Switzerland

EU trade relations with Switzerland. Facts, figures and latest developments.

• Switzerland

• Negotiations and agreements
• Trade policy

Switzerland's economic and trade relations with the EU are mainly governed through a free trade agreement and through a series of bilateral agreements, where Switzerland has agreed to take over certain aspects of EU legislation in exchange for accessing part of the EU's single market.

Trade picture

• The EU is Switzerland's main trading partner, whereas Switzerland is the EU's fourth-biggest trading partner after the United States, China, and the UK. In 2023, our bilateral trade in goods reached €327 billion, accounting for 6.4% of the EU’s total trade in goods.
• Swiss merchandise exports to the EU are concentrated in a few sectors, particularly chemicals/pharma and medical products (€65.3 billion, 45.4%), machinery and appliances (€18.4 billion, 13.2%), optical and photographic instruments (€14.5 billion, 10.4%), and pearls and precious metals (€12.2 billion, 8.8%).
• Switzerland is a very important partner of the EU for trade in services, in particular for commercial services. In 2021, total bilateral trade in services reached €226.4 billion, accounting for nearly 9% of the EU’s total trade in services.

Both the EU and Switzerland are among each other's top destinations for foreign investment.

The EU and Switzerland

Relations between the EU and Switzerland are governed by a series of bilateral agreements. The cornerstone of EU-Swiss trade relations is the Free Trade Agreement of 1972.

As a consequence of the rejection by Switzerland of membership of the European Economic Area (EEA) in 1992, Switzerland and the EU agreed on a package of seven sectoral agreements signed in 1999 (known in Switzerland as 'Bilaterals I'). Some of these are relevant from a trade perspective:

• The Free Movement of Persons Agreement allows for the provision of services, limited in time.
• The Mutual Recognition Agreement in relation to conformity assessment ensures that, in twenty regulated sectors, the conformity assessment provided by one party is recognised by the other, which facilitates trade between the parties.
• The Public Procurement Agreement builds on the WTO Government Procurement Agreement.
• The Agreement on trade in agricultural products includes sanitary and phytosanitary rules, as well as tariffs and tariff rate quotas for agricultural products, except for cheese that is fully liberalised.
• A Protocol on processed agricultural products(Protocol 2), which was added to the Free Trade Agreement in 2005. It includes a mechanism whereby in practice Switzerland receives compensation for the very significant price differential of basic agricultural products – which serve as inputs to processed agricultural products – between the EU and Switzerland.

A further set of sectoral agreements was signed in 2004 (known as 'Bilaterals II'), covering, inter alia, Switzerland's participation in the Schengen area and Dublin asylum system, and agreements on taxation of savings, processed agricultural products, statistics, combating fraud, participation in the EU Media Programme and the European Environment Agency.

In their first decade of existence, the EU became aware of various structural problems with the bilateral agreements. In 2014, the EU and Switzerland therefore set out to negotiate an Institutional Framework Agreement (IFA) intended to provide solutions for all existing and future internal market access agreements. The IFA aimed to restructure EU-Swiss trade relations, notably by providing crucial rules and procedures for the dynamic takeover and homogenous application of internal market law, for enforcement of state aid rules, and dispute settlement.

Following the breakdown of the negotiations on the Institutional Framework Agreement in May 2021, the EU’s aim has been to find a systemic solution to the structural governance issues based on the principle of non-discrimination between citizens and a level playing field between companies.

In November 2023, after 18 months of exploratory talks, the Commission and the Swiss authorities reached a Common Understanding on a broad package of measures to address the structural issues across the various agreements covered by the IFA, as well as any other internal market-related agreements that the EU and Switzerland may negotiate in future. Based on this package, both the Swiss Federal Council and the Council of the European Union adopted negotiating directives in March 2024; the formal negotiation process on this new package was launched on 18 March 2024.

The shared ambition of the EU and Switzerland is to finalise the negotiations in 2024, after which the various agreements would need to be signed and concluded. If agreed, the package will likely be subject to a popular vote in Switzerland in 2026 at the earliest.

Committees and Dialogues

The EU and Switzerland meet regularly to discuss issues and best practices and oversee the proper functioning of the Agreement.

Trading with Switzerland

• Importing into the EU from Switzerland
  • EU trade defence measures on imports from Switzerland
  • Trade defence measures in force in Switzerland