Swiss want arbitration panels to settle disputes with EU

ZURICH (Reuters) - The Swiss government wants arbitration panels to help settle disputes with the European Union under a new treaty that would bind the neutral country more closely to its biggest trading partner, it said on Monday.

Swiss Foreign Minister Ignazio Cassis gestures during a news conference in Bern, Switzerland January 31, 2018. REUTERS/Stefan Wermuth

Bern also spelled out for the first time just what it wants under a treaty that would replace the patchwork of 120 bilateral accords that now govern ties.

Foreign Minister Ignazio Cassis told reporters that getting seven cabinet members from four parties to agree on a unified platform for talks marked a major step forward after their squabbling hamstrung years of talks and irked top EU officials.

“The government is ready with this proposal to take a realistic approach ... but it will be hard,” he said. At least it should be possible to know this year whether a deal was politically possible, he added.

Brussels has put pressure on non-EU member Switzerland to sign a treaty that would see it adopt EU laws governing the single market as the price of enhanced access. The European Court of Justice (ECJ) would give its opinion on disputes involving how to interpret single-market rules.

This is anathema to the anti-immigration Swiss People’s Party, the largest in parliament, which has two cabinet seats.

Many Swiss conservatives are also wary of giving “foreign judges” such power, so setting up arbitration panels could help move talks forward.

Cassis said Switzerland would decide for itself which EU laws to adopt. Brussels could impose countermeasures in cases where Switzerland did not take on EU laws, and the arbitration panels could rule on whether these measures were appropriate.

The exact remit of the panels was still being discussed.

Sources close to the talks have said the EU proposed last year letting an arbitration court handle some disputes, and Cassis confirmed this on Monday.

The treaty issue is politically fraught ahead of elections in both Switzerland and the EU in 2019, which in effect means any deal has to be done this year. Separate EU talks with Britain on shaping ties after Brexit are a complicating factor.

Cassis said Switzerland wanted the treaty to focus on five areas: aviation, rail traffic, the free movement of people, mutual recognition of standards, and processed farm products.

But Switzerland also wanted a quick deal on joining the single electricity market, he said.

It sought to skirt the thorny issue of how to regulate state aid - common in Switzerland - by proposing autonomous supervisory bodies for both Switzerland and the EU.

In Brussels, the Commission said its priority remained negotiating a framework agreement this year that could pave the way for further Swiss market access “in different areas and according to EU interests”.

It praised Swiss willingness to work on outstanding issues, notably the ECJ’s role in resolving disputes and ensuring a level playing field through rules on state aid.

“For the Commission, the most important principle guiding the negotiations remains that there cannot be any cherry-picking,” it said.

Additional reporting by Phil Blenkinsop in Brussels; editing by Larry King