Staff June 10, 2021

But for the fact that formally they were not members, we would now be talking of them as "Swexit", the second blow to the EU after Brexit.

On Wednesday two weeks ago, Switzerland cancelled talks to salvage a long-delayed cooperation agreement with the EU, saying that it could not accept Brussels' demands on issues like citizen's rights and wages.

“Taking into account consultations and based on the results of negotiations in recent months, the [Swiss] Federal Council has determined that the talks with the EU ... have not led to the necessary solutions," Swiss President Guy Parmelin told reporters in Bern. "The Federal Council has therefore decided to terminate the negotiations on the draft institutional agreement."

Foto ParmelinThe so-called framework agreement had been negotiated between 2014 and 2018 and was supposed to upgrade EU-Swiss relations - which are currently governed by a patchwork of bilateral treaties - in the areas of seamless travel, mutual recognition of industrial standards, agricultural products, state aid, medical devices, civil aviation and land transport.

Instead, the failure to finalise the agreement could have a negative effect in all of those areas as the various treaties governing each become outdated. Switzerland is the EU's fourth-largest trading partner, while Switzerland trades more with the EU than anyone else. The spiked talks also signal a tenser Swiss-EU relationship may be on the horizon.

Even though both sides reached a draft deal covering all subjects in 2018, the implementation of the treaty had been put on hold as the Swiss Government said it needed to consult domestic partners on the deal's implications. Following these talks, Bern made specific demands on three areas - state aid rules, EU citizens' ability to access the Swiss welfare system and protection of higher Swiss wages. Both sides have since tried to address these issues, to no avail.

High-level talks between Parmelin and European Commission President Ursula von der Leyen failed last month to bridge the gaps, as the Commission said the Swiss demand to deal with the three issues outside of the broader deal was "simply not acceptable."

In a statement on Wednesday, the Commission expressed its disappointment over the Swiss decision: "We regret this decision, given the progress that has been made over the last years to make the Institutional Framework Agreement a reality."

It said the "core purpose" of the deal "was to ensure that anyone operating in the EU single market, to which Switzerland has significant access, faces the same conditions. That is fundamentally a matter of fairness and legal certainty."

The Commission also issued an indirect warning that the rejection of the deal would have consequences for Switzerland, cautioning that the framework agreement had been "essential for the conclusion of possible future agreements regarding Swiss further participation to the single market, and also an essential element for deciding upon further progress towards mutually beneficial market access,” and predicted that EU-Swiss relations will deteriorate as a result.





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