It is a truism of Britain’s Brexit balls-up that we have placed ourselves firmly between a rock and a hard place. Ridiculous red lines set by successive Tory PMs and carried on by Keir Starmer mean we cannot do the sensible thing and rejoin the single market.
Neither will the European Union let non-members simply select the rules of access – as Michel Barnier said all those years ago, “the single market and its four freedoms are indivisible – cherry-picking is not an option.” You are definitely either in or out.
Except if you are Switzerland.
For one reason or another, the Swiss do have a cherry-picked deal with Brussels. Could this be a model for the UK?
Up until now, the answer has been a resounding “non” – the EU repeatedly making it clear that the Swiss deal has been such a pain in the arse to set up and maintain that it has no intention of repeating it. Yet there is hope.
The European Commission and the Swiss government recently renegotiated that agreement – something to which the Centre for European Reform think tank says “The British government should pay close attention.” In essence, this new deal sets out the conditions for granting privileged access to the single market for third-party countries like the UK.
Before we look at what that might mean, how did the Swiss get to this point? Having rejected membership of the EU-aligned European Economic Area (members Norway, Iceland and Liechtenstein) in 1992, Switzerland had to negotiate over 100 separate deals with the EU to try to achieve much the same result. They also embrace “autonomous adaptation”, meaning they just pass EU rules and regulations into Swiss law (the UK now does something similar with Labour’s Product Regulation and Metrology Act).
As a result, the Swiss economy is integrated into the single market in goods, but without joining either the EU or EEA. Switzerland and the EU have a “common food safety area”, abolishing the need for checks at the border. The Swiss now have joined the EU’s internal electricity market, plus Erasmus+ and Horizon too.
All of that looks very much like the kind of deal that the UK would be able to accept; in fact it looks very much like the kind of deal we should be killing for. The European Court of Justice has a minimal role in settling disputes, and though the Swiss do not get to help make EU rules, they get to make their points while sitting in on pre-legislative EU meetings.
It is about as close to membership of the single market and lots of other very useful schemes as you are going to get but without rejoining the EU or joining the EEA. The renegotiation has been welcomed so warmly by Swiss business leaders, with Samad Sarferaz from the KOF Economic Institute saying: “Market access is crucial: European trade is a cornerstone of the Swiss economy. The benefits will not be seen immediately but will be there in the long run.”
The UK also has an advantage that the Swiss don’t. Rather than hundreds of US trade deals, it has just one treaty to renegotiate. It’s also the case that the EU has shown the UK some flexibility already, over the Windsor Framework.
So what’s stopping us from following the Swiss path? It is the intransigence of the Labour government in the face of worries about Reform and the Red Wall.
Any deal would mean paying into the EU’s coffers, a red rag to Brexiteers and the right wing press (Switzerland will pay around £310 million a year; we would probably have to pay more). Another, even bigger red rag is that the Swiss have had to accept freedom of movement.
In fact, they have negotiated a very similar deal on FoM to the one that David Cameron negotiated before the Brexit referendum. But when Labour are dragging their feet over a no-brainer scheme to let young people move around Europe for work and education without ridiculous restrictions, this looks fatal.
Even so, the Swiss deal does clear the ground for a veterinary deal and an electricity market deal and perhaps all but de jure membership of the SM in goods at least. More than that it sets a precedent and shows the EU is more open to cherry picking than previously thought.
The UK is desperate for more growth and removing barriers to its trade with its largest market would certainly help.
And as the CER points out, with Europe desperately trying to ramp up defence spending while Trump is running amok, “keeping London closer to Brussels than to Washington makes a strategic sense.” Both the EU and UK now have good reason to co-operate more and be less rigid.
The new Swiss deal is not perfect – like Swiss cheese it has many holes in it. But it shows that the mood music is changing, that there is room for negotiation and compromise, that the EU wants closer relations with its important economic neighbours and is willing to bend slightly to get those relationships.
As the Swiss president Viola Amherd said when the deal was announced in December: “This is in the interests of Switzerland’s and the EU’s population, our economies, employees, consumers, students and researchers.”
A similar deal would do the same and more for the UK and the EU. We now have a chance to push at an opening door. Surely we can’t afford to miss out?
