Switzerland Rules Out FTA With EU
The Swiss Federal Council has concluded that a free trade agreement with the European Union (EU) would be a step backwards and cause uncertainty.
The Council was responding to the postulate of Council of States member Karin Keller-Sutter. The postulate mandated the Federal Council to analyze the pros and cons of an FTA between Switzerland and the EU and compare the proposal with the current bilateral agreements.
In the resulting report, the Council considers a “comprehensive free trade agreement” scenario based on the concept that easier EU market access is feasible without the need for Switzerland to incorporate EU law or equivalent regulations through harmonizing legislation.
The Council said that Switzerland’s bilateral agreements with the EU have created conditions for Swiss suppliers in a number of areas that are similar to those of an internal market. By contrast, an FTA without harmonizing legislation would rule out certain areas of market access, such as technical barriers to trade, customs security, the free movement of people, and the mutual facilitation of market access in certain service sectors. Negotiating the inclusion, in an FTA, of each element of the current bilateral agreements would depend on the willingness of both parties and would need to meet the interests of both sides.
The Council added that the goal of greater regulatory autonomy within the framework of a comprehensive FTA would only be formally guaranteed. It said that avoiding unnecessary divergences between Swiss and EU law is crucial for a small, export-dependent national economy such as Switzerland. Without the bilateral agreements, the disadvantages of having no contractual recognition of harmonized legislation would be significant.
The Council established that the bilateral agreements serve Switzerland’s interests to a far greater extent than a comprehensive FTA could. They constitute a tailor-made legal framework that takes account of the close economic and political ties between Switzerland and the EU, as well as the country’s geographical location in the heart of Europe, it said.
Source: taxNews – Switzerland Rules Out FTA With EU
