Key aspects of agreements being voted on this weekend

Date: 18/05/2000

By Warren Giles

THE package of seven agreements with the EU which will be voted on by the Swiss electorate this weekend was agreed after years of difficult negotiations in December 1998 and signed in Luxembourg in June last year.

Under the free movement of persons accord - which is the most controversial of the seven agreements - Switzerland's seven million citizens would have access to the Union job market two years after the deal enters into force, which is expected to happen in 2001. However, the EU's 370 million citizens would only enjoy similar rights over a 12-year transition period.

'Seasonal worker' categories would be abolished immediately and there would be a preferential allocation within the quota system for Union citizens of 115,000 short-term and 15,000 long-term (one and five years respectively) residence permits effective immediately. Quotas limiting the number of EU workers in Switzerland would be abandoned after five years.

National social security systems would also be co-ordinated to prevent duplication of coverage and Swiss citizens would gain residence rights even if they did not have a job in the Union.

Finally, and necessarily if the labour market is to become more flexible, professional diplomas and qualifications would be mutually recognised.

Securing a deal on overland transport with Switzerland was seen by the EU as a crucial element of the package. Under the terms of the agreement, the Union would have a transitional annual quota of truck journeys between 2001 and 2005, rising to 400,000 authorisations once 40-tonne trucks are admitted in 2005.

From 2001, 34-tonne lorries would be allowed on Swiss roads. A maximum tax would also be payable of up to 1.6 eurocents per kilometre, rising to 3.0 cents/km in 2005.

Consequently, heavy-goods vehicles (HGVs) would eventually pay 13 times more to use Swiss roads than under the existing levy (a 28-tonne truck is currently charged an average €16.02 to travel through Switzerland), generating an estimated annual revenue of €961 million. The tax would rise to an average €110.23 from 2001 for the newly permitted 34-tonners and reach €187.45 from 2005 when 40-tonne HGVs are admitted. Once the NEAT tunnel at Lötschberg is opened in 2006-07, or 2008 at the latest, the fee would reach €208.28.

From 2005, Swiss transport companies would also be allowed to operate freely between EU countries, without having to return home, under new cabotage laws.

The agricultural agreement reached between the two sides would reduce or eliminate trade tariffs in foodstuffs between Switzerland and its neighbours. Cheeses would be traded freely after five years, but exports of Swiss yoghurt and cream to the Union would be subject to a 2,000-tonne limit.

Quotas would also restrict fruit and vegetables, and imports from the EU such as olive oil and port would see customs duties fall or limits increased.

In the aviation sector, Swiss companies would be able to compete on similar terms to their Union rivals and, in the SAirGroup mould, would have the right to hold majority shares in EU firms.

Under the accord, the Swiss have agreed to adopt the Union's bundle of regulations (acquis communautaire), and the relevant legislation and supervision of competition rules would be in the hands of the European Commission and the European Court of Justice.

Over a five-year period, Swiss companies would be granted EU-compatible deregulated rights allowing them to serve any airport with any size of aircraft, as well as operate domestic routes such as Paris-Lyon. Swiss airlines would be able to open new routes and set charges without authorisation. But they would be subject to Union rules governing ground-handling services and time-slot allocations.

Extending World Trade Organisation principles in force since 1996, Swiss cantons, local authorities and private sector firms would be subject to the same rules controlling government contract tenders and awards.

These require all tenders in the public transport, water and energy divisions as well as construction projects to be equally treated, whether foreign or national. The threshold value at which the rules apply would vary between federal government, cantons, local authorities and the private sector, but in all cases would be lower than laid down under WTO commitments.

Bern claims that while the agreement would open the country up to EU bidders, Swiss companies have until now competed at a disadvantage in the sector because of a requirement to submit bids which are at least 3% lower than their Union rivals and include a minimum 50% of the value-added within the EU. The government says that savings to the public purse could be as high as 10% through increased competition.

Compatible industrial product testing standards would make duplicate testing redundant under the agreement on technical barriers to trade (TBT). This is an important consideration for Switzerland's €13.46 billion annual pharmaceutical output, some 60% of which is exported to the Union's member states, according to the industry. These products are currently tested on Union soil. The first sectors to benefit would be machinery, chemical and pharmaceutical firms.

Under the research agreement, Swiss scientists in industry and universities would be able to participate in the EU's fifth framework research programme (FRP), and maintain control over their projects.

This programme is due to expire at the beginning of 2003, but researchers hope that it will be renewed. A requirement for Swiss researchers to engage two Union partners would be reduced and Swiss companies would have access to FRP project results.