Switzerland is unlikely to sign its own trade agreement with the EU prior to Brexit, according to Economy Minister Guy Parmelin.
In a statement to Sonntags Zeitung, Parmelin expressed pessimism as social partners – unions, employers’ associations, and cantons – have been unable to come to a unified position that would allow negotiations to resume.
The failure to reach an agreement will prolong the current crisis in EU-Swiss relations: since July 1, EU companies are banned from floating their stocks in the Swiss Stock Exchange and Switzerland has retaliated in kind.
The EU has called into question Swiss “equivalence,” that is the recognition that Swiss institutions are in compliance with norms and standards accepted by EU member states. That kind of “equivalence” is time-limited and entirely in the hands of the Commission rather than EU member states. This can be seen as a preview of what London is to expect come November 2019.
There is fear of escalation as Brussels takes further steps to force Bern to sign onto an agreement negotiated over four years, but cannot be ratified, as in the case of the UK. The EU now threatening to ban Swiss research institutions from participating in research programs.
As in the case of the UK, the main policy cleavage between Bern and Brussels is immigration policy. Officials in Bern have been trying to implement curbs on EU migrants following the results of a 2014 referendum, a political context directly comparable to Brexit. 25% of the residents of Switzerland are foreign nationals, most of whom EU born.
The EU has made clear that there is no “cherry-picking” when it comes to access to the Single Market, insisting on freedom of movement, capital, and people, just as in the case of the UK.
As a halfway compromise, Bern has been negotiating preferential access to its job market for the residents of Switzerland, irrespectively of their nationality. For Brussels, even this limitation has been problematic. Still, the outgoing President of the European Commission, Jean-Claude Juncker, has been keen to see the completion of negotiations before his departure on October 31.
According to Parmelin, a deal by October 31st – the day the UK is due to leave the EU is not likely for three reasons. First, the Swiss go to the polls in October; secondly, the new government in Bern must appoint a new negotiating team, whilst there is a change of guard at the European Commission itself. Last but not least, Switzerland is to hold a second referendum on the free movement of EU citizens early next year.
Palmerin is a member of the Swiss People’s Party (SVP) that spearheaded a 2014 anti-immigration campaign opposing a deal over immigration with the EU and advocating for a quota system. This echoes the demand by The Leave campaign in the U.K that is calling for an Australian-inspired and skills-based point system.
Should the Euro-Swiss standoff escalate – resulting in Swiss institutions being excluded from all common research and mobility programs – Palmerin is threatening to seek alternative arrangements, perhaps in cooperation with the UK. However, he is also known to be sceptical of the British joining the European Free Trade Area (EFTA), as London would be likely to dominate the club.