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Dr. Margrit MüllerUniversity of Zurich, Institute for Empirical Research in EconomicsWinterthurerstrasse 30, CH-8006 ZürichE-mail: marmu@hist.unizh.ch

XIV International Economic History Congress, Helsinki 2006Session 17: The European Enterprise.Has European Integration created a specific firmapart from national and global enterprise?

The impact of European integration oninstitutional change and corporate behaviour in Switzerland

(work in progress, not to be quoted)

1. Introduction

In several theoretical approaches, special weight is given to the national origin of firms as a

kind of natural basis for their competitive advantage.1 These theoretical concepts concentrate

on the differences between nations. With regard to our theme the question has been raised,

whether the national origin as distinguishing feature has been overestimated in the case of

European nations. The literature on different types of capitalism highlights common features

for different groups of European countries and for specific periods of time.2 Within the

European Union not convergence but uneasy rivalry seems to have prevailed. 3 Can Europe be

understood as a supranational context that shapes “European firms”?

I believe that in the outlines and background information we received from Harm Schröter,

three main approaches to our theme can be distinguished:

(1) Firms in European countries are and have always been European firms, because they share

a common historical and cultural background. It is possible to identify the common traits by

comparing firms in different European countries with firms in other regions, especially in the

US and Japan. In my view, this concept of the “European firm” is not very promising as a

1 Porter, Michael E. (1990). The Competitive Advantage of Nations. London: McMillan; Lundvall, B. A. (ed.)(1992), National Systems of Innovation - Towards a Theory of Innovation and Interactive Learning. Pinter:London; Nelson, Richard R., National innovation systems,1993.2 Katzenstein P. (1985) Small States in World Markets. Industrial Policy in Europe, Cornell University Press,Ithaca; Hall Peter A., David Soskice, eds., Varieties of Capitalism. The Institutional Foundation of ComparativeAdvantage. Oxford University Press 20013 Wilks Stephen, Regulatory compliance and capitalist diversity in Europe. Journal of European Public Policy 3;4 December 1996: 536-59; De Clercq M., Institutional Dynamics in the EC. In: Rugman, Alan M.; Van denBroeck, Julien; Verbeke, Alain.Beyond the Diamond. London: JAI Press, 1995, pp. 201-228

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general approach, because of the variety of national or regional business systems within

Europe (and we know from other comparative research that historical comparison leads to

interesting results with regard to diversity, but hardly produces findings that can be

generalized in time and space). The necessary conditions for such a comparative approach to

reveal similarities are common constraints that differ from those in other regions and shape

the firms in the European countries in a specific way. The approach may, therefore, be

adequate for certain sectors of the economy, for example for public utilities in western

European countries.

2) Another approach conceives European firms as a consequence of the fact that firms in

European countries expanded their activities mainly to other European countries and

inevitably integrated the different institutional settings and cultures. The firms emancipated

from their national origin, and in the course of this process, they began to understand

themselves as European (not British, French or Swiss) firms. The problem with this concept is

that firms have expanded their activities also to other regions of the world (for example to the

colonies) or only to the neighbouring European countries. Further more, they may have

handled cultural diversity within their firm not by creating a European corporate culture but

by becoming “multidomestic” firms, in the sense of Porter.4 It should be noticed that this

second concept of the “European firm” is not compatible with the first one. Firms active only

in the domestic market are excluded, even if they share common characteristics according to

the first concept.

3) The third approach focuses on the evolution of the “European firm” as a possible

consequence of European integration. The main agent of change is the European

Community/Union and “Europe” comprises the EC/EU and EFTA countries. This approach

has only apparently some similarity with the second one. In contrast with the second concept,

it focuses on the evolution of common formal institutions, on the main agents of change, their

aims and means on the European and national level, and not on the location of the firms’

business activities. It differs also from the first concept, because it starts from the assumption

that there are large differences between national business systems within Europe and the

questions are, when, where and in what areas trends towards homogenization can be

perceived.

