuring persistent controversies.
Perhaps last weekend’s announcement by Christoph Blocher – the man most responsible for the
‘No’ votes to Swiss membership of the EEA and of the EU in 1992 – that he will be leaving Switzerland’s “bureaucratic” parliament will make it easier for Switzerland to join Norway in the EEA one day.

But, for the foreseeable future, the EU is likely to have to console itself that at least this most tailor-made of relationships is very valuable: Switzerland is the EU’s fourth-largest trading partner, behind the United States, China and Russia.