Carl BaudenbacherThe EU’s call for institutionalization of the bilateral agreements

2.27 Carl Baudenbacher, The EU’s call for institutionalization of the bilateral agreements, excerpt, in Swiss Economic Law Facing the Challenges of International and European Law, p. 582 – 588, Zeitschrift für Schweize-risches Recht, 2012

a) Background

The text at hand appeared as chapter of a General Report to the Schweizer Juristentag 2012, the annual meeting of the Swiss Lawyers Association, which had as Leitmotiv “Das schweizerische Recht vor der Herausforderung des internationalen Rechts” (Swiss law faced the challenges of international law). This annual event is the most representative general event for Swiss law and Swiss legal culture and has a substantial general influence particularly by the annual publications of the general rapporteurs (reporters). The Swiss Lawyers Association at great intervals turns to address and evaluate the international position of Swiss law and Swiss legal culture in a changing world. As said, it chose for the third time in past 25 years its Leitmotiv the international challenges and the position of Swiss law and Swiss legal culture in the internationalising world after the end of the cold war. In 1988, the annual meeting in Bern dealt with the topic “Schweizerische Rechtsordnung in ihren internationalen Bezügen” (the Swiss legal system in its international dimensions), (see text 2.34 Rezeption des Amerikanischen Rechts (the reception of American Law) of Wolfgang Wiegang in the part Americanization. The annual meeting of the Swiss Lawyers Association in the year 2000 in St. Gallen had as a Leitmotiv “Globalisierung und nationales Wirtschaftsrecht” (globalization and national economic and business law), from which the text of Heinrich Koller, at the time the chief legal official of Switzerland on the globalization and internationalization of Swiss business law can be found in the Anthology in the part on globalization in text 2.16. In the part on globalization, the reader also finds another excerpt of Carl Baudenbacher in the text 2.6 with the title “Contribution of Swiss law to Foreign, International and European Law” and a text of Peter Nobel on the role of Switzerland as a center and backoffice of international banking and finance law so to say. (see text 2.5 Globalization)

The reports of the annual meeting general report of the Schweizerischer Juristentag 2012 in Geneva dealt with issues of the influence of international law on Swiss criminal law, Swiss law of banking and financial markets and Swiss conflicts of law. The report of Carl Baudenbacher has approximately 240 pages. The title is Swiss economic law facing the challenges of international and European law. It mainly deals with the concept of economic law (A), the swiss governance model (B), the traditional corner stones of Swiss economic law (C), the impact of international and European law on Swiss economic law (D), Switzerland as a party of treaties with economic law relevance (E), Americanization and Europeanization of Swiss economic law in particular (F), contribution of Swiss law to foreign, international and European law (G) and conclusions (H). For the purpose on the chapter of Europeanization of Swiss law and legal culture of this Anthology, we use an excerpt. The EU’s call for instututionalization of the bilateral agreements. The text may be read in conjunction with Daniel Thürers (text 2.28) opinion for the Swiss government on the basic options to approach the negotiations in the area of institutional set ups and the (text 3.24) letter of the Federal Tribunal on the Issues.

Carl Baudenbacher was a full professor of civil-, commercial, and business law at the Univeristy of St. Gallen. He became an emerite in 2013. He is the Director Executive of Masters of European and international business law MBL – HSG. Carl Baudenbacher is an outspoken scholar, often criticising as well as at times consulting the Swiss government. Carl Baudenbacher is one of the few truly internationalized, – here Europeanized – Swiss legal scholars, who took their academic and professional activities international. He early taught in Germany, he advised the Principality of Lichtenstein in its accession to the EEA agreement and was named by the Principality of Liechtenstein to become a member of EFTA Court, of which he still acts as President.
The excerpt at hand is a critical comment on the EU’s call for institutionalization of the bilateral agreements, as a precondition of starting to negotiate on a third package of bilateral agreements.

b) Summary

The EU and Switzerland have concluded some 120 bilateral agreements, 20 of which according to Baudenbacher are of special significance for which conflicts are, as a rule, to be settled by diplomats. After the second package of bilateral agreements, Swiss political and business circles floated the idea, that the bilateral path should devolve into a specific Swiss form of European integration, thereby putting on the backburner the long term objective of EU membership. The European Economic Area from this perspective was largely depicted as inferior to bilateralism, in particular from the point of view of state sovereignty. When talks were opened with the EU for further bilateral agreements, for instance in trade in electricity, chemical safety, food and product safety and free trade in other cultural goods, the European Union, according to Baudenbacher, became less and less enthusiastic about the sometimes slow taking over of new acquis and the diplomatic conflict management. In December 2008, the Council of the EU claimed that Switzerland had not fully implemented the EU acquis in the area of free movement of persons and that certain cantonal tax regimes were not compatible with the state aid provisions of the 1972 EU- Swiss Free Trade Agreement. In December 2010, the European Parliament called on Switzerland to agree to a horizontal mechanism. The EU-Commission on its part made it clear to Switzerland, that the conclusion of new bilaterals could only be envisaged if a satisfactory solution could be found for institutional issues such as: 1) dynamic adjustment of bilateral law to new relevant EU acquis, 2) a mechanism ensuring a uniform interpretation of bilateral law, 3) a mechanism for monitoring compliance with the bilateral treaties and 4) a judicial mechanism.

Baudenbacher’s conceptional remarks patently show a clash of two concepts of Switzerland’s integration in Europe. In the course of the years 2010-2011 Switzerland indicated nolens volens, that it would be prepared to speak about an institutionalization of the bilateral agreements, after the Federal Council’s report of September 2011 discussed three options, after Daniel Thürer, who had been commissioned by the Federal Council to write an opinion to come to the conclusion that the creation of a bilateral judicial or arbitration mechanism would be legally impossible. Thürer presented three models, 1) the docking to the EEA – EFTA surveillance authority and EFTA court, 2) the creation of a Swiss implementation body and a chamber at the Federal Tribunal and 3) the creation of a Swiss implementation body and of a judicial forum with the Federal Tribunal. The three models refer to so-called “pillar models”. On the 26th April the Federal Council announced that it planned to propose a “two pillar” model to the European Union consisting of a Swiss pillar and an EU pillar. The Swiss pillar of an “independent” surveillance authority consisting of Swiss citizens would be elected by the Swiss parliament and the judicial function would be exercised by the Federal Tribunal. Baudenbacher strongly argues against such a model. He gives detailed reasons that he has taken to the general public as well.

This issue is still subject to negotiations between Switzerland as a precondition for further negotiations for bilateral agreements.

c) Text

You can find a scan (PDF) of the original text here:
E_2.27_BAUDENBACHER_EU’s call

© Prof. Jens Drolshammer, office@drolshammer.com,  www.drolshammer.net

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