All eyes in Bern are on Jean-Claude Juncker’s visit to Switzerland on September 19; Bern hopes for a compromise on freedom of movement of EU citizens.
The question is how much scope the European Commission President will allow for such as compromise. And such a compromise could have a bearing on Brexit negotiations.
Free movement of labour
Any deal would set a precedent directly relevant to Brexit negotiations, although Britain sustains it is seeking its own unique relationship with the EU.
Officials in Bern have been trying to implement curbs on EU migrants following the results of 2014 referendum, a political context directly comparable to Brexit. But, the EU is making no concessions, former Bank of England policy maker Adam Posen warned on Tuesday. Speaking to Bloomberg Posen said the European Commission was playing “hard ball” with Switzerland even before Brexit.
25% of the residents of Switzerland are foreign nationals. Bern now hopes to come to an agreement under which the current resident of Switzerland – Swiss or EU citizens – will have preferential access to its job market.
The Swiss People’s Party (SVP) that spearheaded the anti-immigration campaign in 2014 opposes the deal and wants a clear cut quota system. If such a deal makes it through the parliament despite SVP opposition, the far-right party could still collect 50,000 votes to force a second referendum on the issue.
The Leave campaign in the U.K also advocated an effective “quota” system, speaking about an Australian-inspired regime, with a point system and a quota of how many skilled and unskilled workers could immigrate per year.
From the G20 Summit in China, Theresa May ruled out a point system on Tuesday. Signaling a Swiss-type compromise, the British Prime Minister said that a point-based system would entitle anyone who met the criteria entry in the U.K, which was undesirable. Instead, the British government would end “free movement” without necessarily ending preferential rights of residence for EU nationals after Brexit. No further detail was provided.
Meanwhile, there is in Switzerland an initiative calling for a second referendum to annul the 2014 result. Since 2014, a third of those who backed a quota on EU migrants would change their vote to preserve Switzerland’s special access to the Single Market.
The call for a second referendum in the U.K has a number of supporters, but no political momentum. Theresa May has time and again excluded this possibility.
The Remain campaign has now been succeeded by the “Open Britain” campaign who in a letter to the Sunday Times last week admitted that Leave was a vote that calls for a managed migration regime. Therefore, the campaign now urges the government to do its utmost to retain membership – which is more than the Swiss have – of the Single Market.
Rebranding itself as the “Open Britain” campaign, the group is calling for a migration regime that is “open to talent” but shields the labour market from “excessive competition.” Supporters include former ministers Anna Soubry (Conservatives), Norman Lamb (Liberals), and Pat McFadden (Labour).
About cherry picking
For both the Swiss and the British, what is at stake is access to the Single European market. France’s foreign minister in 2014, Laurent Fabius, said the EU would review its relations with Switzerland if it moved to curb EU immigration rights. The German foreign Minister Frank-Walter Steinmeier warned that “cherry-picking with the EU is not a sustainable strategy.”
The very same term – “cherry picking” – was used by the French and German governments in relation to Britain.
Switzerland exports 60% of its goods to the EU, selling everything from cheese to drugs, as well as all kinds of services, including financial services of the kind London is interested in. “Passporting” comes at a price.
Switzerland’s “special relationship” with the EU has been built through seven interlinked agreements negotiated since 1999. If one agreement goes, the package collapses. The relationship is worth for Switzerland 32 bn francs (€29,3 bn). Britain is in fact less dependent on EU trade. About 44% of UK exports in goods and services went to the EU in 2015, worth £220 bn (€261).
The cost of free movement of people
In these directly comparable negotiations there is a significant difference.
Unlike Switzerland, Britain has opted out from Europe’s Schengen area for free movement. There is now a thought of introducing a passenger registration system for those traveling within Europe – based on the US ESTA system – that could fetch €500-to €2bn per year, depending on the fee and could somewhat offset the losses from British contributions to the EU budget.
And that bill would be picked up primarily by the 30 million people visiting Europe who, like Britons, do not require a visa for EU entry.
(Bloomberg, The Guardian, The Sunday Times, The Independent)