Switzerland`s economic and trade relations with the EU are mainly governed by a series of bilateral agreements in which Switzerland has agreed to adopt certain aspects of EU legislation in exchange for access to part of the EU internal market. In 1992, Switzerland held a referendum on membership of the European Economic Area, which allows members of the European Free Trade Association to participate in the EU Single Market. The Swiss voted against EEA membership and chose to continue to adopt a strictly bilateral approach in their relations with the EU. Membership of the EEA would have forced Switzerland to take back part of EU law. The result of the referendum on extending free movement to Bulgaria and Romania, which joined the EU on 1 January 2007, prompted Switzerland to violate its obligations to the EU. In September 2009, the Swiss government declared that bilateral treaties are not solutions and that the members` debate needs to be reviewed, while the Green Left Party and the Social Democratic Party said they would renew their initiative for Switzerland`s accession to the EU.  Negotiations between Switzerland and the European Commission on an institutional framework agreement began in 2014 and were concluded in November 2018. On 7 December 2018, the Federal Council decided not to accept or reject the negotiated agreement, but to opt for a public consultation.  The negotiated agreement would cover five areas of existing agreements between the EU and Switzerland in 1999: the federal government has recently undergone several major political reversals, but the Swiss banking system has been dealt with under specific agreements with the EU on the free movement of workers and the sectors of tax evasion. This was the result of the first Ue-Switzerland summit in May 2004, during which nine bilateral agreements were signed. Romano Prodi, former president of the European Commission, said the agreements had “brought Switzerland closer to Europe.” Joseph Deiss of the Federal Council said: “We may not be at the centre of Europe, but we are definitely at the heart of Europe.” He continued: “We are entering a new era of relations between our two entities.”  Following the ratification of bilateral agreements II, the Swiss government classified its review of full EU membership from a “strategic objective” to an “option”, thus signalling the country`s reluctance to take steps to become a member of the EU. Switzerland and the European Union are now considering a third round of bilateral agreements, but differences have emerged between the EU and Switzerland over other bespoke agreements. Some EU officials have begun to reject Switzerland`s bilateral approach to relations with the EU, which they consider too bureaucratic.
The EU also wants a broader agreement and Switzerland wants to automatically adopt EU law, but Switzerland insists on continuing the bilateral trend. There are currently more than 100 bilateral agreements between the EU and Switzerland. In 2004, a series of sectoral agreements (known as “bilateral II”) were signed, including Switzerland`s participation in Schengen and Dublin, as well as agreements on the taxation of savings, processed agricultural products, statistics, anti-fraud, participation in the EU media programme and the Environment Agency.