The New Framework Agreement between Switzerland and the EU: Mission Accomplished

11 December 2018. In the negotiations leading to the new Framework Agreement, ensuring that direct democracy would be safeguarded in keeping with the Swiss tradition was particularly important for Switzerland. However, this would have gone against the grain of the law-making parts of the agreements dynamically adapting to changing EU law. Yet, such dynamics were precisely what the European Union had insisted upon. The Framework Agreement now provides that new laws enacted by the EU only become applicable under the bilateral agreements after they have been approved in Switzerland in accordance with the Federal Constitution – which may involve a consultation of the Swiss people. As a result, the bilateral law in Switzerland will in the future be anchored more consistently in democracy.

Baking direct democracy into the bilateral agreements marks an important concession on the part of the EU

In conceding that legislative amendment under the bilateral agreement may be subject to Swiss direct democracy the EU has taken an important step towards Switzerland. The EU regards agreements such as those with Switzerland primarily through the prism of participation in the single market. Normally, such participation would be conditioned on EU membership. However, it would be inconceivable – even unlawful – for the EU to accord a Member State the leeway to not apply new EU laws, even if it were for the sake of direct democracy. Nonetheless, the EU yielded on this point and refined its position. The reason for the EU’s concession was probably less the fact that Switzerland is not a full member of the EU, but rather that the adaption of the agreements to new EU law has so far worked relatively well within the framework of the bilateral agreements with Switzerland. The EU further abandoned the idea that the EU Citizenship Directive should be made applicable in relation to Switzerland, which was one of the few contentious points in the past in legislative adaptation. Upon close inspection, the omission of the Directive from the Framework Agreement is to be interpreted to that effect, even though Protocol 2 to the Agreement on the face of it may suggest otherwise.

Switzerland backs down on the rule of law

In contrast, the rule of law and dispute settlement was important to the EU. Switzerland backed down on this point. It emerges in two dimensions in the Agreement: on the one hand, there is the question of the significance of new decisions of the European Court of Justice in the context of the Agreement and, on the other hand, there is the role of the Court of Justice in the settlement of disputes among the parties to the Agreement. In both dimensions, the EU’s had little to no leeway, which has generally been overlooked in Switzerland. The Court of Justice interpreted EU constitutional law from early on to the effect that its new decisions would command full legal authority in the single market however it be expanded to third states, and that the Court of Justice itself is the only court that can authoritatively speak on EU law for the EU. As a result of these rulings, which are rooted in the EU’s constitutional structure, there was no other option for the EU under the Framework Agreement than to bake in both the binding force of future rulings of the Court of Justice as well as the obligation for an arbitral tribunal to submit questions of EU law interpretation to the Court of Justice for compulsory ruling. Any other solution would have exposed the Agreement to the risk of the Court of Justice ruling it unlawful under EU constitutional law. This is apparent from the fact that the recent Withdrawal Agreement of the United Kingdom and the EU – which is the twin agreement of the Framework Agreement – is identical in the terms regulating dispute settlement. (For the Withdrawal Agreement, it being a withdrawal agreement, the option was open to declare the future case law of the Court of Justice as non-legally binding.) Switzerland wisely gave in on these points of rule of law and dispute settlement, although it cannot have been an easy decision. It will make it more difficult to muster support for the agreement in Switzerland, but then again this is a compromise resulting from negotiations – not a wish list that can be shaped arbitrarily.

The rule of law – the cornerstone upon which the EU is built

The role of the EU judiciary as a whole has therefore turned out no longer to be negotiable for the EU. This is due to the fact that the rule of law has become the cornerstone of the EU. It is the courts which, owing to their independence from the often-capricious day-to-day politics, ensure the survival of the core of the EU which is the single market. The EU is juridified more deeply than is generally realised in Switzerland: C’est l’Europe des juges. This also explains the vigorous reactions in the EU to recent attempts by Poland and Hungary to undermine the rule of law.

