October 11, 2018 / 4:18 PM / 5 days ago

Swiss minister plays down mid-October deadline for EU treaty deal

ZURICH (Reuters) - Swiss Transport Minister Doris Leuthard played down a mid-October deadline from the European Commission to strike a deal on a new treaty cementing ties with Switzerland’s biggest trading partner.

“We have no time pressure,” the pro-Europe minister who is stepping down at year’s end told the Finanz und Wirtschaft paper in an interview published on Thursday when asked about the Oct. 15 date Brussels has set for an accord.

“European Commission President Jean-Claude Juncker is in office until May 2019. Of course it would be desirable to clinch a treaty before then. We still hope to find a solution this year,” she said.

Talks have dragged on for more than four years on a treaty that Brussels demands, complicated by Britain’s separate negotiations on divorce terms from the European Union and disagreement over Swiss rules to protect high wages.

Leuthard, who helped patch up rocky ties with the EU when she was Swiss president in 2016, refused to budge on labor rules that unions and small business defend as a way to keep cross-border foreign laborers like plumbers and electricians from undercutting Swiss pay.

“We accept the principle of the free movement of people (from the EU) but insist on setting national rules for working conditions,” she said. “We have a different social security system than Europe’s... Our intention is to stay tough and count on the EU to make concessions.”

Brussels has been stepping up pressure on non-member Switzerland to agree a pact that would sit atop an existing patchwork of 120 sectoral accords and have the Swiss routinely adopt changes to single market rules.

The treaty would also provide a more effective platform to resolve disputes. It would focus on five areas linked to the single market: the free movement of people, civil aviation, land transport, mutual recognition of industrial standards and processed farm goods.

Should treaty talks fail, the sectoral accords would stay in effect but bilateral relations would enter a deep freeze.

Failure to strike a deal would mean no increase in Swiss access to the single market, dashing hopes for a new electricity union. It could also endanger unfettered EU market access for Swiss makers of products such as medical devices.

Brussels has threatened not to extend beyond this year recognition of Swiss stock exchange rules that allow cross-border trading, which could touch off tit-for-tat escalation.

Reporting by Michael Shields, editing by John Miller

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