(Bloomberg) -- Switzerland and the European Union agreed on a deal to ensure the country’s access to the bloc’s single market, hitting an unofficial end-of-year deadline after lengthy and intense talks.
It comes more than three years after Switzerland walked away from the last attempt to form a comprehensive accord, a shock move that set back relations between the sides. Without such a treaty, the EU had said it wouldn’t automatically renew bilateral arrangements, threatening disruption in areas like trade.
“In the face of geopolitical instability and global crises, it is a strategic necessity for Switzerland to build stable, predictable relations with the EU,” the Swiss government said in a statement Friday.
Among the sticking points in the talks was free movement of people, with the Swiss government facing domestic pressure on immigration led by right-wing politicians. In response, both sides reached a compromise that includes a reworked safeguard clause. Switzerland said that allows it to “address any unexpected effects of free movement” of people, which is a key EU tenet.
Switzerland also announced the size of its payments to the EU under the package. They will amount to 350 million francs ($391 million) a year from 2030 to 2036. During the transition period up to 2030, Switzerland will contribute 130 million francs a year.
The negotiations additionally covered Swiss payments to the EU, science funding, rail transport and electricity. On the last of those, Swiss business lobbies had pushed for closer cooperation with Brussels to ensure security of supply and strengthen grid stability.
European Commission President Ursula von der Leyen called the deal “historic” as she announced the news at a joint press conference with Swiss President Viola Amherd in Bern. EU and Swiss officials will now work on the legal texts of the documents ahead of the final approval.
The agreement isn’t expected to be discussed in the Swiss parliament until 2026, with a public vote some time after that. That’s likely to be a heated debate amid immigration concerns and warnings about loss of sovereignty from some politicians and a group backed by the three billionaire founders of Partners Group Holding AG.
EU Trade Commissioner Maros Sefcovic said Friday that if Switzerland feels “disproportionate economic consequences” from freedom of movement, both sides will first try to find an amicable joint solution. If that doesn’t work, an arbitration tribunal will be asked to assess the position of both sides.
The formal EU-Swiss talks on the deal had started in March, but are part of a decades-long process that goes back to Switzerland’s rejection of membership of the European Economic Area in a 1992 referendum, which at the time scuppered plans by the government to join the EU. Without an overarching deal, both sides try to manage their economic interconnections with a complicated patchwork of more than 100 bilateral treaties.
“The objectives set for each area of the negotiating mandate have been met,” the Swiss government said. “The successful outcomes of the negotiations, which are in Switzerland’s interests, clear the way for implementation.”
--With assistance from Jorge Valero and Paula Doenecke.
(Updates with government statement, details of agreements starting in third paragraph)
©2024 Bloomberg L.P.