¶ Options Examined and Package Approach
Source: Dispatch 26.023, Chapter 1.2 (pp. 38--42)
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¶ Summary
After the end of the InstA negotiations, the Federal Council examined four fundamental options for Switzerland's future relationship with the EU. It concluded that continuing the bilateral path is the most suitable option -- offering the most balanced ratio between economic benefit and political room for manoeuvre.
¶ The five options
¶ 1. Do nothing (status quo)
Remaining passive does not mean maintaining the status quo. As the EU no longer updates existing internal market agreements, these would lose value in the medium and long term. The current edifice of bilateral agreements would eventually be reduced to a mere rump -- with the 1972 Free Trade Agreement at its centre.
¶ 2. Pure free trade relationship
Switzerland would reduce its economic integration with the EU to a lower level. Essentially, only the removal of tariff barriers to trade (customs duties and quotas) would remain. Without legal harmonisation, the Swiss economy would face new non-tariff barriers to trade. The gain in political room for manoeuvre would be comparatively modest.
¶ 3. Continuation of the bilateral path
The approach pursued since the 1990s: creating conditions similar to the internal market in selected areas and cooperating in further fields. Gaps remain, but the essential needs of the Swiss economy are met. Switzerland has been able to preserve its political room for manoeuvre.
¶ 4. Accession to the EEA
Switzerland would participate not only in selected areas but in the majority of EU internal market law, including horizontal policies such as state aid. In the EEA, the obligations regarding the dynamic adoption of law are significantly more extensive than in the bilateral path, and the rights to participate in shaping the law are more limited.
¶ 5. Accession to the EU
Switzerland would gain full internal market participation and access to all EU cooperations. However, the limitation of the framework for autonomous decision-making would be considerable. Direct democracy and federalism would be de facto weakened.
¶ Decision: bilateral path with package approach
On 23 February 2022, the Federal Council decided to address the open issues with the EU on the basis of a broad package approach:
- Vertical approach for institutional questions: elements are embedded in the individual internal market agreements (rather than in a horizontal framework as in the InstA)
- Stabilisation component: Institutional elements, state aid, updating of existing agreements
- Development component: New agreements (electricity, food safety, health), cooperations (research, space), Swiss contribution
- Further cooperation: High-level dialogue, parliamentary cooperation