After 7 years of negotiations, Switzerland walked away from efforts made to agreeing over modernizing bilateral treaty with European Union. Switzerland is not in the European Union but has signed up to many of its policies, such as freedom of movement. The relationship is currently governed by more than 120 bilateral deals, and a failure to replace them with one framework deal could harm ties.
Negotiations began in 2014 and a full draft text was reached in November 2018, setting in motion a back-and-forth between Bern and Brussels to add clarifications and amendments. Two years went by without progress until discussions were resumed earlier this year.
The Swiss Federal Council concluded that there remain "substantial differences between Switzerland and the EU on key aspects of the agreement" and "the conditions are thus not met for the signing". The Swiss government has highlighted three issues: protection of wages, rules governing state aid, and the right of EU citizens working in Switzerland to claim Swiss welfare benefits as part of freedom of movement.
The right-wing Swiss People's Party (SVP) welcomed the breakdown of talks as "a victory for Swiss self-determination", while trade unions were also pleased as they had been concerned about the impact on wage protection and public services. But most political parties in Switzerland were critical: Socialist party leader Roger Nordmann described it as "Black Wednesday".
European Commission, which leads the negotiations on behalf of all member states, said it regrets "the decision, given the progress that has been made over the last years to make the Institutional Framework Agreement a reality".
Nevertheless, the Commission warns that a failure to modernise the relations could lead to less free trade, more difficulties for food imports and air carriers, and Switzerland's exclusion from EU agencies and mechanism, like the European Center for Disease Prevention and Control (ECDC) and the EU4Health programme.