4 Porter, Michael E. (1990). The Competitive Advantage of Nations. London: McMillan, p. 53 f.

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In my paper I shall concentrate on the third approach. In the literature on institutional change

in Switzerland it is widely acknowledged that the impact of the EC/EU on institutional change

was quite strong in some areas, especially in the 1990s, notwithstanding the fact that

Switzerland had rejected the EEA agreement in 1992.5 These studies concentrate on the

process of legislation at the political level. The focus of this paper is on the role of business

associations as intermediaries between business and politics and as agents of institutional

change in the sense of North.6 To what extent did theses associations influence the adaptation

of national legislation to the rules established within the EC/EU? Business associations might

have been interested either in adapting national institutions to European rules and norms in

order to reduce transaction costs, or in sticking to national institutions in order to create

location specific advantages for Swiss firms. What was the role of the associations with

regard to European integration in their own perspective? In what areas did the process of

European integration influence institutional change in Switzerland? Can we distinguish areas

of harmonization and differentiation? Did the business associations themselves become more

European? Did the establishment of common institutions result in making Swiss firms more

similar to the firms within the European Union? What was the impact of other international

organizations (GATT and WTO, OECD, UNO) on institutional change in Switzerland,

compared with the impact of European integration?

In the next section I shall concentrate on the question whether Swiss firms could be

understood as European firms according to the first and second concept. I shall deal with this

topic very briefly. Subsequently, I shall focus on the third concept, namely Europeanization as

a consequence of institutional change. This approach is especially interesting in the case of

Switzerland because it is not a member state of the EU. In this first draft of the paper I shall

deal only with the period from the early 1980s until 1992, the year of the creation of a single

European market and the European Economic Area. I shall concentrate mainly on the annual

reports of four business associations. Internal sources are not accessible for the period

covered. There is the possibility to recur on other published sources, namely the results of

surveys and publications to specific themes. A valuable oral source could be interviews with

key decision-makers within these associations.

5 Schmid Hans, Stefan Graf, Thomas Liebig (2004), Das Ausland und die schweizerische Wirtschaftspolitik seit1945, Bern: Haupt; Fischer Alex (2005), Die Auswirkungen der Internationalisierung/Europäisierung aufSchweizer Entscheidungsprozesse (forthcoming 2005).6 North, D.C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge et al.: CambridgeUniversity Press.

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2. Swiss firms in the European context

Swiss firms in the main industries (textiles, watches, machinery and chemicals) and in some

of the service sectors (banking, insurance, trade, transport, finance) had strong but also highly

volatile relations with the European countries. Swiss firms established trade relationships with

more distant European countries and with countries in other regions of the world, in order to

compensate for the frequent fluctuations of demand of their main trading partners already in

the 19th and even more so during the 20th century. The importance of Western Europe for

exports and imports was high but not increasing during the 20th century. The available data on

FDI and the location of affiliates of the Swiss multinationals confirm the preference of Swiss

firms for the large European countries Germany, France, Great Britain and Italy, an

expansion, which was certainly facilitated by the existence of different cultures within

Switzerland itself. But from the 1930s onwards, the United States was perceived as the most

promising market and gradually became the preferred destination for FDI.

In order to remain competitive, Swiss firms had to distinguish themselves from their

competitors in the larger European countries and occupy market niches. They usually

competed in quality and not in prices and relied on the national reputation for precision and

high quality. Firms in the watch industries relied heavily on „made in Switzerland“, the Swiss

banks on being “located in Switzerland”, but in the other outward oriented industries and

services firms had been able to loosen the link between the qualification of their goods as

being of „Swiss quality“ and the location of the production of these goods. Where the national

origin of products and services was a competitive advantage or required by law, the strategy

of the Swiss firms was to become “multidomestic”. It seems that in the 1990s, the nation-

based distinction was no longer perceived as an advantage, but as a disadvantage.7 The large

MNEs turned to presenting themselves as “Global Players”. At the same time, in the annual

reports separate figures on Switzerland (turnover, employment, investment etc.) disappeared

and were absorbed into “Europe” as one of the broad regional categories beside “America”

and “Asia”.

7 This change in self-representation can be observed in several Swiss MNEs. According to SwissCham, thefederation of the Swiss Chambers of Commerce in foreign countries, the large Firms did not understandthemselves as „Swiss“ but as „multinational“, because of the increasing isolationof Switzerland in Europe. Theattribute „Swiss“ was connected with a negative image. Martina Gisler, die Bedeutung der heutigen SwissChamfür die Förderung der schweizerischen Aussenwirtschaft in den Jahren 1975-1994, Diplomarbeit, UniversitätZürich, Juni 2005.

