EU/SWITZERLAND: BILATERAL AGREEMENT IN THE BAG.

Summary: The Austrian Presidency has succeeded in sweeping away the last lingering doubts about the conclusion of a comprehensive EU/Switzerland Agreement. The accord clinched on December 11 and validated by the Member States after over four years of intense talks, focuses on seven business areas: land-based transport, aviation, free movement of people, agriculture, research, public procurement and technical barriers to trade. It was Switzerland's refusal in December 1992 to join the European Economic Area that led to these bilateral negotiations. Their conclusion paves the way to closer ties between the two issues and revives the debate about EU membership for Switzerland.

An historical accord. As soon as he heard that a deal had been clinched at the very last minute, on the sidelines of the EU Summit in Vienna, the European Commissioner for External Relations, Hans van den Broek, welcomed this new stage in EU/Switzerland relations, describing it as a "historical agreement of great political and economic value". He recalled that Switzerland is the EU's second largest trading partner and the country with which the Community has the third largest trade surplus (ECU 8 billion in 1997). The Swiss Federal Council issued a statement claiming that the "conclusion of these balanced and positive agreements is a key means of improving the competitive position of the Swiss economy and curbing the negative implications of its isolated position in Europe". Called to Vienna to celebrate the event, the Confederation's President, Flavio Cotti, said the agreement was vital for the development of his country, which is already at the centre of Europe geographically speaking. Gruelling end to the long-running saga. The December 1 agreement EU Transport Ministers reached on the land-based transport issue set the stage for an arrangement for all sectors. Flushed with this initial success, the Austrians hurried to add this matter to the agenda for the December 7 General Affairs Council, but failed to muster enough support from the Member States. Issued with a brief in 1994 to negotiate with Switzerland, the Commission then took over and stepped up bilateral contacts with the residual reluctant Member States. For example, France won the fight to see to it that white wine produced in the Swiss village of Champagne (Vaud Canton) should not feature the title Champagne on the label of wine bottles and so dropped its reservations about the air transport strand of the...