EU warned Switzerland is going to react after bloc pushed UK out of key treaty

Switzerland: Reporter discusses collapse of EU trade talks

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After Britain officially left the transition period in January, Prime Minister Boris Johnson has had to ask the EU for permission to rejoin an international treaty, or risk devastating a multi-billion-pound legal services industry. The agreement is called the Lugano Convention and its effects are materially the same as the 2001 Brussels Regulation. It governs issues of jurisdiction and enforcement of judgments between the EU member states and the European Free Trade Association (EFTA) countries other than Liechtenstein (namely Iceland, Switzerland and Norway).

London is regarded as the global capital for international dispute resolution, due to England’s world-class legal system and courts.

A long-term failure to rejoin the Lugano Convention could do real damage to the UK’s world-beating legal services sector, as well as creating difficulties for large companies.

The UK dropped out of the treaty as a consequence of Brexit, and applied to rejoin in April 2020.

Such accession requires the unanimous agreement of all the other contracting parties to the Convention and the European Commission has now recommended that the EU deny this request.

It said that the European bloc was “not in a position” to give its consent to UK accession.

The EU’s position is not shared by EFTA countries, though, who have proven to be much more welcoming.

In March 2021, the Swiss Federal Department of Foreign Affairs published a letter confirming that Switzerland had consented to the UK being invited to deposit its instrument of accession to the Lugano Convention.

The letter reads: “Switzerland welcomes the intent of the United Kingdom (UK) to accede to the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the ‘Lugano Convention 2007’) and will support a request for accession from the UK.”

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In an exclusive interview with, a UK Government trade adviser, who wishes to remain anonymous, has claimed the EU needs to be careful, as Switzerland might “react” if the bloc continues to throw off Britain.

He said: “I think the EU has to be careful, particularly with the EFTA countries and Switzerland, as they could push them away with their actions.

“Mainly Switzerland because what Switzerland does is different.

“It voluntarily aligns to EU regulation, which is obviously quite controversial and it is becoming more and more controversial.

“For example, the Swiss had their own data protection act, lower penalties for GDPR and the EU said because it was different, that they were going to punish them on financial services even if the outcome was the same.”

He added: “If you add this to that, then I think you are going to get into a situation very quickly where the Swiss are going to react.

“The EU has to be careful about this.

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“What is the benefit of the European Community and what is the benefit for European companies to have the UK in the Lugano convention?

“I wouldn’t throw the UK off things for the sake of throwing the UK off things when I could be hurting my own economic interests.”

After years of talks, last month, Switzerland announced its decision to scrap efforts aimed at agreeing an overarching treaty with the EU.

Switzerland is not in the bloc but has signed up to many of its policies, such as freedom of movement.

The relationship is currently governed by more than 120 bilateral deals, and a failure to replace them with one framework deal could harm ties.

The European Commission said: “We regret this decision, given the progress that has been made over the last years.”

The EU-Switzerland free trade agreement dates back to 1972.

The European Commission said that without an EU-Swiss framework agreement, modernising that relationship would not be possible.

Existing deals were “not up to speed” and the impact of Switzerland’s decision would have to be analysed, it warned.

The right-wing Swiss People’s Party (SVP) welcomed the breakdown of talks as “a victory for Swiss self-determination”, while trade unions were also pleased as they had been concerned about the impact on wage protection and public services.

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