Technicians assemble units

© AdobeStock/Industrieblick

Switzerland: Hard times for relations with close partner

The termination by Switzerland of talks on an institutional framework agreement with the EU in 2021 had immediate consequences for companies on both sides. Already today, companies require product authorisations from both sides for certain goods. The problems are set to become more difficult in the next few years. German industry is involved in searching for solutions.

Germany and Switzerland are close partners with bilateral trade alone amounting to around 109 billion euros. That makes Switzerland Germany’s eight most important foreign trade partner. Many high-tech clusters, from the pharmaceutical industry for example, are located close to the border and produce substantial value added on both sides of the border. One of the foundations of these successful clusters are the bilateral agreements between the European Union and Switzerland as a non-EU country.

Creating a level playing field

However, in the case of bilateral agreements there is no arbitration in case of differences of opinion. This is very important for the EU for the purposes of a level playing field. There is no legal recourse in the event that one of the parties fails to fulfil its obligations.

Furthermore, restrictions apply in the provision of services. The posting of workers requires advance notification, payment of a security, and proof of remuneration equivalent to normal levels in Switzerland.

Both of these points are heavily disputed by the two parties. The termination of talks has not resolved these problems. To the contrary, the EU and Switzerland are responding to differences of opinion with one-sided measures. This is a source of uncertainty for the business community. The BDI is therefore advocating dialogue and fair solutions to benefit business and society on both sides.

Strengthening Europe’s global position

Europe is facing enormous challenges. The combination of systemic competition with China, strategic dependencies to autocratic regimes, in particular, and swift technological progress amounts to challenges of a dimension the continent has never seen before.

An efficient economic order is needed to deal with these challenges. This includes, for example, the mutual recognition of product certifications such as the German technical inspection system TÜV. From now on, these authorisations will no longer be recognised for medical products. Further areas of industry are likely to be affected shortly with the reform of the EU Regulation on Machinery Products.

This affects Switzerland to the same extent as the EU. In many cases, Switzerland supplies the intermediate products to German production companies who then export the final products. Without mutual recognition, the bringing to market of these end products will be that much more difficult.

The Covid pandemic caused global disruptions to numerous supply chains. The BDI is working to prevent new risks from emerging in trade with Switzerland. Both Swiss and European companies need to maintain their delivery reliability to hold on to their global market positions.

Focus on green and digital objectives

We also need Switzerland as a close partner for the implementation of the Green Deal and the ambitious digitalisation agenda of the European Commission. Developed concepts for a deeper electricity partnership could enable a more efficient use of existing energy structures such as storage capacities.

Collaboration in high-tech is also decisive. Cross-border collaboration in science and research, including space technology, can help secure a leading position for Europe going forward. The increasing problems in our bilateral relations thus need to be addressed and resolved swiftly.