The resurrection of the deceased Swiss-EU governance framework

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BrusselsReport.eu
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By Prof. Dr Dr h.c. Carl Baudenbacher, former President of the EFTA Court (2003-2017) and Partner at Baudenbacher/Kvernberg, Zurich/Oslo/Stavanger/Brussels 

It is not only the monotheistic world religions that believe in resurrection. The Swiss government (Federal Council) also hopes for it, albeit not in relation to its soul, but in relation to the “Framework Agreement” with the EU. On 26 May 2021, this proposed Swiss-EU governance framework seemed to have died. According to its supporters, it had been killed by the Federal Council. However, it turned out after a relatively short time that the promise made by Foreign Minister Ignazio Cassis at the 34th Albisgüetli Conference on 21 January 2022 that there would be no InstA 2.0 was worth about as much as his promise made in autumn 2017 to “press the reset button” in European policy.

The “miracle”

In fact, the key institutional elements – dynamic updating of the law, surveillance and dispute resolution – in the “Common Understanding” of both parties and the draft negotiating mandate of 15 December 2023 are practically identical to those in the InstA draft from the end of 2018. In the event of a dispute, either party – the EU and Switzerland – should be able to appeal to an “arbitration tribunal”, which must always request a binding interpretation from the ECJ if EU law or treaty law with the same content as EU law is at issue. This means that the EU, acting through the European Commission, can bring its own court into play. This unilateral solution will no longer be negotiated.

The technical innovation that this regulation will no longer extend horizontally across all bilateral agreements covered, but will instead be anchored vertically in the individual agreements, is not in itself an improvement. And it is highly questionable whether the hope of achieving an exemption from the ECJ’s monopoly on interpretation in individual substantive areas, such as wage protection or the Citizens’ Rights Directive, will be realised. The scope of such exemptions would in any case be determined by the ECJ. However, it is not only free movement of persons that is at stake, but also, for example, land transport, energy policy, the liberalisation of electricity policy and rail transport and, in the future, perhaps also an agreement on services (including financial services).

The pro forma “court of arbitration” as a cover

Swiss supporters of the framework agreement from the FDFA, the Conference of the Cantons, the export industry and the universities claim that the “arbitration tribunal” has twofold discretion and that the Swiss negotiators have succeeded in achieving improvements in the “exploratory talks” that started in the spring of 2022. On the one hand, Christa Tobler was quoted in the Tagesanzeiger newspaper on 17 December 2023 as follows:

“With regard to jurisdiction, which is also controversial, Switzerland has achieved certain clarifications compared to the negotiations on the framework agreement that failed three years ago, according to Tobler […]. What is new […] is that ‘the arbitral tribunal only has to refer to the European Court of Justice for declarations on EU law concepts’ if this is ‘relevant and necessary’ for the dispute.”

This is wrong. These two terms were already included in the 2018 InstA draft, and they do not change the fact that the Bogus Arbitration Tribunal must always refer to the CJEU when it comes to the interpretation of EU law or treaty law with the same content as EU law.

On the other hand, the Secretary General of the Conference of the Cantons (“KdK”) has stated that Switzerland has achieved improvements to the “arbitration tribunal” in the “exploratory talks”. Nobody could force the “arbitration tribunal” to appeal to the ECJ. This statement misses the point. The “arbitration tribunal” is legally obliged to refer to the ECJ if EU law is “implied”. The fact that the KdK is banking on the “arbitration tribunal” violating its legal obligations in Switzerland’s favour is as embarrassing as it is unrealistic. The same applies to the ongoing insinuations from the FDFA that the “arbitration tribunal” would have certain freedoms when implementing the ECJ ruling, which it would abuse in Switzerland’s favour.

The Commission and the ECJ would not be neutral

The Commission and the CJEU are EU institutions that must serve the interests of the EU in accordance with Art. 13(1) TEU. Nowhere else in international law is there a situation between equal partners in which one is de facto subject to the supervision and jurisdiction of the other’s institutions. The fact that the ECJ generally treats Swiss parties decently in preliminary ruling proceedings, regardless of whether they are based on civil, administrative or criminal law, is irrelevant. This is courant normal in rule-based legal orders. The Swiss Federal Supreme Court is also a fair court. Under the Framework Agreement, however, the ECJ would deal with disputes under international law between the EU and Switzerland.

Elimination of the Swiss Federal Supreme Court

The Swiss government (Federal Council) fails to mention in its documents that the Swiss Federal Supreme Court would be completely excluded from the dispute settlement procedure. No court of last resort in the EU or the European Economic Area is treated so badly.

The model with the “arbitration tribunal” and the ECJ was created by the EU for the former Soviet republics of Ukraine, Moldova, Georgia and Armenia. The first three are officially candidate countries. Armenia is an appendage of Russia. All of these states are newly industrialising countries that are on the EU’s financial drip. Switzerland, on the other hand, would still have to make cohesion payments. In Norway and Iceland, the model with the “arbitration tribunal” and the ECJ would be unconstitutional.

A majority of Swiss cantons is required

It has recently been said that it is disputed whether a majority of the Swiss cantons would be required for a vote on the framework agreement. However, the legal situation is completely clear. According to Article 141 (1) (a) of the Swiss Federal Constitution, it depends on whether a treaty amounts to accession to a supranational organisation that is associated with a transfer of sovereignty. There are two precedents that are decisive. (1) A majority of the cantons was required for the 1972 free trade agreement, even though no institutions were created in the process. (2) The same happened with the EEA Agreement, in which Switzerland would have been subject to the joint institutions of the EFTA states, the EFTA Surveillance Authority (“ESA”) and the EFTA Court. The ESA and the EFTA Court would therefore have been independent EFTA institutions. Switzerland would have been represented by one member in each of the two institutions.

The Framework Agreement provides for de facto supervision by the European Commission and a monopoly on interpretation by the ECJ, without Switzerland being able to appoint a member to either institution. The transfer of sovereignty would be by far the greatest with the Framework Agreement. In addition, the matter would be practically irreversible. Consequently, consent by the majority of the cantons is required a fortiori.

The “bullshit” must end

The framework agreement project was based on “bullshit” from the outset. “Bullshit” is talk that seeks to persuade regardless of the truth (Harry G. Frankfurt). In 2013, Federal Councillor Burkhalter and his State Secretary Rossier have made countless “bullshit” claims. The worst were probably that the ECJ would only issue “advisory opinions” and that judgments of the EFTA Court were not binding for the EU. Since the switch to the model with the Bogus “arbitration tribunal”, unfounded claims about the latter’s allegedly strong position have dominated. This government policy is not acceptable. There needs to be an honest discussion.

A version of this article was originally published by Insiderparadeplatz.ch.

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