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Besides these outward oriented branches there have been large sectors of the economy, which

concentrated exclusively on the domestic market. This was the case for firms in the service

sector (for example retail trade) and in the public utilities (railways, telecommunication,

electricity). The state-owned firms were “European” in the sense of being typical for firms of

the same sector in the other European countries. Their activities were limited to the domestic

market because Europe was segmented into national markets dominated by state-owned firms.

It is in this sector that deregulation and privatisation, starting in the 1980s and accelerating in

the 1990s has lead to the evolution of “European firms” in the sense of firms expanding their

activities from the national to the European market. In Switzerland, the process of

deregulation and privatization was delayed, and the fact that the country rejected the EEA-

treaty in 1992 may have been a major cause for this delay. But also in other European

countries the barriers to European integration in the public service sector are still quite strong.

The transformation of the public sector is still at an initial stage, and since it has started earlier

in some and later in other European countries, it has, at first, lead to more divergence within

Europe. The firms are transformed from “European firms” in the sense of the first approach to

“European firms” in according the second approach.

3. Business associations as intermediaries between business and politics in the process of

European integration

Europe has been composed of a large number of large and small countries with different

internal rules and norms, and these differences are still quite remarkable. 8 Swiss firms had to

take into account the different formal and informal national rules, if they wanted to

successfully do business with and in these countries. It seems that up to the 1980s, there was

no pressure from the export branches to adapt internal rules to the rules of other European

countries. The share of any European country in total trade or FDI would hardly have justified

such an endeavour. Further more, the cultural diversity and the federal structure of the country

had led to the evolution of a variety of rules within the country itself.9 Firms were thus used to

cope with different legal and cultural systems both at home and abroad.

8 If we rely on the Ifo Database for Institutional Comparisons in Europe (, institutional divergence is indeed stillquite pronounced among the EC and EFTA-countries: www.cesifo.de/DICE. The indicators measured are, forexample: Codes and Principles of Corporate Governance, Systems of Corporate Governance Protecting Invstors,Regulation of Product Markets, Hiring and Firing Workers.9 The internal “single market”, one of the main objectives of the constitution of 1848, is still far from havingbeen achieved. The “Binnenmarktgesetz” introduced in 1995, had remained largely ineffective. Cantonalspecificities still prevail, limiting the free access of employees and entrepreneurs to jobs and public orders. Thenew “Binnenmarktgesetz” is being discussed in parliament this year.

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In this context, the decision of the EC to establish a single European market was a major and

far-reaching step, because it was not limited to reducing traditional trade barriers, but included

the abolition of technical barriers by establishing common rules, norms and technical or

organizational standards. For Switzerland, the single market project threatened to establish

new trade barriers, leading to a competitive disadvantage for their export-oriented firms in

comparison with the firms within the EC. But participating in the process of integration had to

be balanced against possible disadvantages in non-European markets. For firms focusing on

the domestic market institutional differences protected the internal market and their abolition

enhanced foreign competition. In the internationally oriented banking sector, national

institutional specificities were perceived as a major location-specific advantage (bank secret,

tax laws). The problem for these interest groups was how to preserve such advantages in the

course of European institutional integration. Further more, other international organisations

(OECD, GATT, UNO) were influencing institutional change worldwide.

I shall concentrate on the following associations: the federation of Swiss trade and industry

(SHIV), comprising a broad range of mainly outward oriented branches and organisations,

two associations of the highly export-oriented branches machines (VSM) and chemicals

(SGCI) and the federation of the inward oriented branches (SGV).

3.1 Europeanization in the forefront of the single European market and the EEA

- SHIV (Schweizerischer Handels- und Industrieverein))

Already at the beginning of the 1980s, the SHIV was associated with several international

organisations: the “Conseil des federations industrielles d’Europe (CIFE)”, the “Business and

Industry Advisory Committee to OECD (BIAC)” and the “Internationale Handelskammer

(IHK)”. Throughout the period there were yearly meetings with the corresponding federations

of Austria, Denmark, the German Republic, the Netherlands, Belgium, France and Great

Britain.10 In the course of the 1980s, participation in the “Union der Industrien der

Europäischen Gemeinschaft (UNICE)” became more and more important.11 The SHIV

became an associated member in 1980.

