Switzerland narrowly rejected EEA membership in 1992. It also rejected EU membership in 1997 and 2001 by large margins.
Switzerland’s participation in the EU / EEA internal market has been effected on an ad hoc and partial basis through bilateral agreements with the EU. The current Swiss EU agreement consists of more than 200 bilateral agreements with the EU. It extended the bilateral treaties to the new EU member states. Each extension requires the approval of Swiss voters in a referendum.
The agreements largely contain the same content as the EEA treaties, making Switzerland a virtual member of the EEA. Most EU internal market law applies throughout the EU, the EEA and Switzerland, providing most of the conditions of the free movement of people, goods, services and capital that apply to full member states.
Switzerland does not contribute to central EU funding. Switzerland makes an indirect contribution to states in Eastern Europe pursuant to a memorandum of agreement.
Switzerland replicates EU financial services law in order to secure equivalence under EU legislation. However this does not give it passporting rights.
The Swiss bilateral agreements are based on equivalence of legislation and the adoption of EU legislation and obligations.They are managed through a structure of 15 Joint Committees. The committee’s review agreements in light of developments with EU legislation and the evolving body of law and consider amendments.
Amendments must be legislated for in accordance with Swiss internal legislative procedures. This may require approval by Federal Council Parliament or people in a national referendum.
Bilateral I agreements (signed 1999, in effect 1 June 2002)
- Free movement of people
- Air traffic
- Road traffic
- Technical trade to barriers
- Public procurement
Bilateral II agreements
- Security and asylum and Schengen membership
- Cooperation in fraud pursuits
- Final stipulations in open questions about agriculture, environment, media, education, care of the elderly, statistics and services.
The Bilateral I agreements are expressed to be mutually dependent. If any one of them is denounced or not renewed, they all cease to apply. According to the preamble of the EU decision ratifying the agreements:
The seven agreements are intimately linked to one another by the requirement that they are to come into force at the same time and that they are to cease to apply at the same time, six months after the receipt of a non-renewal or denunciation notice concerning any one of them.
In 2012, EU considered certain Swiss measures to be incompatible with the agreement on free movement of persons. In particular, it noted that, Switzerland had unilaterally reintroduced quotas for certain categories of persons or citizens of the EU 8, (eastern European members who joined in 2004) which is considered discriminatory. The EU urged Switzerland to reverse its decision.
In a referendum in February 2014, the Swiss voters narrowly approved a proposal to limit the freedom of movement of foreign citizens to Switzerland. The European Commission said it would have to examine the implications of the result on EU–Swiss relations since literal implementation would invoke the above guillotine clause whereby all obligations are interdependent
On 22 December 2016, Switzerland and the EU concluded an agreement whereby a new Swiss law (in response to the referendum) would require Swiss employers to take on any job seekers (whether Swiss nationals or non-Swiss citizens registered in Swiss job agencies) whilst continuing to observe the free movement of EU citizens into Switzerland thus allowing them to work there.
In 2014 the EU council reiterated that the system of bilateral agreements had reached this limits and a new institutional framework was needed before any new agreements giving Switzerland further access might be concluded. The EU has indicated that further development of a complex system of agreements, would put a stake in the homogeneity of the internal market and increase legal uncertainty, and has therefore reached its limits.
Further Swiss participation in EU freedoms has largely reached a stalemate, due to unresolved institutional issues, relating to the absence of satisfactory governance and judicial / enforcement structure.
Switzerland replicates significant amount of EU financial services legislation but those not of passporting rights.The institutional structures for the bilateral agreements are said not to be satisfactory.