ZURICH(Reuters) – The European Union and Switzerland – the bloc’s fourth largest export market – reached a political deal on Friday to overhaul their trade ties, setting in motion a lengthy approval process.
The two hope to formally conclude their negotiation in the spring after which the package of measures faces parliamentary hurdles and a likely referendum in Switzerland.
Here is what it contains:
NEW AGREEMENTS ON ELECTRICITY, FOOD SAFETY AND HEALTH
An electricity deal that has been long in the making integrates Switzerland into the bloc’s grid, helping stabilise networks and allowing the EU to draw on Swiss hydropower.
The accord worries some Swiss grid operators, who fear disadvantages from market liberalisation.
An agreement on food safety provides for Swiss access to the European Food Safety Authority and reduces trade barriers.
An accord on health addresses cross-border threats by improving crisis prevention and ensuring continuous cooperation between EU and Swiss authorities.
DISPUTE RESOLUTION
Fulfilling a central EU demand, Switzerland agreed on a mechanism to align laws with relevant EU legislation, subject to constitutional safeguards, and on a way to handle disputes.
If a joint EU-Swiss committee fails to solve a dispute, cases will move to an arbitration panel, which must consult the Court of Justice of the European Union for interpretation.
Both parties can take proportionate measures across market access treaties to compensate for imbalances stemming from an unresolved dispute.
Swiss opposition to the deal has centred on the argument that Switzerland should not be subject to the dictates of EU courts that infringe on its ability to set policy.
‘PROTECTION CLAUSE’ ON IMMIGRATION
Swiss officials have been seeking to agree terms under which they can control immigration from the EU, a sensitive topic for the bloc as officials worry that notable concessions would encourage member states to seek their own opt-outs.
The Swiss government said it secured a protection clause to address serious economic or social issues relating to immigration using an arbitration mechanism.
The EU can take proportionate measures to compensate for Swiss restrictions on immigration that it does not agree on. Such measures could no longer target areas beyond market access like research or health, the Swiss government said.
RESEARCH, STATE AID
When Switzerland refused to sign a previously negotiated deal with the EU in 2021, it lost access to the bloc’s research, innovation and educational programs. The new deal reinstates Switzerland’s participation.
Furthermore, the deal clarifies rules and exceptions around state aid to bolster weak regions or promote green technologies.
SWISS FINANCIAL CONTRIBUTION
The price tag for Swiss market access to the EU was long open. Switzerland said on Friday it would pay 350 million Swiss francs ($391 million) a year from 2030 after a transition phase.
Switzerland has financed development projects in Eastern Europe since 2007, paying 130 million francs a year. Switzerland has described this sum as a voluntary contribution. Under the new deal, the contributions are legally binding.
RATIFICATION
Switzerland said it may split up the deal into different packages for approval, submitting new sections and updates to existing accords separately.
Parliamentary consideration is expected to start in 2026 and the deal is almost certain to face a national referendum.
Lawmakers backing a deal are nervous it could become a focal point of federal elections in 2027. Some therefore want to ensure that there is no referendum before 2028.
A ratified deal may come into force in 2030.
Opposition comes from the political right, which has long depicted the EU as an over-regulated and bureaucratic threat to Switzerland’s market economy. Labour unions may also oppose the deal, arguing it risks undercutting wages.
($1 = 0.8946 Swiss francs)
(Reporting by Ariane Luthi and Dave Graham; Editing by Catherine Evans)