10 SHIV, Annual Report 1981/82, p. 19.11 The SHIV was a member of UNICE. In the Annual Report 1985/86, p. 16, it is mentioned that the SHIVparticipated in various committees. These activities were important, because the decisions of the EC had animpact on Switzerland, whether directly or indirectly.

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On the national level, the SHIV participated in practically all government commissions

dealing with economic policies and legal reforms. It represented the economic interests of its

members, and these interests were identified through surveys among its members or at

internal meetings and conferences.12 In the annual reports, the federation conveys a broad

overview on its main activities, its aims and expectations. It is therefore possible to assert

when, to what extent and in what fields the process of European integration had a major

impact on the policies and strategies pursued by the SHIV.

Until 1986, the impact of European integration on the activities of the SHIV remained rather

marginal and limited to specific topics: In 1980/81 the EC-guideline for a uniform European

product liability law was mentioned as much more important than the convention of the

Council of Europe on the same topic, because once accepted, the EC member-states will be

forced to adopt it. For firms in non-member states with different rules there would be a

competitive disadvantage.13 But in 1984/85 this topic was still controversial and

harmonisation within the EC had not been achieved.14 Under the heading “Relationship

Switzerland / European Community” the main themes were minor adaptations, clarifications

or revisions of the free trade agreement between EC and EFTA concluded in 1972. Recurrent

themes were the endeavour to simplify the rules of origin of the free trade agreements, the

adjustment of trademark rights in the member-states and the question how the non-member

states could participate in these simplifications.15 Quite generally, reducing technical trade

barriers was addressed every year with regard to changing topics.

One major concern was the tendency, in a period marked by a worldwide recession and high

unemployment rates in the EC-countries, to distinguish between the European free trade area

according to the agreements of 1972 and the EC. The plans of the EC-Commission to create a

single internal market strengthened these fears. A possible counter measure was an agreement

between the EFTA and the EC, in order to eliminate the resulting discrimination.16 At the

same time, the SHIV did not want to have its hands tied to a regional system. The degree of

economic integration with the EC-area was high, but about 40% of total exports went to non-

European markets and direct investments in overseas countries were considerable. Therefore,

12 In 1980/81 (1990) the members of the SHIV are: 18 (19) cantonal chambers of commerce, 111 (100) branchassociation and 7 (6) other sections.13 The EC-Richtlinie follows develpments in the USA. SHIV, Annual Report 1980/81, p. 39 ff.14 SHIV, Annual Report 1984/85, p. 144 f.15 SHIV, Annual Report 1982/83, p. 75 ff.; 1983/84 p. 74 f.16 SHIV, Annual Report 1982/83, p. 59 ff.

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according to the SHIV, Switzerland had to take an active part in the GATT-negotiations,

which had started in November 1982. But having access to the EC-market remained

important. In April 1984 an initiative was started to enhance the trade of goods between the

EFTA- and the EC-countries by reducing technical barriers to trade. The topics were: border

formalities, customs documents, rules of origin and the participation of EFTA-countries in the

EC programs for industrial research. But no quick progress was expected, because of the

opposition of some of the EC-countries.17 In effect, the EC was absorbed by other tasks,

namely to establish the single European market. Cooperation with the EFTA-countries was of

secondary importance.18 In 1985, EFTA celebrated its 25th anniversary. The SHIV was

convinced that the organization would continue to be useful, even if its objectives had been

achieved and two more countries, Portugal and Spain, had joined the EC.19 With the economic

upswing felt since 1983 the apprehension of a new wave of protectionism within the EC

disappeared, but it was feared that with the single European market new borders within

Europe were created.20 For the EFTA-countries the relations with the EC became time

absorbing to the extent that the relations among themselves and to other countries outside the

EC-area were largely neglected.21

An area of harmonization showing little progress during the 1980s was corporation law.

