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Why Did the EU-Switzerland Framework Agreement Fail? by Prof 8 June 2021 Why did the EU-Switzerland Framework Agreement fail? by Prof. Dr. Dr. h.c. Carl Baudenbacher* On 26 May 2021, the Fed‐ free and new EU law is generally only adopted eral Council, Switzerland’s statically. Conflicts are settled in joint commit‐ seven-member govern‐ tees. Nevertheless, according to the understand‐ ment, broke off the seven- ing of both sides, Switzerland has become a par‐ year negotiations between tial member of the internal market. If you want to the EU and Switzerland on understand the conclusion of the two packages, the conclusion of an Institu‐ you have to look to 1992. tional Framework Agree‐ 1992: no to accession Carl Baudenbacher ment (“InstA”). Swiss (Photo: https:// friends of the InstA had to the European Economic Area (EEA) baudenbacher-law.com) tried to prevent this until the Back then, a narrow majority of the people and a end, in part with very questionable means. clear majority of the cantons said no to Switzer‐ Strictly speaking, however, it was the EU that land’s accession to the EEA Agreement. The aim declared the negotiations over in autumn 2018. of this treaty is to extend the EU single market to Since then, absurdly, there have been disputes the participating EFTA States. To this end, these over three substantive side issues. Disappoint‐ states adopt EU law dynamically. They have a co- ment prevails in the EU and its member states. determination right in its development. Import‐ Politicians and the media tend to blame the antly, the EFTA States have their own surveil‐ Swiss. This is the result of the Brussels spin and lance authority (“ESA”) and their own court of the bullshit campaign that the Swiss Foreign Min‐ justice. Experience shows that these institutions istry has been running since 2013. The Commis‐ protect the sovereignty of the EFTA States to a sion reacted ungraciously to the Federal Council's considerable extent. In many cases, the EFTA decision and held out the prospect of counter‐ Court has ruled as the first court in the EEA and measures. the ECJ has frequently followed suit. However, the EFTA Court has sometimes gone its own way The EU concluded two packages of bilateral even where ECJ case law exists. The Federal agreements with Switzerland from 1999 on‐ Council had supported the EEA proposal. How‐ wards, including in the areas of technical barri‐ ever, under pressure from the Swiss Foreign Min‐ ers to trade, free movement of persons, air trans‐ istry (“FDFA”), it submitted an application for EU port and land transport. The latter secures the membership six months before the EEA vote. It EU access to Italy. With the exception of the air was thus was easy for the hardened opponents transport treaty, all these treaties are institution- of integration to argue that the referendum was not about joining the economic EEA Agreement * Carl Baudenbacher is a Swiss lawyer. Since May at all, but the EU, which sought political integra‐ 2018, he has worked as an independent arbitrator tion. and consultant to companies, law firms, govern‐ ments and parliaments, inter alia at Monckton Cham‐ “Docking” of Switzerland with the EFTA Court? bers in London. In 2020, he was appointed Visiting The Federal Council officially pursued the goal of Professor at the London School of Economics (LSE). In May 2021, he became Senior Partner of Bauden‐ EU accession after the rejection of the EEA. How‐ bacher Law, Zurich. ever, there was never a majority of voters and From 1995 to April 2018, Baudenbacher served as a cantons in favour of this. When it became in‐ judge of the EFTA Court in Luxembourg, and its presid‐ creasingly clear that Switzerland would not be‐ ent from 2003 to 2017. From 1987 to 2013, he was a come an EU member state, the EU demanded a full professor at the University of St. Gallen (HSG) and change to dynamic adoption of the law and the between 1993 and 2004, he was a Permanent Visiting Professor at the University of Texas (UT) in Austin. establishment of an institutional framework for the bilateral agreements from 2008 onwards. As The Grand Courtroom of the Court of Justice of the European Union. The CJEU would have played a decisive role in dispute resolution under the failed Switzerland-EU Institutional Framework Agreement. Baudenbacher describes the CJEU as a world court with which he had worked closely as a judge and President of the EFTA Court. In the case of Switzerland, however, the CJEU would have lacked neutrality. (Picture Gerichtshof der Europäischen Union) the Commission was aware of Switzerland’s thin- erally before the ECJ. The Commission would skinnedness in the matter of “foreign judges”, it thus be Switzerland’s de facto surveillance au‐ made a generous offer: Switzerland should nego‐ thority. Of course, the intention behind this plan tiate with the three EEA/EFTA States Iceland, was to set a “point of no return” towards EU Liechtenstein and Norway on the right to “dock” membership. with the institutions of the EFTA pillar, ESA and In order to disparage the idea of docking with the EFTA Court. This would have meant that the the institutions of the EFTA pillar, the leadership bilateral agreements between Switzerland and of the FDFA launched a campaign putting out the EU would have been subject to these two countless allegations, which were meant to con‐ bodies. Switzerland would have been able to vince regardless of their truthfulness. It was bull‐ provide one ESA college member and one judge shit campaign as defined by the American moral in each of the cases concerning it. The EFTA philosopher Harry G. Frankfurt. The two biggest Court would have been a party-neutral court for deceits were: Switzerland. At the same time, the country could 1)If the EFTA Court ruled in favour of Switzer‐ have maintained its sectoral approach; it would, land in an infringement case brought by ESA, unlike Iceland, Liechtenstein and Norway, not the EU would not be bound by the ruling. have had to adopt the entire internal market ac‐ 2)The ECJ would, if required, merely issue “ad‐ quis. The traditional Swiss bilateralism would visory opinions” for the attention of the Joint thus have mutated into a hybrid model with bilat‐ Committee. eral and multilateral elements. Surprisingly, this met with the approval of the foreign policy commissions of parliament, the Bullshit in the moral philosophical sense cantons and the trade associations. Negoti‐ In 2013, the FDFA, led by Foreign Minister Didier ations were conducted on this basis from 2014. Burkhalter, rejected this proposal and relied on a In the spring of 2017, however, it became clear different model. According to this model, no that the non-party-neutral ECJ would not be able special supervisory body should be set up. In the to command a majority in Switzerland. Foreign event of a conflict, however, the Commission Minister Burkhalter resigned, something that should have the right to bring Switzerland unilat‐ only happens once in a blue moon in Switzer‐ 2/4 land. His successor Ignazio Cassis promised to At the end of 2018, the EU declared the nego‐ “reset” the EU dossier. As things stood, this tiation process complete and asked the Federal could only mean “docking” and thus the renunci‐ Council to sign. The latter published the draft ation of the “point of no return” towards EU ac‐ text took refuge in a “consultation” of key stake‐ cession. holders and sent the chief negotiator on a PR Under the influence of his bureaucrats, how‐ tour with the mission to sell the Ukrainian mech‐ ever, the new foreign minister did not find the re‐ anism to the Swiss public. After the conclusion set button. Brussels, of course, was not unaware of the consultation, the Federal Council in‐ that the ECJ model was based on untenable as‐ formed the Commission in June 2019 that it saw sumptions, but when Bern indicated once again a need for clarification on the three points men‐ that it did not want docking, the Commission put tioned. The Federal Council accepted the on the table a monitoring and judicial model it Ukraine mechanism despite considerable criti‐ had developed for the former Soviet republics of cism. Given its questionable role in 2013/2014, Georgia, Moldova, Ukraine and Armenia and this was probably an attempt to save face. which is also foreseen for the former colonies of The Federal Council subsequently did nothing European powers in North Africa. more to defend the model with the sham arbitra‐ The “Ukraine model” provides that in the event tion court. However, the chief negotiator, who of a conflict, the Commission was to be entitled had praised the mechanism all over the country, to appeal to a an “arbitration panel”, which, how‐ was dismissed and his successor was instruc‐ ever, would have had to ask the ECJ for a binding ted to conduct renegotiations on the three side ruling whenever EU law or treaty law with the issues. The fact that Boris Johnson’s Govern‐ same content was at stake. That means basic‐ ment was able to avoid the Ukraine model in the ally in every case. Christmas Eve 2020 Trade and Cooperation The Federal Council accepted this in March Agreement, despite pressure from the Commis‐ 2018 and presented it as a great breakthrough. sion, caused some irritation even among sup‐ In July 2018, the UK Government under Theresa porters of the Framework Agreement. May also swallowed the Ukraine model. From At a meeting between the President of the then on, the FDFA claimed that the “arbitration Swiss Confederation, Guy Parmelin, and the panel” under the EU-Switzerland agreement President of the Commission, Ursula von der would have considerable powers of its own be‐ Leyen, on 23 April 2021, it was found that a solu‐ cause Bern had negotiated more successfully tion was not even possible with regard to the than London.
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