The most important decision in Switzerland since 1992

The Framework Agreement now needs to be given serious attention in Switzerland. The situation is serious. The decision on the Agreement is undoubtedly the most important decision to be taken in Switzerland, at least since the decision to join the European Economic Area (EEA) in 1992. In fact, it goes beyond that in its importance, since what is at stake is a structure that has developed over more than 25 years - the bilateral agreements - while the vote on the EEA agreement merely concerned Switzerland’s future course. Under the Swiss constitution, it will be decided most likely in a referendum whether or not the Framework Agreement will be ratified - but this decision will be subject to simple majority of the Swiss people and not, as it was the case with the EEA agreement, to a double majority of both the people and the cantons.

An extended period of uncertainty looms in case of rejection

The decision must be taken with a completely sober, open, and unbiased mind unaffected by fear of the future; politically charged concepts such as "sovereignty" or "meddling of foreign powers" should be disregarded. In a similar vein as the with UK Withdrawal Agreement, if the Framework Agreement fails to be approved, Switzerland would going over a cliff. This is not to be taken lightly. As in the case of the UK, one should be deluded into thinking that if the agreement fails to pass, one could simply go on with business as usual under the current bilateral treaties. Switzerland is, indeed, facing a binary decision: either it accepts this Framework Agreement or the bilateral way comes to end. In the latter case, it can be said –and this is not advocating another “project fear” – that a long period of uncertainty would follow. The all-or-nothing situation Switzerland is faced with is due to the growth of the bilateral relations. It has turned out that such a complex contractual edifice cannot any longer be carried forward without effective legal dispute resolution which is removed from the politics necessarily accompanying the relationship. In part, however, the EU’s insistence in this respect also goes back to Switzerland’s lack of reliability in living up to its treaty obligations – yours truly, signed: mass immigration initiative.

No "better deal" possible

Switzerland should strongly resist the idea that the Framework Agreement could be renegotiated. As with the UK Withdrawal Agreement, no “better deal” can be accomplished with better negotiation in the case of the Framework Agreement. The Agreement is what it is. It is about democracy and dispute resolution, nothing more. Whether, in the event of the Framework Agreement having been rejected, the bilateral approach ultimately will come to a formal end through cancellation or whether it will be simply choked off is immaterial to the decision to be taken on the ratification of the Agreement.

The right of every generation to shape its future

The people of Switzerland would do well to consider the decision carefully. Above all, those who will have to live with the decision in the future deserve to be heard, in particular the younger working population, students, families, etc. – which encompasses an important part of those who are sometimes referred to as the "silent majority". One should not make the same mistake as the United Kingdom and listen primarily to the elderly, supposedly more experienced generations. The pending decision is about the right of every generation to shape its future. In this respect, challenges announced as well as pledges of support on the part of the generation that had sacrificed its time and effort to come to a decision on the EEA in 1992 should no longer carry the day. The Framework Agreement is not the EEA, the world today is very different to that of 1992. What is needed now is a new decision, taken without undue influence of the past. Given the vast implications of the decision, it would in particular be advisable to envisage an exceptional lowering of the voting age. From a constitutional perspective, it would be possible to implement this at short notice.

Key points: direct democracy and dispute resolution

The kerfuffle over the provision of short-term services as well as the so-called flanking measures should not distract from the essential points of the Framework Agreement: direct democracy and dispute resolution. EU legislation on the posting of worker within the EU leaves Switzerland considerably more scope than is commonly acknowledged, and this scope continues to be widened in EU law. In particular, it allows Switzerland to impose a minimum wage on foreign service providers, though Switzerland would also have to follow up on this. Protocol 1, annexed to the Framework Agreement, makes further concessions towards Switzerland, in particular by allowing for a four-day notice before service provision. Further administrative hurdles that allegedly cannot be removed must ultimately be seen through the lens of protectionism seeking to deter unwelcome competition by means of bureaucratic obstacles. A fundamental, forward-looking agreement such as the Framework Agreement should on no account be sacrificed on the altar of these narrow interests.    

Thomas Burri is Assistant Professor of Public International Law and European Law at the University of St. Gallen. His fields of research are the EU single market, public international law in general and the legal and ethical implications of artificial intelligence.

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