Photo illustration by John Lyman
World News /15 Apr 2019
04.15.19

Let’s Talk about the Swiss Approach to the European Union

In June 2016, the United Kingdom (UK) held a referendum. The citizens voted on whether the UK should leave or remain in the European Union (EU). The result was 51.9% in favor of leaving. Since then, the Britons decided to exit from the EU. However, over a thousand days have passed and yet, British Prime Minister Theresa May has asked to postpone Brexit one more time until June 30, 2019. The EU holds the power to approve the UK request for an extension.

In terms of their relationship with the EU, both the UK and Switzerland have had a long relationship with the bloc. Prior to the EU, Austria, Denmark, Norway, Sweden, Portugal, Switzerland, and the UK, all signed an agreement to establish the European Free Trade Association (EFTA) in 1960. In 1973, the UK left the EFTA to join the European system of economic integration known as the European Economic Community (EEC). During the same year, the free-trade agreement between Switzerland and the EEC came into force. While the UK joined the EU, Switzerland decided on a different strategy which left Switzerland outside of the bloc. In 1992, the Swiss held a referendum on whether to join the EU; the Swiss voted 50.3% against commencing negotiations for EU membership.

Today, Switzerland has a unique relationship with the EU because it is a member of the EFTA, but unlike other EFTA members such as Norway, it is not a member of the European Economic Area (EEA). Because of this, Switzerland enjoys access to the EU’s single market while being under no legal obligation to adopt new EU legislation. Also, Switzerland is outside the EU’s customs union and is still able to strike independent trade deals as it pleases.

The tangled Swiss-EU relationship comprises more than 120 agreements since 1973. One of the most important agreements, the Agreement of Free Movement of Persons (AFMP), came into force in 2002. The AFMP entitles Swiss and EU citizens to choose their workplace and residence freely within the territories of the contracting parties under certain conditions. The AFMP is pivotal because the Swiss economy is dependent on foreign workers and it offers better opportunities for Swiss nationals working in the EU. Also, the AFMP leads to mutual, gradual, and controlled access to labor markets through transitional arrangements and protects employees by ensuring compliance with pay and working conditions in Switzerland.

Two of the main barriers to the UK Withdrawal Agreement are the movement of UK-EU citizens and the return of a physical border between Northern Ireland and the Republic of Ireland. A major concern is that EU migration has been good for the UK, increasing national economic performance and improving public finances. There are roughly 3.8 million EU citizens living in the UK and contributing to the UK economy who need legislative protection to ensure that they can continue to be able to do so. Thus, the UK’s new bill on immigration should take into consideration EU immigrants who, after Brexit, will not have an automatic right to residence and work, as they do under freedom of movement within the EU.

Today, the UK has two immigration systems: EU citizens allows the free movement of people within the EU area and non-EU citizens are regulated by UK immigration law. Thus, EU citizens have the same rights as UK citizens, including the right to send their children to school, to use the National Health System, to go to university, to claim benefits, to work and move freely. The major issue on the new bill is that it grants the Home Secretary the power to decide whether settled EU citizens who arrived prior to March 29, 2019, have the same rights as they do now. There is no obligation or legislative protection to guarantee that EU citizens will continue having the same rights. If the UK decides to follow Switzerland’s model, European citizens living in the UK and UK citizens living in the EU may not have the right to live and work in their current place of residence which has been disrupted by Brexit. Since 2002, citizens of EU member states or EFTA countries such as Iceland, Liechtenstein, and Norway have the right to visit, live and work in Switzerland, although some restrictions apply for newer EU members and all EU/EFTA need a residence permit for longer stays.

Switzerland has a population of 8.48 million, of which 2.1 million are foreigners – and more than two-thirds of them are from the EU and EFTA countries. The high number of foreigners makes Switzerland a cosmopolitan migrant society. According to Fortune Magazine, Switzerland is home to some of the largest global companies. It has one of the highest concentrations of Fortune 500 companies. An influx of skilled EU immigrants has been beneficial to highly qualified Swiss nationals. Almost one in three employees in Switzerland holds a foreign passport. At the same time, the country takes pride in having one of the most innovative economies in the world. The Swiss neutrality preserves the free movement of people, which is an essential part of its ties with the EU – Switzerland’s biggest trading partner and lifeblood for its export-reliant economy.

However, not all Swiss agree with it. In 2014, the Swiss adopted the popular initiative against mass immigration in order to curb immigration and quotas which was led by Swiss People’s Party (SVP), the dominant national-conservative and right-wing populist political party. The initiative was approved by 50.3% of voters. Although some Swiss feel like losing their jobs for EU nationals, the Swiss unemployment rate is low compared to EU countries, 3.5% among Swiss nationals and 7.5% among foreigners; whereas in the EU unemployment is 6.6% and in the eurozone, 8.0%. The EU has responded by playing hardball with Switzerland on the country’s attempts to limit free circulation of people across the border, by presenting a new framework agreement which would hinder Switzerland’s unique position to deal with the bloc. This Swiss-EU new framework envisages making Switzerland join the energized EU. Without the migrant labor force which contributes to vital taxes, jobs, investment, and expertise, the Swiss economy would collapse.

Though the UK has a more robust economy than Switzerland and its exports and imports with the EU are of a different magnitude, the migrant labor force has also boosted the UK’s economy in the last decades. Furthermore, the fact that Switzerland accepts freedom of movement with the EU and partakes in several other accords with the EU presents a viable alternative and could be emulated by the UK.

If you're interested in writing for International Policy Digest - please send us an email via submissions@intpolicydigest.org