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“Taking into account [domestic] consultations and based on the results of negotiations in recent months, the [Swiss] Federal Council has determined that the talks with the EU ... have not led to the necessary solutions," Swiss President Guy Parmelin told reporters in Bern. "The Federal Council has therefore decided to terminate the negotiations on the draft institutional agreement."
The so-called framework agreement had been negotiated between 2014 and 2018 and was supposed to upgrade EU-Swiss relations — which are currently governed by a patchwork of bilateral treaties — in the areas of seamless travel, mutual recognition of industrial standards, agricultural products, state aid, medical devices, civil aviation and land transport.
Instead, the failure to finalize the agreement could have a deleterious effect in all of those areas as the various treaties governing each become outdated. Switzerland is the EU's fourth-largest trading partner, while Switzerland trades more with the EU than anyone else. The spiked talks also signal a tenser Swiss-EU relationship may be on the horizon.
Even though both sides reached a draft deal covering all subjects in 2018, the implementation of the treaty had been put on hold as the Swiss government said it needed to consult domestic partners on the deal's implications. Following these talks, Bern made specific demands on three areas — state aid rules, EU citizens' ability to access the Swiss welfare system and protection of higher Swiss wages. Both sides have since tried to address these issues, to no avail.
High-level talks between Parmelin and European Commission President Ursula von der Leyen failed last month to bridge the gaps, as the Commission said the Swiss demand to deal with the three issues outside of the broader deal was "simply not acceptable."
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