In December 2024, Switzerland and the European Union concluded negotiations on the content of the prospective "Bilateral Agreements III." European law expert Christa Tobler analyses the implications of this new package of agreements, including wage protection, safeguard clauses, and Switzerland’s role in shaping EU legislation.
After the collapse of the framework agreement in 2021, relations between Switzerland and the European Union (EU) reached a standstill. Negotiations were relaunched in March 2024 to prevent the erosion of agreements signed decades ago and to reinforce the strategic partnership between the Confederation and its main trading partner. This process concluded in December. With nearly 140 bilateral agreements awaiting ratification, the "package approach" is set to define future relations across key areas such as electricity, free movement of people, public health, and food safety. While the full details will be unveiled over the course of 2025, several elements are already known. Professor Christa Tobler, a specialist in Switzerland-EU legal relations, offers her analysis.
To what extent do the Bilateral Agreements III better serve Switzerland’s interests than the framework agreement abandoned in 2021?
Christa Tobler: The new package covers a broader range of areas and allows for more adaptations to Switzerland’s specific circumstances. These exceptions are not derived from European law but were negotiated specifically to account for the Swiss context, for example, in wage protection and migration policy.
What solutions do the Bilateral Agreements III offer in response to concerns about wage dumping?
Tobler: Bilateral Agreements III retain the Swiss labor market control system introduced with the Agreement on the Free Movement of Persons (AFMP) in 2002, which involves tripartite oversight by cantonal authorities, trade unions, and employers. Some adjustments are foreseen: for example, the notification period for posted workers would be shortened from eight calendar days to four working days. It’s worth noting, however, that such notification deadlines do not exist in other states party to the agreement, making this a uniquely Swiss measure. With today’s digital communication tools, this reduction still appears compatible with effective worker protection. As for reimbursement of professional expenses, Switzerland wishes to see these aligned with local living costs. So far, Brussels does not appear to object. Several EU member states, including Germany, have already introduced similar exemptions in this area.
The AFMP includes a safeguard clause allowing for temporary limits on immigration in the event of "serious economic or social difficulties." How is this mechanism addressed in Bilateral Agreements III?
Tobler: Under the current agreement, safeguard measures can only be enacted if both parties agree that the conditions are met, effectively giving the EU the power to block the procedure unilaterally. In the Bilateral Agreements III, that will no longer be the case. If either party requests activation of the clause, the two sides must first consult within the joint committee. If no agreement is reached, the matter is referred to an arbitral tribunal for a binding decision. That said, the safeguard clause is intended for exceptional cases only. In fact, 23 years after the free movement agreement entered into force in Switzerland, the current clause has never been used in practice.
In the areas of electricity and food safety, what changes can SMEs expect?
Tobler: The electricity agreement will liberalize the market, allowing many SMEs to choose the supplier that best meets their needs. It will also strengthen the security of supply. Meanwhile, the food safety agreement will integrate Switzerland into a shared food safety area. Swiss producers and businesses will benefit from clearer, harmonized standards, particularly in areas such as food safety, plant health, and phytosanitary products. This will help ensure smoother trade between the two markets.
Will Switzerland be required to automatically adopt EU law?
Tobler: No. The Bilateral Agreements III provide for what is known as a "dynamic" adoption of EU law. This applies only to legal texts that govern Switzerland’s participation in the European internal market. Currently, such a mechanism exists in two non-economic agreements: the Dublin Agreement, which defines procedural responsibilities in asylum matters, and the Schengen Agreement, which concern cooperation on border controls. Under the Bilateral Agreements III, a few additional areas would be included – namely, the free movement of persons, air and land transport, and the removal of technical trade barriers. However, there is no automatic adoption.
When a rule changes within the EU, the relevant joint committee must examine how the change could be incorporated into the agreement. Switzerland may choose not to accept the amendment, but doing so could lead to possible retaliatory measures. Nevertheless, Switzerland can take part in the preparatory work on European legislation, known as "decision shaping". This enables it to influence the content of texts at an early stage, even if it cannot take part in the final vote. Thanks to its participation in the decision-making process, Switzerland has already obtained derogations, notably on the carrying of weapons in the Schengen Agreement, asserting the right of those liable for military service to keep their weapons at home.
If the Bilateral Agreements III are abandoned or rejected, how might Switzerland approach its relationship with the EU?
Tobler: Bilateral Agreements I and II would remain in effect, but they would gradually lose their relevance. The EU would continue to evolve its legal framework, with no guarantee that this evolution would be reflected in bilateral agreements, creating increasing asymmetry between bilateral law and European law. Over time, this would hinder Swiss companies’ access to the European internal market. If both parties once again fail to reach an agreement, I assume that it is unlikely that Brussels would agree to a third round of negotiations.
