Safeguarding access to export markets

Switzerland has extensive links with the European Union (EU), which are governed by around 120 formal agreements. Important milestones are the Free Trade Agreement of 1972, Bilateral Agreement I of 1999 and Bilateral Agreement II of 2004.

Bilateral Agreement I, which came into force in 2002, is extremely important for the Swiss economy and for Switzerland as a pharmaceutical location, as around half of all pharmaceutical exports go to the EU. Thanks to Bilaterals I, Switzerland, as a non-EU Member State, has MRA-country status (MRA: Mutual Recognition Agreement). Conformity assessment (audit, inspection, certification) are therefore mutually recognized between Switzerland and the EU. This is crucial for export-oriented companies in the machine industry and especially for pharmaceutical manufacturers.

Market access and recruitment of skilled workers

The 1972 Free Trade Agreement abolished tariff barriers to trade (especially customs duties), among other things. However, access to the EU market was only effectively facilitated thanks to Bilaterals I, which removed technical barriers to trade. This is one of the key achievements of Bilaterals I and has led to a significant increase in export volumes to EU markets.

Another key outcome of Bilaterals I is that companies can recruit skilled workers from within the EU without any red tape. Access to appropriate labor is particularly important for the research-based pharmaceutical industry with its highly specialized jobs.

Bilateral relations are essential

Stable relations between Switzerland and the EU and unhindered access to the European single market are crucial for the future of the research-based pharmaceutical industry in Switzerland. Almost half of pharmaceutical exports go to the EU, which explains why companies in Switzerland rely heavily on updating the MRA and the freest possible access to the EU single market. The free movement of persons and research cooperation, particularly the association with Horizon Europe, are also extremely important for the industry.

The most important agreements for the pharmaceutical industry:

Agreement on the Free Movement of Persons (AFMP)

• Ensures access to skilled workers from the EU.
• The Swiss pharmaceutical industry employs more than 47,000 people.
• The Swiss labor market is too small to meet the demand for workers in this sector. This is particularly important in view of the shortage of (skilled) labor.
• The number of people coming to Switzerland via the free movement of persons is primarily determined by demand on the labor market. According to SECO’s Observatory report, 90 percent of all freedom of movement migrants now arriving in Switzerland are employees and their family members.

Mutual Recognition Agreement (MRA) on conformity assessment

• Enables stable supply chains at competitive costs.
• The pharmaceutical industry exports CHF 109 billion per year, 47 percent of which goes to the EU. Overall, the pharmaceutical industry is Switzerland’s largest exporter.
• Technical trade barriers would have negative consequences for Switzerland as a pharmaceutical and production location, as well as for the economy as a whole.

Research cooperation – (framework programs for research and innovation)

• The research agreement will enable researchers in Switzerland to participate in the EU’s prestigious research programs (Horizon Europe/IHI) on an equal footing, thereby gaining access to a network of world-leading researchers.
• Since 2021, Switzerland has been treated as a non-associated third country as part of the Horizon package. For Switzerland as a research location, it is important that as soon as negotiations begin, researchers in Switzerland can once again participate in European Research Council tenders.
• In addition to the direct impact on researchers, non-association also has a negative impact on the research cluster in Switzerland, which benefits the research-based pharmaceutical industry by means of innovative university spin-offs, for example.