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The Institutional Gap

Summary: The more than 120 bilateral agreements between Switzerland and the EU have no common institutional umbrella. A uniform dispute resolution mechanism, dynamic legal alignment and independent oversight are all lacking. The attempt to close this gap with an Institutional Framework Agreement (InstA) failed on 26 May 2021.

The Problem: Agreements Without an Umbrella

The bilateral treaty architecture between Switzerland and the EU comprises over 120 agreements that were individually negotiated over decades. Each agreement has its own Joint Committee, its own rules and its own dynamic. What is missing is an overarching institutional framework [1].

Three central mechanisms that are standard in modern international relations are largely absent from the bilateral agreements:

1. No Uniform Dispute Resolution

In the event of disagreements over the interpretation or application of an agreement, there is no independent court and no arbitration procedure. Disputes are handled in Joint Committees -- parity-based political bodies in which both sides must find a consensual solution. If this fails, the dispute remains unresolved [1][2].

2. No Dynamic Adoption of Law

The agreements reflect the EU's legal status at the time of signature. When the EU develops its regulation further, the agreements become outdated. An adjustment requires formal negotiations and the agreement of both sides in the Joint Committees. In practice, this leads to a growing divergence in the legal foundations [1][3].

The only exception is the Schengen association: here, Switzerland must adopt developments in the Schengen acquis, otherwise the agreement faces termination [3].

3. No Independent Oversight

There is no independent body that verifies whether Switzerland and the EU are correctly fulfilling their contractual obligations. Oversight lies with the contracting parties themselves -- a system that the EU increasingly regarded as inadequate [2].

The Failed Framework Agreement (InstA)

Negotiations 2014-2018

To close the institutional gap, Switzerland and the EU began negotiations on an Institutional Framework Agreement (InstA) in 2014. This was intended to serve as an "umbrella" over the existing market access agreements for institutional rules. A negotiation result was available on 23 November 2018 [4].

The InstA draft envisaged:

  • Dynamic adoption of EU law in the areas covered by the agreements
  • An arbitration tribunal for dispute resolution (with preliminary rulings from the CJEU on questions of EU law)
  • Uniform oversight of the agreements

The Three Sticking Points

The Federal Council identified three areas where "substantial differences" existed [4]:

Sticking point Problem
Wage protection The EU demanded the adoption of the EU Posting of Workers Directive, which would have partially called into question Swiss flanking measures (8-day rule, deposit requirement). The trade unions rejected this.
Citizens' Rights Directive The EU demanded the adoption of extended residence rights for EU citizens, which could have had implications for social welfare.
State aid The EU wanted to introduce state aid rules that would have restricted cantonal sovereignty over subsidies and tax concessions.

Consultation and Termination

The consultation on the InstA (2019) produced mixed results. Business associations broadly supported the agreement, trade unions rejected it because of wage protection, and the SVP opposed it fundamentally as a "subjugation treaty" [4].

On 26 May 2021, the Federal Council informed the European Commission that it would not sign the institutional agreement. In its statement, it explained:

"The Federal Council is of the opinion that no solution could be found on the three remaining open points -- state aid, wage protection and the Citizens' Rights Directive." [4]

Reactions

The termination triggered controversial reactions:

Supporters of the termination:

  • The SVP welcomed the decision as a "liberation" and a rejection of "foreign judges"
  • The trade unions (SGB, Travail.Suisse) saw wage protection as saved

Critics of the termination:

  • Business associations (economiesuisse, Swissmem) warned of erosion of the bilateral path
  • FDP and the Centre regretted the decision and demanded an alternative quickly
  • Academics such as Christa Tobler (University of Basel) pointed to the risks for market access [5]

Consequences of the Failure

The failure of the InstA had immediate consequences:

  1. MRA blockade: The EU no longer recognised Swiss conformity assessments for medical devices (from May 2021)
  2. Research: Switzerland was downgraded to non-associated third-country status in Horizon Europe
  3. Erasmus+: Participation remained blocked
  4. Political standstill: The bilateral relations were in a phase of uncertainty

These consequences led to the erosion of the existing agreements, which increased the pressure for a new round of negotiations. In March 2022, exploratory talks began that ultimately led to the Bilateral Agreements III.

Sources

[1] EIZ Publishing (2022). Current scope for an institutional framework agreement. Europa Institut Zurich. [Open Access]

[2] FDFA (2026). Decisions of the Joint Committees. Federal Department of Foreign Affairs. [Open Access]

[3] Langer, Lorenz (2022). Democratic participation in the bilateral relationship. University of Zurich, Europa Institut. [Open Access]

[4] Federal Council (2021). Press release: Federal Council terminates negotiations on the institutional agreement. 26 May 2021. [Open Access]

[5] HKBB (2022). Interview Prof. Christa Tobler: Bilateral path. Chamber of Commerce of Both Basels. [Open Access]

Last updated: March 2026