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The Swiss Hokey Cokey: ‘you put your left arm in, your right arm out’

Updated: Mar 3, 2020

Isolation vs. Integration

Every Saturday morning, a ritual occurs on the Swiss border. Hordes of Swiss residents rush across the frontier, primed with their shopping bags, to take advantage of the variety and lower price of food in France, Germany and Italy. The difference in price (mean can be three times more expensive in Switzerland) is in itself enough for many to justify the extra time spent dodging the customs officers who attempt to guard Switzerland’s highly porous borders.

This is the reality of being a small European state at the centre of the continent, but outside the political confederation of the EU. On the whole, Switzerland has managed its neutral position incredibly well, and has been to some extent a role model in Britain’s strenuous attempts to leave the EU. It is one of the wealthiest countries in the world, and the quality of life (though maybe a bit overstated) is excellent. They maintain one of the most representative democracies in the world, with most decisions being confirmed by referendum (though recent global events may have cast doubt on some of the merits of direct democracy).

This has not been achieved from being completely isolationist from Brussels. Though neither in the European single market nor the customs union, the majority of Switzerland’s trade is with the EU, and is actually the third largest partner in terms of trade to the EU after the behemoths of the US and China. Rather than being part of a single agreement, Switzerland instead has hundreds of trade agreements with the EU which have been negotiated over 25 years that heavily replicates the single market.

A Difficult Relationship

The reason behind this complicated tangle of negotiations was that in 1992, Swiss voters narrowly rejected (50.3%) joining the single market. Like Britain’s present struggle, the vote highlighted divisions in Switzerland, with French speaking regions being favourable to joining, and the (often more conservative) German speaking areas being against. Two further attempts in 1997 and 2001 for European membership were overwhelmingly defeated with three quarters of Swiss citizens against. However, in 2005, a majority agreed to allow Switzerland to join the Schengen area, making it more integrated with the EU than the UK in respects to freedom of movement. This was again called into question in 2014 when again, 50.3% of voters wanted to renegotiate freedom of movement with the EU.

Switzerland’s relationship with the EU appears to be schizophrenic but has parallels with the UK. Like with Brexit, the dividing line between integrationists versus isolationists is virtually 50/50. Despite there being an overwhelming rejection of actually joining the EU, many Swiss citizens want to maintain open trade relations with their neighbours. Like the UK, European membership is seen as an infringement on Switzerland’s neutral national identity.

Inspiration for the UK?

These similarities toward Europe, but a desire to maintain an open economy also explains how Switzerland is one of the first countries with which Britain is negotiating a future trade deal, and with Theresa May’s deal having been annihilated in Parliament a Swiss model for the UK is a possible future compromise. Yet Switzerland is not Britain. With a population eight times larger than Switzerland’s and being a major world economy, Britain commanded an important position in terms of votes and influence within Europe that are now being squandered. Moreover, Switzerland is still incredibly protectionist in certain areas, leading to very high price of food which most Brits would have trouble swallowing. Even Amazon doesn’t operate fully in Switzerland, with customers crossing the border again to pickup goods at a depot, and thus incurring the risk of a customs check when they return across the border.

Though Switzerland’s ability to pick and choose may seem highly appealing, it is not without major flaws that the UK will soon discover. Higher consumer prices, political polarization and despite a sense of still remaining sovereign, being heavily influenced by the EU through its multitude of bilateral treaties. Switzerland proves a country doesn’t have to be in the EU to survive, but that it can never fully take itself out of Europe.

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