Note: Based on data collected by the author using publicly accessible official documents of the Federal Administration (Systematic Collection of Federal Law and Official Collection of Federal Law); data collection procedures and reliability described in detail in Jenni (2016).

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The function of EU legislation in sectoral agreements

EU legislation plays an important role especially in those agreements that aim to provide mutual market access, i.e. access for Swiss companies to the EU’s single market, and access for companies from the EU to the Swiss market. To fulfil these functions the agreements need to create a level playing field, in terms of competition, for economic actors from both markets. A level playing field means that the rules governing both markets are similar enough so that economic actors do not need to incur (too much) additional effort or expense to become active in the other market.

 

In the EU’s single market, the level playing field is created by harmonised regulations or, in areas where regulations are not harmonised, by the mutual recognition of national standards. In the EEA, the level playing field is pursued by a principle called the homogeneity of legislation. Since 2010, the Council of the European Union has also used the concept of homogeneity to describe the legal requirements for Switzerland’s access to the EU’s single market. In contrast, Swiss legal scholars and official documents mostly use the notion of ‘equivalence of legislation’ in order to describe the relationship between EU and Swiss law based on the sectoral agreements. Hence, Switzerland and the EU agree to consider their respective legislation in a specific issue area as ‘equivalent’. In some agreements, the ‘equivalent’ legal acts are explicitly listed in the agreements’ annexes. Legally, neither Switzerland nor the EU loses its autonomy to change these legal acts.

 

Equivalent and even identical rules play a role beyond market access. They are the basis for the principle of non-discrimination, which is central to the Free Movement of Persons agreement (FMPA). They lie at the heart of cooperation agreements in issue areas as diverse as statistics, the environment agency, border control (Schengen) and the taxation of savings. By contrast, equivalent rules are less important in areas like research.

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Changes to EU legislation and revisions of Swiss-EU agreements

The equivalence of legislation is impaired if one party to the agreement changes its rules. In such cases, Switzerland and the EU have to re-assess whether the agreement can continue to carry out its allotted function in light of the change to the legislation by one party. The other party may be forced to modify its own rules and the agreement then has to be updated in order to re-establish the equivalence.

 

The recent history of Swiss-EU relations provides two examples of this necessity: one where an agreement was smoothly revised and one where Switzerland and the EU were unable to reach agreement on the modification. .

 

The example of a smooth revision is the total revision of the agreement on customs security measures in 2009. The agreement threatened to lose its effectiveness when the EU adopted a so-called prior notification requirement for goods entering the EU from third states. Technical barriers to trade - abolished 20 years before- would have been reinstalled. Switzerland quickly adapted its own security requirements to EU standards and accepted a totally revised agreement with a legally binding commitment to dynamically incorporate new EU legislation in this area. Apparently, the functioning of the agreement depended on the continued equivalence of the rules and the benefit was important enough for Switzerland to quickly agree on a revision based on the EU rules.

 

The example of a failed re-negotiation concerns the Free Movement of Persons Agreement (FMPA). The popular initiative "against mass immigration", which was approved at the Swiss polls in 2014, required the Swiss government to re-negotiate the terms of the Free Movement of Persons Agreement (FMPA), in order to reconcile it with the initiative’s demand to limit immigration. The EU did not enter into negotiations and the agreement was not revised.

 

Moreover, to emphasize its disapproval of the Swiss vote on the initiative against mass immigration, the EU refused to ratify the already agreed total revision of the agreements on Switzerland’s participation in EU programs in the areas of education, research (Horizon2020), and audio-visual cooperation (MEDIA).  Swiss participation in these EU programmes has to be re-negotiated at every renewal of the EU’s respective multi-annual programs.

 

In a nutshell, updating a sectoral agreement can be difficult and time-consuming, if it requires new negotiations between Switzerland and the EU. Negotiations open the door  to new linkages of different issues and re-assessments of the terms of an agreement. Negotiations can also fail altogether – either because one party does not wish to negotiate or refuses to ratify the final agreement (see EFTA-Studies analysis The Logic of Negotiations between Switzerland and the EU). Empirical research shows that in fact only slightly more than half of all the sectoral agreements that were in force in the research period 1990–2010 were revised at all during this time (see Table 1).

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The role of Mixed Committees

The authors of the sectoral agreements were well aware that revisions would be necessary in order to maintain the function of many of the agreements. Many sectoral agreements set up so-called Mixed Committees, which facilitate agreement revisions. A few recent agreements, namely the Schengen and Dublin association agreements and the agreement on Customs security measures oblige Switzerland to continuously incorporate EU legislation in the area of the agreements.

 

The Mixed Committees are bodies staffed by representatives of the European Commission and the Swiss federal administration respectively and they decide by consensus. In addition to their main role i.e.  the exchange of information, they are the first port of call for Swiss and EU diplomats to discuss issues that are controversial. Today, a total of 24 Mixed Committees exist for the management of 23 different agreements (see Table 1; see also complete list of Mixed Committees).

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Most importantly in terms of the revision of agreements, many Mixed Committees can amend the annexes to the agreements in their own right. In the annexes, the legal acts of EU secondary law applicable to Switzerland are listed. Out of the 23 existing Committees, 11 Committees have revised the respective agreement annexes. In total, these 11 were responsible for 85 out of 161 agreement revisions between 1990 and 2010 (see Table 2).

 

The Mixed Committees responsible for most agreement revisions are those of the Free Trade Agreement (FTA) and of three agreements of the Bilaterals I (Agricultural products, Civil aviation, and Mutual recognition of conformity assessments). Graph 1 shows the frequency of reforms per sectoral agreements (vertical axis) as well as the number of these reforms that refer to EU law (horizontal axis, graph on the left) and the number of reforms that were decided in a Mixed Committee (horizontal axis, graph on the right).

 

The graph shows that the FTA and related protocols were revised rather often by the respective Mixed Committee, but not always with reference to EU law. In contrast, revisions of the Bilaterals I agreements more frequently referred to EU law. It is important to note, however, that Mixed Committees decide by consensus and are thus anything but a mechanism for ‘automatic’ agreement updates.

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Graph 1: Number of revisions per sectoral agreement from 1990 to 2010