Switzerland: Reporter discusses collapse of EU trade talks
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Switzerland’s battle with the EU went up a notch this week after its place in the bloc’s European electricity market was cast into doubt. Brussels is currently attempting to push Bern in a certain direction after the Swiss refused to sign a comprehensive agreement to manage trade. With no deal, Switzerland will not be able to participate in the bloc’s power-market coupling, and this week its certificate of origin – which shows whether electricity originated from a renewable source – will no longer be accepted throughout the area.
In May, Bern ended years of talks with the EU aimed at agreeing an overarching treaty.
While Switzerland is not in the bloc, it has signed up to many of its policies, like freedom of movement.
The relationship is made up of more than 120 bilateral deals, with the EU keen on combining these under one roof.
The rejection led an editorial in the Financial Times to conclude that Switzerland will now likely undergo a “slow-motion Swexit,” noting that, “the consequences of Bern’s decision to junk talks with the EU will be a gradual degradation in its market access”.
The fact could now see Switzerland reach out to the UK for advice given Britain’s successful exit from the EU, the country having secured a flexible trade deal.
Johnny Luk, a former Conservative Party candidate, said that the collapse in talks proved that the UK was “right to go it alone”.
Writing in AlJazeera, he suggested the episode revealed the limits of the EU’s approach to negotiations.
He wrote: “The EU, diminished by the United Kingdom’s departure, continues to harbour ambitions for further expansion.
“Switzerland would appear to be an obvious candidate to join the club, with its close geography, liberal philosophies and wealth.
“Yet despite decades of EU political pressure to bolster European unity, it has failed to fully persuade the Swiss, who sought instead to achieve the best of both worlds – a close economic partnership while remaining strictly politically independent.”
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Mr Luk goes on to note how the EU in recent years has struggled to keep a grip on its more “rogue” members like Hungary and Poland, who have consistently undermined its rules and thus weakened its image.
In turn, he said EU top brass have become “jaded” and “defensive”, not willing to be flexible in negotiations and deals with nations.
Switzerland has become a perfect example of a country not bowing to EU pressure.
The bloc has pushed back against decisions made by the Swiss people on several occasions, this remaining firmly in the country’s memory.
In 2014, it narrowly voted to put an end to freedom of movement, demanding quotas for migration, but the bloc swiftly slapped down on the decision and threatened to cut access and funding for various education and science programmes.
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Only last week was Switzerland barred from the EU’s Horizon Europe funding scheme after the collapse in talks.
The threats and withdrawals, Mr Luk argued, prove that the UK was right not to further integrate with Brussels for risk it was pushed into a corner down the line.
He said: “The EU’s defensive mentality stems from its ‘ever-close union’ policy.
“Brussels policymakers have always fantasised about an increasingly centralised political control over member states’ domestic and foreign policies, including defence and taxation.
“The UK foresaw and resisted this, and its departure will only accelerate this agenda.
“This obsession for uniformity leaks into how the EU approaches trade deals with external countries, too.
“The EU will see Switzerland as simply stalling the inevitable, given its economic dependency on the European bloc.
“Without alignment, their respective laws will diverge and trade barriers are already forming.”
Concluding, Mr Luk added: “The EU should take some time for a period of self-reflection during which it should ask itself whether it, rather than the Brits or the Swiss, is the one who is making unreasonable demands.
“Maybe then it would make more friends again. Until then, it makes a good deal of sense for the UK and Switzerland to stay well away from the EU’s institutions.”
Many Swiss opponents of the framework agreement argued that the alignment of rules with the EU would have overturned Switzerland’s system of local and direct democracy.
However, it has been noted that the country has absorbed EU rules for decades.
It also enjoys practically full integration in the single market.
And, according to a study in BertelsmannStiftung, Switzerland benefits more from the bloc per capita than any EU country.
The Swiss government highlighted three reasons for its refusal to sign a new, all encompassing agreement: the protection of wages, rules governing state aid, and the right of EU citizens working in Switzerland to claim Swiss welfare benefits as part of freedom of movement.
Foreign Minister Ignazio Cassis said Switzerland could not accept EU demands for equal rights for EU workers as it would have meant an unwanted “paradigm shift” in Switzerland’s migration policy.
The government also feared it could lead to higher social security costs.
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