June 13, 2018 / 3:13 PM / 10 months ago

Swiss signal labor rule flexibility in EU treaty talks

ZURICH (Reuters) - Switzerland is prepared to take a flexible approach to labor market rules in talks with the European Union on a new treaty, Foreign Minister Ignacio Cassis said, signaling movement on a potential stumbling block for any deal.

Swiss rules for how foreign companies deploy workers for short-term projects are a thorn in the side for Brussels, which also wants the treaty to regulate Swiss state aid that could skew competition, diplomats say.

The European Commission is counting on Switzerland to make concessions on the two areas after Brussels last year agreed in principle to let arbitration panels settle some disputes under a new accord to formalize ties with non-member Switzerland.

That helped ease Swiss concerns about letting “foreign judges” rule on disputes, anathema to the Swiss far right.

In an interview aired by Swiss broadcaster SRF on Wednesday, Cassis seemed open to changing labor rules that the Swiss cabinet has in the past called a non-negotiable “red line” and that labor unions insist remain in place.

“Both the EU and Switzerland must be ready to take the plunge and find creative ways,” Cassis said when asked about the labor measures and how to protect domestic workers from cut-rate foreign competition.

“I think if both sides make an effort there is a chance of agreeing,” he added, suggesting for example halving to four days the notice period employers have to give Swiss authorities before sending workers across the border for projects.

Paul Rechsteiner, head of the Swiss labor union federation and a member of the upper house of parliament for the center-left Social Democrats in government, opposed the suggestion.

“There is absolutely no reason to give in here just because EU says it doesn’t like the deadline,” Rechsteiner told SRF.

Switzerland in 2004 introduced “flanking measures” to protect Swiss wages and working conditions, two years after a deal to let EU citizens live and work in Switzerland came into effect. Such free movement is a prerequisite for Swiss access to the EU single market.

Both sides aim to hammer out an accord on a treaty this year, with negotiations heating up before the summer break.

But any deal faces Swiss voter approval under the country’s system of direct democracy, and parallel EU negotiations with Britain over terms of its EU exit also complicate matters. Many Swiss politicians think the Brexit talks could open new approaches for the Swiss as well.

Reporting by Michael Shields; Editing by Jon Boyle

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