German industry calls for better EU-Swiss relations

The German industry wants better relations between Switzerland and the EU. [RONALD WITTEK (EPA/EFE)]

In a new position paper, the German trade association BDI advocated for a “package solution” for Swiss-EU relations, which have suffered since the Swiss government walked away from negotiations for a framework agreement in May 2021.

The position paper was released a day before the Swiss foreign minister and current president, Ignazio Cassis, visited Berlin to meet with President Frank-Walter Steinmeier, Chancellor Olaf Scholz, and Foreign Minister Annalena Baerbock on Thursday (20 January).

“Switzerland remains important for European industry,” BDI’s director-general Joachim Lang said in a statement, adding that there were “significant economic disruptions in trade between the EU and Switzerland, especially of medical products and, in the foreseeable future, in machinery”.

“The cooperation should be guided by the three priorities of European strategic sovereignty, the Green Deal, and European competitiveness,” he said.

“In view of geopolitical tensions, a protracted conflict with Switzerland is unnecessary.”

Difficult relations

Switzerland is the EU’s fourth trading partner while the EU is by far the biggest trading partner for the Alpine country, with Germany being by far the most important European market for Swiss imports and exports.

Relations between the EU and Switzerland have been strained since the Swiss government walked away from an institutional framework agreement that aimed at installing more uniform governance of some of the most important bilateral agreements between the two partners.

In Switzerland, concerns about sovereignty, the free movement of people, and the protection of salaries make it difficult to accept a dynamic adoption of EU law and the judicial authority of the European Court of Justice (ECJ).

The EU, meanwhile, insists that EU law be applied consistently by everyone who participates in the single market and that the ECJ be the ultimate arbiter on its interpretation.

Worlds apart: Switzerland and EU keep talking past each other

The Swiss foreign minister was in Brussels to launch a political dialogue between the EU and Switzerland six months after the Swiss government decided to stop negotiations on a framework agreement between the EU and Switzerland.

While the BDI called for a “rapid resumption of constructive talks” between the EU and Switzerland, it backed the EU Commission’s position on all major points of contention.

“A binding dispute settlement mechanism and the uniform interpretation of internal market law by the European Court of Justice are imperative,” Lang said.

Cooperation on research?

However, the BDI’s position paper deviates from the Commission’s position with regards to Switzerland’s exclusion from Horizon Europe, the EU’s research programme.

The Commission currently blocks a full accession of Switzerland to the programme, arguing that Switzerland would first need to make progress on the institutional questions raised by the Commission before advancing on the association to Horizon Europe.

Third countries like Turkey, Israel, and Moldova are all associated with the EU’s research programme, thus enjoying a more privileged status than Switzerland in this regard.

Referring to the strength of the Swiss research sector, the BDI’s position paper argued that “Switzerland should be able to participate on a par with other third countries […] irrespective of the overall relations between the EU and Switzerland.”

Domestic fragmentation

Cassis, was in Berlin on Thursday to talk about the relations between Switzerland and the EU, stressing that, for Switzerland, a constructive relationship with the EU was central.

However, the Swiss government has not yet communicated a plan on how to proceed in the relations with the EU.

Domestically, the politics on this question have become more fragmented. The Christian Democrats and the liberals have recently launched the idea to aim for sectoral agreements instead of an overall institutional framework.

The Social Democrats, meanwhile, argue for a “stabilisation agreement” to secure Switzerland’s participation in EU programmes like Horizon Europe, which would then be followed by negotiations for an “economy and cooperation partnership”.

Finally, while the far-right Swiss People’s Party does not want any closer cooperation with the EU, the Green Party and the campaigning organisation Operation Libero plan to launch a popular initiative to enshrine closer cooperation with the EU into the Swiss constitution.

[Edited by Zoran Radosavljevic]

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