Swissmem agrees to Bilaterals III – but liberal labour market must be preserved

After close to four years of exploratory discussions and negotiations, the Federal Council submitted the Bilaterals III package for consultation on 13 June 2025. It ensures the best-possible access to the EU single market and creates a long-term, viable basis for relations with the EU. For the Swiss tech industry, unobstructed access to the EU single market, which accounts for 55% of sales and is thus the biggest market and an important pool for skilled workers, is key. After an in-depth evaluation by the specialists at Swissmem's headquarters, the Swissmem Council approved the package. The decision is linked to the condition that the liberal labour market is preserved.

Institutional innovations create more legal certainty

The Bilaterals III will bring institutional innovations: the dynamic adoption of legislation obliges Switzerland to also adopt new EU regulations relating to the existing five single-market agreements (free movement of persons, reduction of technical barriers to trade, land and air transport and to some extent agriculture) as well as the new electricity agreement. However, Switzerland can also decide against adopting the legislation – either in parliament or in a referendum. As with any agreement, this would also result in compensatory measures, but these have to be proportionate.

The new arbitration mechanism means that Switzerland is in a much better position than previously. It can now contest disadvantages vis-à-vis the EU itself on an equal footing and is also much better protected than previously against repressive measures by the EU. Harassment, such as exclusion from research programmes, would no longer be possible. The role of the European Court is restricted to interpretation; it is the joint arbitration panel that always takes the decisions.

Free movement of persons with an escape clause

Switzerland has also achieved a lot in the negotiations in relation to the free movement of persons. Migration remains limited primarily to gainful employment. Expulsion from the country as a punitive measure is still possible. The registration procedure for economically motivated short-term employment will be retained. However, Switzerland had to make concessions in terms of residence permits, which may lead to higher welfare expenditure. The escape clause is thus all the more important: firstly, it enables Switzerland to temporarily restrict excessive immigration – even against the will of the EU – in the event of serious economic or social problems. Secondly, the Confederation and the cantons must make maximum use of and even expand the room for manoeuvre in the field of asylum.  

Wage protection measure 14 threatens acceptance of the overall package

In terms of domestic policy measures, the social partners already agreed on a wage protection package in March 2025. Measures 1 to 13 in the package effectively safeguard wage protection without intervening in the liberal labour market. Swissmem therefore supports the package, provided it remains intact in the political process. Measure no. 14 on extended wage protection of up to 35,000 employee representatives, proposed by the Federal Council, clearly goes too far, however. It must be reduced to an acceptable level. Swisscom is prepared to provide constructive input on achieving a balanced solution.

Horizon Europe strengthens innovativeness – Erasmus+ offers too little added value

For Swissmem, full association for Switzerland in the EU’s Horizon Europe research programme is of great importance. Around one quarter of the funded projects favour Swiss SMEs which in turn gain access to expertise, networks and innovative markets. By contrast, Swissmem has rejected participation in Erasmus+. Compared with the existing Swiss solution, the additional benefit of association is too modest, given the considerably higher costs.

Electricity agreement: greater grid stability and lower costs

The new electricity agreement will link Switzerland with the European domestic electricity market, reinforce grid stability and improve the plannability of cross-border electricity current flows. The agreement is of strategic importance to the Swiss technology industry. It opens up the electricity market – albeit while retaining freedom of choice, allows optimum use of hydroelectric power and will tend to result in lower electricity prices.

Bilaterals III: the pros clearly outweigh the cons

Switzerland has negotiated well and achieved a lot. But euphoria would be misplaced. Concerns relating to migration policy are understandable and have to be offset in the field of asylum. In addition, amendments to measure 14 relating to wage protection are needed. Finally, the Bilaterals III and thus the secure and improved access to the biggest economic and partnership of values have a price: the cohesion payments will rise to around CHF 40 per inhabitant over time, but this is acceptable.

Conclusion: The Bilaterals III promote prosperity for our country. The interests of the export-oriented technology industry were taken into account in the core areas – market access, research, electricity supply and legal clarity. The Swissmem Council thus finds that the advantages of the Bilaterals III clearly outweigh any disadvantages. The Swissmem Council will draw up its voting recommendation on the various referendum proposals once parliament has approved the legislation package.