New old solution for the framework agreement

The decision regarding the institutional framework agreement with the EU is drawing closer. The idea is that it should secure Switzerland's access to the EU's internal market. Among other things, it would govern how Switzerland adopts new EU legislation and how disputes between the EU and Switzerland are settled.

A draft agreement prepared by Swiss and EU negotiators is currently being subjected to consultation. Domestic resistance is substantial. Criticism, for instance, has been levelled at the planned softening of the accompanying measures that protect wages and at the possible adoption of the EU Citizens' Rights Directive, which governs the free movement of EU citizens and potentially goes further than the Agreement on the Free Movement of Persons. Moreover, the planned role of the European Court of Justice in the dispute settlement procedure is also being met with objections, due to questions in some quarters as to its impartiality.

Michael Amb¨¹hl, ETH Professor of Negotiation and Conflict Management, has been working with doctoral student Daniela Scherer on the development of concrete proposals for amendments, which have now been published. They are intended to help overcome the domestic hurdles.

Dispute resolution without the European Court of Justice

In essence, the academics are proposing a simpler dispute resolution procedure than provided for in the draft ¨C one in which the European Court of Justice would no longer have a role. If Switzerland does not ratify a new EU law, Amb¨¹hl and Scherer's proposal would allow the EU to decide on rebalancing measures against Switzerland directly and without prior recourse to a court. At that point, Switzerland would then have the option of having an independent arbitration tribunal examine whether the rebalancing measures imposed are appropriate. Amb¨¹hl and Scherer are proposing the same procedure for cases involving the application of existing EU law.

At a domestic level, this approach could sidestep a point of contention without curtailing the authority of the European Court of Justice. It is worth pointing out that a similar dispute settlement procedure between Switzerland and the EU already exists: the EU agreed to it in the Customs Security Treaty of 2009.

Dynamic adoption of legislation with exceptions

Against this background, Amb¨¹hl and Scherer are advising acceptance of the legitimate concern of the EU, namely the "principle of dynamisation", but with exceptions that are more clearly defined than in the existing draft. And important domestic actors are suggesting that employee protection, the Citizens' Rights Directive and state aid would probably also have to be excluded from adoption. The authors warn that the list of exceptions would have to remain short for such concessions to remain palatable to the EU.

Were Switzerland to adopt EU legislation dynamically and grant rebalancing measures to the EU directly, any political justification for the "guillotine" clause would fall away (under the guillotine clause, all it takes is for one bilateral treaty in a contract package to be rejected or terminated for all the treaties in the package to be deemed rejected or terminated).  "A measure of this nature can hardly be described as appropriate," says Amb¨¹hl.

Further negotiations cannot be ruled out

A question mark hangs over the scope left for negotiations. Amb¨¹hl assesses the question from the standpoint of a negotiator: "As you would expect, the EU is adamant that the negotiations are at an end. Anything else would be tactically inept."

But it would be a mistake for Switzerland to unilaterally discontinue further negotiations: "Only by negotiating do we know whether there is anything left to negotiate," says Amb¨¹hl. The alternative for the Federal Council would be to sign the framework agreement in its present form and submit it to parliament, which would probably lead to a referendum. However, the hypothesis in Amb¨¹hl and Scherer's article is that a "no outcome" in the referendum would be more problematic for future relations with the EU than an agreement rejected by the Federal Council.

Furthermore, from their point of view, there is no reason to hurry: compromises are more conceivable than at present once the EU Commission has been renewed next autumn, the lack of clarity surrounding Brexit has lifted, and the elections in Switzerland have been held.