Liberals would favour the EFTA

by Dieter Sprock

This year, important negotiations with the EU are due for Switzerland. These will affect our political and economic sovereignty, primarily in the areas of the free movement of persons, the bilateral electricity agreement and the institutional framework agreement. To make matters worse, the EU does not want to accept the decision of the Swiss population to determine immigration themselves again, and makes further negotiations, as for instance those on the access to the electricity market, conditional on a solution of the issue of free movement of persons and on the institutional framework agreement.  This agreement requires Switzerland to adopt existing EU law and also – automatically – its development. However, this is incompatible with our referendum democracy.
Yet Switzerland has no reason to allow itself to be blackmailed. It is in a comfortable negotiating position in regard to the EU, as it has a realistic alternative in the form of the EFTA. And the Federal Council can be sure of the full support of the Swiss population if they do not accept attacks on our sovereignty. Self-determination has a high priority in Switzerland.
Even a brief comparison of the origins and goals of EU and EFTA leaves no doubt on which side freedom and self-determination are to be found.

Customs union and single market versus free trade

The customs union and the single market form the pillars of the EU and its predecessor organisation, the EEC: “ […] the activities of the Community shall include […]: (a) the elimination, as between Member States, of customs duties and of quantitative restrictions in regard to the importation and exportation of goods, as well as of all other measures with equivalent effect; (b) the establishment of a common customs tariff and a common commercial policy towards third countries”. (from the founding treaty of the EEC 1957)1
In order that a European market would evolve from the given customs union, the national laws and regulations of each country, such as consumer protection, safety when working with machinery, food labeling and many more, were unified according to Brussels specifications. The four so-called “fundamental freedoms”, which establish the free movement of goods, services, capital and people, have been in force in the whole EU internal market from 1993. The member states have largely lost their economic and political sovereignty because EU law takes precedence over state law.
But the EFTA is quite different: The EFTA was founded in 1960 as a sort of counter-project to the European Economic Community. It respects the sovereignty of states. Its members cooperate in specific areas, which they define themselves. Negotiations for free trade agreements are conducted by the member states themselves. The EFTA secretariat, a lean organisation, only has a supportive function, while the decisions remain with the member states. “The current members of EFTA are Iceland, Liechtenstein, Norway and Switzerland”, it is stated on the website of Seco, the State Secretariat for Economic Affairs. “In contrast to the European Union (EU), EFTA is not a customs union. Individual EFTA States are basically free to set their own customs tariffs and arrange other foreign trade measures vis-à-vis non-EFTA States (so-called third countries).”2 The EFTA has been negotiating free trade agreements very successfully all over the world.
EEC and EU followed according to “the strategic planning of the United States after the Second World War”, as is shown by documents now accessible in Switzerland, writes Werner Wüthrich.3 He continues: “The United States as the leading world power was controlling events from the sidelines. It favored the EEC idea and opposed the idea of a free trade zone in which the European nations would cooperate as sovereign states. It actively tried to prevent the establishment of the EFTA, because this did not fit into their geopolitical concept. Even when the EFTA had been established in the year 1960, the US worked towards its re-dissolution”.
(pp. 68)

 Who is made free by the EU’s four fundamental freedoms?

The EU leaders never miss an opportunity to make themselves out to be the guardians of the four fundamental freedoms – the free movement of goods, persons, services and capital – and to present them as a kind of remedy for the economic problems of the world. “We all benefit from them,” they say.
But aside from certain amenities, some freedoms as well as travel and payment facilities for more people, on closer inspection the four fundamental freedoms turn out to be the perfect program for enforcing the interests of large corporations and of the financial sector. They have paved the way for the limitless competition and displacement struggle which prevails in the EU internal market today.
The four fundamental freedoms allow companies to move their production to countries where wages are lower. Not infrequently, workers earn less there for 40 hours of work a week than the amount of social security an unemployed person can claim in the richer countries. They allow equity owners of large corporations to buy up and to close competing companies. Even profitable companies are closed. The local industry is destroyed, and now you find the same chain stores and merchandise throughout all over Europe. The four fundamental freedoms are responsible if a Swiss town has to put the construction of a new school building out for tender internationally and has to accept the bid of the firm offering the best price, no matter which country it is based in. The richer countries recruit the best workers from the economically weaker countries and so make it impossible for these to develop their own economies. And so the gap between rich and poor countries is constantly widening.
Using the cross-border trade in electricity as an example, it can clearly be demonstrated that the EU, which wants to impose a complete liberalization of the markets on all its member countries, is not needed. The European electricity grid had been functioning perfectly under private law for 58 years before the takeover by the EU in 2009. The responsible engineers and power plant operators did an excellent job. The focus was on reliability, security of supply and cost effectiveness. With the liberalization of the market the focus will be shifted to return and profit maximization, and it is expected that prices will rise and the security of supply will decrease. (See Current Concerns No. 16 from 6 May 2013, Switzerland and the EU electricity market liberalization – Price increases and Supply Uncertainty are threatening.)

The EFTA offers a realistic alternative

All this is not new. More and more people can see that something is wrong and are no longer fooled by the propaganda that “we all benefit from the freedoms”. Currently an initiative for withdrawal from the EU supported by more than 250,000 citizens has been launched in Austria. The governments of Hungary and Poland are trying to regain some of the sovereignty they lost and to protect their domestic industries. And if Great Britain were to vote on the withdrawal from the EU today, a majority of the English population would be in favour of it. Other countries, fearing the same result, do not even allow a vote like this.
The established parties can no longer confine themselves to disqualifying critics of the EU system, as people will not stop thinking for themselves just because they do. We will need to come to solutions honestly and across all party boundaries before it is too late. In the current situation, the EFTA system provides a realistic alternative, and not only for Europe.     •

1     http://www.ab.gov.tr/files/ardb/evt/1_avrupa_birligi/1_3_antlasmalar/1_3_1_kurucu_antlasmalar/1957_treaty_establishing_eec.pdf
2     http://www.seco.admin.ch/themen/00513/00515/00516/index.html?lang=en
3     Werner Wüthrich. Das Europäische Orchester wieder zum Klingen bringen. Die Geschichte der Europäischen Union und ihre Zukunft – aus Schweizer Sicht, 2015. (How to bring the European orchestra back to euphony. A history of the European Union and its future – from a Swiss perspective). The author relies mainly on documents from the Swiss Federal Archives.