4. Option: Bilateral agreements (The Swiss Model)

Switzerland has bilateral deals with the EU. It still faces regulation without [political input and it pays about 40% as much as the UK to be part of the single market in goods. The Swiss have no agreement with the EU on free trade in services, an area where the UK is a major exporter. Switzerland is a member of EFTA.

Among others Switzerland has deals with the EU covering insurance, air traffic, pensions and fraud prevention. As a member of EFTA Switzerland has free trade with the EU in all non-agricultural goods. The bilateral approach enables flexibility to choose the EU initiatives in

which Switzerland wishes to participate. Currently, there is also free movement of people between Switzerland and the EU, although in February 2014, Switzerland voted in a referendum to impose restrictions on immigration from the EU that would violate its agreement with the EU on free movement of people. Switzerland and the EU have not reached a comprehensive agreement covering trade in services. The treaties require Switzerland to implement policies and legislation set by the EU.

The EU appears to be unhappy with the Swiss model and is unlikely to offer it to anyone else.

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