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ANALYSIS: What Brexit means for Switzerland

The trade agreement between Brussels and London contains a lot that sounds good to Swiss ears. The bilateral path, however, follows a different logic than the British model, writes the Neue Zürcher Zeitung.

ANALYSIS: What Brexit means for Switzerland
Photo: NIKLAS HALLE'N / AFP

The following column was written by Christoph G. Schmutz and Tobias Gafafer and appeared in the Neue Zürcher Zeitung. It has been translated from German and republished by The Local Switzerland with permission. 

Switzerland has also followed the negotiations between Great Britain and the EU with excitement. The question arose as to whether a larger country could wrest more from Brussels than the Bern negotiators have so far been able to do. 

This is a first look at the British free trade agreement from a Swiss perspective.

So has Prime Minister Boris Johnson achieved something that would also be of interest to Switzerland? At first glance, it appears to be the case. 

Great Britain and the EU have agreed on a free trade agreement with additional elements that does not provide any role for the European Court of Justice (ECJ). In addition, London will not completely follow EU laws and will not have to adhere to the EU rules on state aid. 

READ MORE: Swiss President: Brexit is good for Switzerland and the whole world

The Autonomiesuisse committee announced that the Brexit agreement should serve as a model for Switzerland in the talks with Brussels.

However, there are significant differences between the British model and Switzerland's bilateral path, mainly because Great Britain is moving away from the EU and the single market.

Bern signed a free trade agreement with Brussels as early as 1972 that, among other things, abolished customs duties and quantity restrictions for industrial goods. To this day, it forms the basis for the bilateral relationship. 

The British agreement is roughly comparable to this, but covers other areas, as time has not stood still since 1972.

After saying ‘no’ to the European Economic Area in 1992, Switzerland came closer and closer to the EU and the internal market. With the bilateral agreements, it participates in this sectorally – and in some cases also adopts EU law. 

So it is a different model that follows a different logic. Bern and London are pursuing the same goal: both want to have a good starting position in relation to the most attractive domestic market in the world. But the closer the market access, the closer the legal harmonisation.

Autonomy or market access?

Brussels insisted that there was no participation in the internal market through a free trade agreement. Great Britain thus has worse market access than Switzerland – but also does not adopt EU law. 

So it is to be explained that the ECJ does not play a role, as Johnson demanded. The commercial agreement between Brussels and London provides that in the event of a dispute, under certain conditions, the parties can refer to an arbitration tribunal.

An arbitration tribunal is also provided for in the draft framework agreement between Bern and Brussels. However, it has to consult the ECJ when it comes to the interpretation of Union law. Switzerland intends to bind itself more closely to the EU and to conclude new market access agreements. 

This also increases the importance of Union law. The ECJ, however, insists on the position that only it can interpret this conclusively. That is why Brussels will hardly be able to make concessions in this domain.

In principle, the British route would also be open to Switzerland. However, this would mean cutting back on market access, which would mean dismantling the bilateral agreements. 

With the Schengen Treaty, for example, Bern cooperates more closely with Brussels than Great Britain did as an EU member. In 2015, the Federal Council dealt with the question of whether a free trade agreement would be an alternative to bilateral agreements. 

In response to a postulate by the then Councillor of States Karin Keller-Sutter (FDP), He wrote that the needs of the Swiss economy would not be adequately taken into account even with a modernised free trade agreement.

The bilateral agreement enables Swiss companies to participate in the internal market in many areas, which is comparable to the competition from the EU. 

This will no longer be the case for British companies in the future. Rather, there will be new trade barriers. 

For example, the Brexit Agreement does not contain an agreement on the mutual recognition of conformity assessments that would remove non-tariff trade barriers. Switzerland, on the other hand, has such an agreement with the EU.

Great Britain is therefore sacrificing better access to the EU internal market in favour of more sovereignty. How sensible that is is one question. Whether Switzerland should imitate that, the other. 

In 2015, the Federal Council pointed out that Switzerland would probably comply with many EU rules anyway, even without an obligation, because this would be in the economic interest. In some cases this is already the case today.

