Landlocked Brexit: Switzerland-EU talks collapse as Bern walks away from €227bn trade deal
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The Swiss government has informed the European Commission it is ending efforts to reach an agreement on a long-anticipated political treaty that would cover trade between the two countries.
Switzerland refused to agree to the EU demand that the treaty would include freedom of movement stipulations.
“We regret this decision, given the progress that has been made over the last years,” the European Commission said in a statement.
The goods-trading relationship at risk is worth €227bn, with medical-technology companies among the most important exporters into the EU.
Switzerland will be downgraded to ‘third country’ status, meaning they will need to have a representative within the bloc, meet the EU’s product-labeling specifications and deal with other red tape.
As a result of the Swiss government’s decision, the country’s medical-technology giants, among many others, will no longer be allowed to export duty-free to the European Union.
The country’s med-tech sector employs over 60,000 people, accounting for around 3 per cent of Switzerland’s GDP.
Loose deals
For years the two sides managed their trade through a range of loose individual deals but Bern and Brussels have never been unable to come to a new umbrella political treaty, as was the initial aim of the ongoing talks.
Switzerland exports more to the EU than to China, the UK and the U.S. combined, according to figures from the Swiss Federal Customs Administration.
Today’s decision will also hurt its electricity market, industrial companies and its lucrative banking sector.
Despite moves by the government to guarantee continued EU supplies to Switzerland, industry groups like Swiss Medtech estimates product-development costs could rise by 30 per cent as a result of the new relationship, according to estimates reported in Swiss media this week.