Switzerland and the European Union
In keeping with its long tradition of sovereignty and neutrality, Switzerland is one of only a handful of Western European countries that have not joined the European Union. Nevertheless, the ties between Switzerland and the European Union are close.
By Karina Rollins
Switzerland is not a member of the European Union, but that doesn’t mean there aren’t many ties and close connections between the Swiss Confederation and the 28-member union.
Completely surrounded by five European Union states—Germany, Austria, Liechtenstein, Italy, and France—Switzerland maintains a bilateral relationship with the European Union, meaning that the European Union and Switzerland negotiate separate agreements on various issues.
Before the European Union: Major Swiss–EEC Agreements
Today’s Swiss–European Union trade relations are based on agreements between Switzerland and the European Economic Community (EEC), the precursor of the European Union which was formally established in 1992.
-
The 1972 Free Trade Agreement (FTA) created a free trade zone (European Free Trade Area, or EFTA) for industrial products between Switzerland and the EEC, and governs the bilateral trade in processed agricultural products. This FTA is one of the main pillars of trade between Switzerland and the European Union today.
In 2015, 54 percent of Swiss exports went to the European Union, and 72 percent of Swiss imports came from the European Union.
-
The 1989 Insurance Agreement allowed Swiss insurers to open agencies and branches in the EEC, and EEC (now European Union) insurers have the same rights in Switzerland. The agreement applies to casualty insurance—such as homeowners’, motor vehicle, or travel insurance. (Life and pension insurance are excluded from the agreement.)
Bilateral treaties allow Switzerland to work closely with the European Union. By entering into specific contractual agreements, both Switzerland and the European Union gain market access, and collaborate on key issues:
-
The 1999 Bilateral Agreements I led Switzerland toward more economic integration with the European Union. In 1992, the Swiss had declined to join the European Economic Area (EEA), which would have required Switzerland to adopt part of European Union law.
One of the most significant Bilateral I agreements is the Agreement on the Free Movement of Persons. The agreement made it easier for European Union citizens to work, live, and buy property in Switzerland, and vice versa.
-
The 2004 Bilateral Agreements II expanded economic integration to industries not included in the Bilateral Agreements I, such as food and tourism, and established political cooperation on security, tax and financial fraud, asylum laws, the environment, and retirement issues.
With the Bilateral II agreements, Switzerland paved the road to membership in Schengen/Dublin Association Agreement, which Switzerland would formally join in 2008. The 1985 Schengen agreement established a group of European countries among which border controls were abolished. The 1990 Dublin agreement is a European Union law that determines which member nation is responsible for processing asylum requests from non-European Union refugees and migrants. Click here for details.
Changes on the Horizon for Swiss–European Union Relations?
Agreements are not necessarily set in stone—there are amendments to existing ones, or new ones that attempt to adjust to new realities and accommodate to changes, developments, and emergencies, such as the migrant crisis affecting most of Western Europe.
For example, in 2014, the Swiss voted for the “Stop Massive Immigration” Initiative. It required the addition of a new article to the Swiss constitution that states that Switzerland regulates immigration autonomously, and that it may limit the number of residence permits, as well as the right to permanent residence, family reunification, and social benefits. This is not compatible with the Agreement on the Free Movement of Persons. Therefore, this agreement must now be renegotiated; and in 2015, Switzerland adopted a mandate for negotiations with the European Union, the goal being better control of immigration and safeguarding existing agreements.
On June 23, 2016, the British voted in their famous referendum to leave the European Union. Since then, commentators and politicians have filled pages and airwaves with predictions of the pros and cons (mostly cons) of Brexit—for Britain, the European Union, and Switzerland. For some guidance, see: