The 1972 Free Trade Agreement (FTA) forms the basis for the free trade in industrial products between Switzerland and the EU. Industrial goods originating in the territory of either party are exempt from customs duties under Protocol No. 3 to the FTA. Protocol No. 2 sets out the rules on processed agricultural products. The FTA is the cornerstone of economic relations with the EU, which is Switzerland’s main trading partner.
Since the Agreement on mutual recognition in relation to conformity assessment (MRA) entered into force in 2002, technical barriers to trade have been removed in a large number of industrial sectors. Mutual recognition is based on equivalent technical requirements. By eliminating the need for two conformity assessments, the agreement removes an important barrier to trade. As well as cutting costs (in the product sectors covered by the agreement), companies save time when launching new products at the European level. However, the MRA needs to be updated regularly to take account of the latest legal developments affecting the two states parties. The EU is not prepared to update the MRA at present due to the lack of an institutional framework. As the chapter on medical devices has not been updated, mutual recognition of the relevant requirements is no longer guaranteed in this sector.
The 1999 Agreement on certain aspects of government procurement concluded as part of Swiss-EU bilateral relations broadens the scope of the 1994 WTO Agreement on Government Procurement (GPA). The 1999 agreement states that, within the framework of relations between Switzerland and the EU, the WTO rules shall also apply to purchases made by the regional and communal authorities, public and private railway operators, public and private enterprises involved in supplying gas or heat, and private companies that provide a public service on the basis of exclusive rights and which are active in the sectors of drinking water, electricity, urban transport, airports and maritime or inland ports. This agreement gives Swiss suppliers access to a market worth billions.
Free movement of personsThe 1999 Agreement on the Free Movement of Persons (AFMP) and its protocols make it easier for Swiss and EU nationals to live and work in each other's territories. In addition to the free movement of labour, the agreement provides for the mutual recognition of professional qualifications and the coordination of social security systems. The same rules also apply between Switzerland and the member states of the European Free Trade Association (EFTA). The AFMP makes it easier for Swiss companies to recruit workers from the EU/EFTA zone, and thus plays a significant role in maintaining Switzerland’s competitiveness as a business location and in boosting economic and job growth.
Accompanying measures
The introduction of the free movement of persons was accompanied by the implementation of measures designed to protect workers from the undercutting of wages and employment conditions that are customary in Switzerland.
The 1999 Agreement on trade in agricultural products facilitates trade between Switzerland and the EU in this sector. It permits preferential tariff arrangements for a certain number of basic agricultural products and reduces, and in some cases eliminates, non-tariff barriers in the veterinary field and in a number of other areas. In addition, an agreement on the mutual recognition of protected designations of origin (PDOs) and protected geographical indications (PGIs) for agricultural products and foodstuffs has been in place since 2011. The EU is also Switzerland’s main trading partner for agricultural products. The agreement has created new opportunities for Switzerland to export its agricultural products: exports, especially of cheese, have seen continuous growth since it entered into force. The veterinary annex (Annex 11 to the agreement on trade in agricultural products) creates a common veterinary area in which the same conditions apply to trade between the two parties. In other words, it abolishes border checks on the trade in live animals and animal products, and regulates the measures taken to control epizootic diseases.
Discussions were conducted with the EU on strengthening the agri-food value chain, and stepping up cooperation in the areas of food and product safety and public health. Negotiations on an agricultural free trade agreement have been suspended. There are no ongoing negotiations on product safety. Negotiations are continuing in the areas of food safety (project to extend the agricultural agreement to the entire food chain) and public health.
Switzerland and the EU have been conducting negotiations on access to the European electricity market since 2007. The aim is to arrive at an agreement that would create a more diverse energy supply, thereby reducing the risk of power outages and the associated economic damage.Given that, since 2012, the EU made the signing of new market access agreements dependent on the resolution of institutional issues, no agreement on electricity has yet been reached. In the meantime, to cushion the potential negative impact on network security and security of supply, the national grid operator Swissgrid is currently negotiating private-law technical agreements with transmission system operators in the EU. Even if these talks lead to a successful outcome, such agreements can be no substitute for an agreement on electricity, which remains one of the Federal Council’s objectives.
Last modification 18.07.2023
