Swiss aim for EU treaty deal only in 2019 as talks stall

FILE PHOTO: Swiss flag is pictured next to Jet d'Eau and Lake Leman from the St-Pierre Cathedrale in Geneva
FILE PHOTO: A Swiss flag is pictured next to the Jet d’Eau (water fountain), and the Lake Leman from the St-Pierre Cathedrale in Geneva, Switzerland, June 5, 2012. REUTERS/Denis Balibouse

November 28, 2018

By Michael Shields

ZURICH (Reuters) – The Swiss government aims to clinch a deal with the European Union on a new treaty governing relations in 2019, it said on Tuesday, again pushing back the timetable for an accord that both sides had intended to conclude this year.

Prospects for a treaty setting out Switzerland’s ties to its biggest trading partner faded last month when four years of talks yielded no breakthrough.

The EU wants neutral Switzerland to ease rules that protect high Swiss wages against cross-border competition from skilled labor. Swiss unions are fighting this tooth and nail.

The talks have been complicated by Britain’s separate negotiations on EU divorce terms, with the European Commission loath to be soft on the Swiss for fear of providing ammunition to Brexiteers.

The Swiss cabinet is due to address the situation on Friday, with leaders of all four coalition parties expressing scepticism that a deal can emerge this year ahead of elections in both Switzerland and for the European Parliament in 2019.

Unlike Britain, Switzerland has a patchwork of 120 sectoral accords with the EU that remain in effect even if treaty talks fail.

But Brussels has been pushing for a decade for a treaty that would sit atop those accords and have the Swiss routinely adopt changes to single market rules. It would also provide a more effective platform to resolve disputes.

“Negotiate with me, wrap it up with me,” European Commission President Jean-Claude Juncker, whose term ends next year, said in September. If a deal was not done soon, “it could really get bad”, he added.

“The ball is now in the Swiss court,” a Commission spokesman had said on Monday, adding no more negotiations were foreseen.

The Swiss government has been wrestling with the treaty talks, which ran aground because of opposition from both the anti-EU far right and the usually pro-Europe center left.

Brussels has threatened punitive measures – including refusing to roll over recognition of Swiss bourse rules beyond the end of 2018, crimping cross-border trading – should the talks fail, prompting Swiss retaliation.

A treaty would focus on five areas: free movement of people, civil aviation, land transport, mutual recognition of industrial standards and processed farm goods. It would also provide a more effective platform to resolve disputes.

Failure to strike a deal would mean no increase in Swiss access to the single market, dashing hopes for an electricity union. It could also endanger unfettered EU market access for Swiss makers of products such as medical devices if pacts on mutual recognition of standards lapse.

In a summary of its policy objectives for next year, Switzerland also said it was following Britain’s exit from the EU closely and would prepare proposals on future bilateral ties.

(Editing by John Miller, William Maclean)

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