Switzerland, not unlike the United Kingdom, always had a somewhat awkward, if not difficult, relationship with Europe, especially with the European Union. On the one hand, Switzerland is geographically situated at the centre of the continent and therefore highly dependent on being on good terms with its surrounding neighbours, all of them being EU member states, with the exception of Liechtenstein. On the other hand, Switzerland always saw itself as being special: neutrality, (semi-)direct democracy and strong federalism are seen as being in the DNA of the country and, thus, largely incompatible with EU membership.

In this chapter I will first describe how the current situation with the so-called “Bilateral Agreements” came about and what exactly they are. I will then look at how the Bilateral Agreements work and at their advantages and disadvantages. I will then consider how such an approach would work with the UK and what kind of precedent might be set by it.

HOW THEY CAME ABOUT

After the Second World War, Switzerland, like other European countries, went on its quest for an ideal form of cooperation. The above political sensitivities were seen as obstacles to joining any international organization which was seen as being “political”. Thus, it took three referenda for Switzerland to join the United Nations, and accession to the EU was always seen as being very difficult and, indeed, has stood no chance of being accepted in a referendum to this very day. For Switzerland, therefore, foreign policy was always foreign trade policy. When some Western European states in 1960 joined around the UK to set up the European Free Trade Association (EFTA) as an alternative to the European Economic Community (EEC), Switzerland was among them.

Since then, Switzerland has cautiously tried to deepen its relations with the (now) EU. Next to concluding the odd agreement to facilitate trade in special fields, such as watches or insurance, in the early 1990s it embarked, together with the other EFTA states at that time, on a venture which would link these states to the EU's internal market. In 1992 the European Economic Area (EEA) Agreement was signed and should have entered into force on 1 January 1993.