First glance

EU-Switzerland: a new approach to partial integration into the single market?

The new EU-Swiss agreement breaks new ground, and could offer lessons for the EU-UK relationship

Publishing date
29 January 2025
The Switzerland and Europian Flags Near the Court of Swiss Confederation in Bern, Switzerland

This spring, the European Union and Switzerland are expected to initial an agreement to modernise their relationship, following the wrapping up of negotiations in December. Here we explore what this agreement will look like and why it matters. A deeper analysis, including potential implications for the EU-United Kingdom reset, will follow once the agreements are published. 

The package updates the agreements on air transport, land transport, free movement, conformity-assessment and agricultural trade that give Switzerland privileged access to the EU internal market. It also introduces new single market agreements on food safety and electricity, Switzerland’s financial contribution to economic and social cohesion in the EU and Swiss participation in EU programmes. Switzerland is not expected to ratify the agreements before 2027 and will likely have to hold a referendum.  

The EU has been trying for a long time to make the sectoral agreements that gave Switzerland privileged access to the internal market more coherent. In 2021, the Swiss Federal Council decided to end negotiations on an institutional framework agreement. This agreement would have established a common institutional framework for dynamic regulatory alignment, dispute settlement and state aid rules. Negotiations were re-started in March 2024  on the basis of a  ‘Common Understanding’ reached in October 2023. Under the new approach, institutional provisions are incorporated into each sectoral agreement. Though largely identical, they can be adapted for each sector. State aid rules only apply to the transport and electricity agreements. 

This is the first time the EU has concluded an agreement with a major trading partner based on dynamic regulatory alignment outside the context of the European Economic Area (EEA). Unlike the EEA agreement, the agreements with Switzerland exclude important areas of the single market – namely, most of the service sector and trade in goods beyond the scope of the food-safety and conformity-assessment agreements. The areas of EU regulation that have seen the most significant activity in recent years – digital and environmental policy – do not have to maintain dynamic regulatory alignment.

The previous EU-Switzerland single market agreements did not include a legal obligation to bring legislation into line with new EU regulations, although in practice Switzerland regularly adapted its laws to maintain alignment. Under this new approach, Switzerland commits to regulatory alignment with new EU legal acts that fall within the scope of the different sectoral agreements. The EU can bring concerns about the Swiss transposition of EU laws to the Joint Committee, composed of EU and Swiss officials, and, if necessary, bring the issue to the newly established arbitration tribunal, which is composed of lawyers appointed by both parties. The tribunal must then refer to the European Court of Justice, requesting an interpretation of the relevant EU laws.

Switzerland also has the right to be consulted on legislation that is subject to dynamic regulatory alignment, similar to the decision-shaping rights of the EEA countries. It can also decide not to transpose new EU legislation, but the EU can adopt proportional compensatory measures within one of the single market agreements. Crucially, the ‘proportionality’ of any compensatory measures would be subject to the views of the arbitration tribunal. 

The new set of agreements represent a significant step in the ‘juridification’ of EU-Swiss relations, which is important to Switzerland because of the asymmetrical nature of the relationship. The arbitration tribunal provides important guarantees for Switzerland, and its work goes beyond issues relating to the incorporation of EU law. The changes to the freedom of movement agreement are particularly politically important given that it is the most sensitive aspect of the relationship. Switzerland has negotiated some flexibility regarding the 2004 Citizens’ Rights Directive (2004/38/EC). There is also a safeguard clause which no longer requires both parties to agree in the Joint Committee. Where there is disagreement, it falls to the arbitration tribunal to determine if the conditions for the safeguard are met subject to the EU’s right to adopt a proportionate compensatory measure. 

The aspect of the package most relevant to the EU-UK reset is the new agreement establishing a Common Food Safety area. The scope is very broad and covers all regulations relating to food safety. EU rules will apply to the movement of animals, plants, food and feed between the EU and Switzerland, and Switzerland will be able to participate in the EU Food Safety Agency. There are other agreements that relate to areas of potential UK interest – notably the electricity agreement and the conformity-assessment agreement. The broader question is whether this model of partial integration in the single market agreed by the EU and Switzerland could offer a medium-term perspective on how to structure the EU-UK relationship. 

About the authors

  • Ignacio García Bercero

    Ignacio García Bercero joined Bruegel as a Non-resident fellow in September 2024.

    Active at the European Commission since 1987, he participated in the Uruguay Round negotiations and was subsequently posted in the EU Delegation to the United Nations in New York. Upon his return to Brussels he worked in the preparation of what eventually became the Doha Development agenda and was head of unit for legal affairs and WTO dispute settment. 

    From 2005 until 2011 he was Director responsible for the areas of Sustainable Development, Bilateral Trade Relations (South Asia, South-East Asia, Korea, Russia and ex-CIS countries, EuroMed and the Middle East). He was also the Chief Negotiator for the EU-Korea and EU-India Free Trade Agreements. From 2012 he was responsible for overseeing EU activities in the field of Neighbouring countries, US and Canada and was Chief negotiator for the Transatlantic Trade and Investment Partnership.

    Mr García Bercero has written several papers and publications on WTO matters, including WTO reform, Dispute Settlement, Competition Policy and Regulatory Cooperation

    In 2020 he has completed a Fellowship at Saint Anthony’s College Oxford where his research focused on WTO reform. Since 2021 he is Visiting Professor in the Department of Political Science of the University College London and Visiting Senior Fellow at LSE Ideas, London School of Economics and Political Science.

    Mr García Bercero holds a Law Degree from the Law Faculty of Universidad Complutense, Madrid and a Master of Laws Degree (with Distinction) from University College, London.

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