Brexiters should be scared by current EU-Swiss market access talks
The Observer newspaper reported on Sunday that "Senior British and EU sources have confirmed that despite strong initial resistance from French president François Hollande in talks with prime minister Theresa May last week, the idea of an emergency brake on the free movement of people that would go far further than the one David Cameron negotiated before the Brexit referendum is being examined." However Brexiters should be scared by current EU-Swiss talks on market access.
Any deal would involve a UK contribution to the EU budget.
Both Norway and Iceland have access to the single market through their membership of the European Economic Area (EEA). But they are required to comply with all the EU’s single-market regulations without having any input on changes; to pay into the EU budget (Norway pays about 90% of the UK's net payment per head) and to accept free movement of EU migrants.
While Switzerland is not a member of the EEA, it has bilateral agreements, which give it access for goods but not most services. It has to comply with most single-market rules, contribute to the budget and accept free movement of people. The Swiss have been warned that, if they try to implement a 2014 referendum demand for limits on the latter, their trade agreement with the EU will lapse.
“I’ve absolutely no doubt that that balance can be struck, and over the next few weeks we’ll be discussing that in the (UK) government and with our European friends and partners,” Boris Johnson, Brexiter and foreign secretary, is reported by the Observer to have said in New York last week.
“Everybody wishes to make fast progress in the economic interests both of Britain and of the European Union. I think there is very much a deal there to be done, and the faster we can get it done the better.”
Before the eurocrats get around to dealing with Brexit, the Swiss are struggling to get agreement from the EU on a compromise on a Feb 9 2014 Swiss referendum that limits migration after a 50.3% win. Feb 9 2017 is the deadline for implementation of the referendum vote. Foreigners account for 27% of the population compared with 13% in Germany, UK and US.
About 300,000 workers cross Swiss borders from France, Germany and Italy every day.
Apart from the issue of free movement of people, there is a "guillotine clause" that could result in cancelling six other bilateral agreements, including on air transport, road, rail and agriculture.
"I don't see any possibility for the EU to give anything to Switzerland," said René Schwok, a professor at the University of Geneva and author of books on Swiss-EU relations, according to Reuters.
The referendum has already resulted in Switzerland being dumped from Europe's "Erasmus" university exchange programme.
In late June following the Brexit result, Johann Schneider-Ammann, the Swiss president, told the Sonntags Zeitung newspaper in an interview that Switzerland should instead of overall limits, propose to set limits only to protect at-risk sectors in specific regions:
<blockquote>Let's imagine that in (the Italian-speaking canton) Ticino an above-average number of immigrant taxi drivers is recorded while at the same time many taxi drivers are unemployed.</blockquote>
Between 2012 to 2014 an average of slightly more than 50% of the UK’s exports of goods went to the EU and just under 50% to non-EU territories, primarily the USA and China, according to the UK's Office for National Statistics (ONS).
Last year, goods exports to non-EU countries pulled ahead, with a 53% share of the total.
In 2014, the United States was the country with the single largest share of UK exports of goods and services, but seven of the UK’s main trading partners are from within the EU (Germany, Netherlands, France, Ireland, Belgium and Luxembourg (combined), Italy and Spain).
Germany has a big trade surplus with the UK but France has a deficit. Ireland has a deficit with the UK and it would be bigger if Google and Facebook's UK sales were booked there and not in Ireland.
Germany has an incentive to cut a deal with the UK but getting agreement from all the other 26 EU countries will be a challenge.
The ONS says that the UK is an important part of the EU supply chain, as a relatively high proportion of its exports of goods are components manufactured in the UK for onward assembly elsewhere in the EU.
For example, Airbus aeroplane wings are manufactured in the UK for export and onward assembly in other parts of Europe.
The UK tends to export more components, fuels, food and beverages, and basic materials to the EU than non-EU countries, but export more finished goods and services to non-EU countries than to the EU.