Stricter aid regime

In terms of state aid, the EU has moved away from the maximum requirement that Great Britain must comply with EU law. 

However, London undertakes to monitor subsidies according to defined principles in the future. And the agreement allows countermeasures if grants on the other side of the channel are too generous.

The framework agreement provides for a stricter aid regime than what Switzerland has known so far. But this is initially only applicable to the aviation agreement, which already contains such rules. 

However, the new regime would also apply to future market access agreements, for example for electricity. In this area, however, the last word has not yet been spoken. The aid is one of the issues on which the Federal Council is demanding that the EU make improvements.

Bern is still striving to conclude a framework agreement. The talks with Brussels about the improvements were delayed and will probably not take place until 2021. 

The government then has to decide whether to sign the agreement and submit it to parliament.

Despite a different logic, there are also parallels to Great Britain. London wants to participate as a third country in the new EU research program Horizon Europe. The same conditions should apply to Switzerland. 

In addition, financial services are not included in the trade agreement with the EU. Brussels will decide unilaterally whether British regulation is equivalent – or can refuse equivalence depending on the political mood, as was the case with the Swiss stock exchange.

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JOBS

Zurich versus Geneva: Which Swiss city is better for job seekers?

Switzerland’s two largest cities and their surrounding areas are where most employment opportunities can be found. This is what you should know about what each of these locations has to offer.

Zurich versus Geneva: Which Swiss city is better for job seekers?

While Zurich and Geneva are different in some regards, such as the language spoken there — Swiss-German in the former and French in the latter — the two cities also have some things in common.

For instance, both frequently feature among the most expensive cities to live in various international surveys.

The latest one, carried out by a global mobility organisation, ECA International, found that globally Geneva and Zurich were ranked in the third and seventh place, respectively, in a survey of 20 most expensive cities for international residents.

However, on the European scale, Geneva was placed in top spot and Zurich in third.

But what about their job markets? Where should you look for a job — in Zurich or Geneva?

Your search may depend on personal factors such the area where you already live (or want to live) and the language you speak.

If you are fluent in French but not so much in Swiss German (or high German), then the choice is clear (and vice-versa). Even if English may be the main language in the office, you will still heed to speak local language outside of work.

But if you are open to moving wherever good job opportunities are plentiful, regardless of language skills, which city / area should you opt for?

The Local asked Stephan Surber, Senior Partner, Page Executive – a sister company to Michael Page recruiter for some insight.

Which market is more attractive to qualified employees, and why?

“Both Geneva and Zurich provide considerable opportunities to skilled professionals”, Surber said.

However, according to the Michael Page Swiss Job Index, the number of advertised jobs in May was over nine times bigger for canton Zurich than for canton Geneva. 

Do both cities/region offer similar positions in similar industries, or are they different and if so, how?

“Both offer roles in key industries such as financial and professional services, as well as health and life sciences”, Surber said.

They typically differ from one another in the concentration of industries. For example, Geneva has a higher concentration of international NGOs such as the United Nations, the Red Cross and the World Trade Organisation, as well as commodity traders.

Zurich also has these sectors but is better known for its concentration of Swiss-based, international financial institutions such as UBS, Credit Suisse, Zurich Insurance and Swiss Re, among others.

Is there a difference in terms of salaries for the same jobs / positions in each city?

There is no significant difference for professionals, in salary and compensation levels, according to Surber.

He pointed out that salaries in all major Swiss cities are at similar levels, with differences typically occurring between major Swiss cities and smaller, regional areas, and within small to medium organisations.

Compensation levels also vary across industries and according to the level of experience and the type of role.

READ MORE: What is the average salary for (almost) every job in Switzerland

Demand is especially strong right now in sectors such as technology, healthcare and life sciences, as well as the private market industry.

For job seekers who are new to either city, Surber recommends building your professional network, for example by joining local chambers of commerce and / or professional associations.

These articles provide more information about finding work:

‘It’s competitive’: Essential advice for finding a job in Zurich

How hard is finding work in Zurich without speaking German?

Why finding a job in Switzerland is set to become easier
 

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