Especially the proposition of an EC-guideline on the rights of employees in transnational

companies was highly controversial. The SHIV cooperated with UNICE in opposing

supranational rules and insisting on the principle of subsidiarity.22 Several EC-guidelines dealt

with corporation law and group law. The SHIV was actively involved in the discussions about

these guidelines within UNICE, but no reference was made in the sections on the revision of

the Swiss corporation law going on since the early 1970s.23 This was probably due to the fact

that these EC-guidelines were highly controversial among the EC-countries themselves.24 The

introduction of a unified customs document for the EC also for the EFTA-countries was

accepted – albeit with some reluctance – also for Switzerland. An inquiry among the members

of the SHIV had shown, that Switzerland could not risk being the sole country not adopting

17 SHIV, Annual Report 1984/85, p. 61 ff. According to the SHIV, this proposition was made by Switzerland.18 SHIV, Annual Report 1985/86, p. 53.19 SHIV, Annual Report 1984/85, p. 64; Annual Report 1985/86 p. 52 ff.20 SHIV, Annual Report 19986/87, p. 59 f.21 SHIV, Annual Report 1986/87, p. 65.22 SHIV, Annual Report 1982/83, p. ...;23 SHIV, Annual Report 1982/83, p. 83 ff.; Annual Report 1983/84, p. 86 ff.24 SHIV, Annual Report 1983/84, p. 89 ff.; Annual Report 1985/86, p. 69 ff.; Annual Report 1986/87, p. 82 f.

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this document, but for the SHIV this new mode of harmonization considerable problems with

regard to internal adaptation.25

The “white book” containing the measures undertaken by the EC in order to complete the

single European market was widely discussed by the Federal authorities in Switzerland and

within the SHIV.26 Besides the negotiations between EFTA and EC there were ongoing

bilateral negotiations between the EC and Switzerland throughout the period, the topics

usually remained on the agendas for years without leading to substantial solutions. Other

international organisations (GATT, OECD, UNO) also acted as rule-setters with regard to

international trade or the behaviour of transnational companies, but in contrast with the EC-

guidelines these organisations produced “soft rules”, which could be applied and respected

voluntarily.27 That was for example the case for the code on cartels of the United Nations.28

Nonetheless, the SHIV was continuously taking an active part in the different rounds of

multilateral negotiations, but its engagements remained strictly “economic”.29 With regard to

the referendum on Switzerland joining the United Nations, the SHIV was neutral because in

its perspective it was a political decision.30 Environmental policies and consumer policies as

well as the revision of the rules concerning public sector activities seem to have been the

domain of the OECD or the UNO up to the middle of the 1980s.31 On this level, the

guidelines had no binding character but took the form of recommendations or were limited to

identifying problems and suggesting solutions.

From most major topics of economic policy dealt with during the early 1980s – competition

policy, the revision of the law on cartels and of the sales tax, structural and regional policy or

the energy business - the EC as rule-setter was completely absent. With regard to cartel law

reform, the absence of references to EC-rules is rather surprising. Obviously, cartel law

belonged to the internal policy domain, and the main particularities of the Swiss cartel law

25 SHIV, Annual Report 1986/87, p. 61 f.26 SHIV, Annual Report 1986/87, p. 59 ff.27 SHIV, Annual Report 1980/81, p. 66 ff.; Annual Report 1982/83, p. 85 ff.; Annual Report 1983/84, p. 79 ff.;Annual Report 1984/85 p. 70 ff.28 SHIV, Annual Report 1980/81, p. 109.29 SHIV, Annual Report 1985/86, p. 60 f.30 SHIV, Annual Report 1985/86, p. 83 ff. Two inquiries in all sections of the SHIV in 1984 and 1985 had showna majority of opponents und sceptics, a small group of moderate supporters, some sections without a clearmajority and only one section that declared openly and clearly that it wanted Switzerland to join the UNO.31 SHIV, Annual Report 1984/85, p. 101 ff. and p. 155.

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were retained.32 Even the first steps towards deregulating the telecommunication sector in

1984 were reported without making any reference to developments on the European level.33

At this time, the telecommunication sector of Switzerland and other European countries was

perceived as being locked into national monopolies. Due to the new technologies facilitating

the transnational transfer of information this national order had become inefficient and the

state monopolies threatened free communication for the users of these networks. Quite

generally, deregulation and privatization and, concomitantly, reducing government spending

were delineated as internal policy matters.34

A new field of attention, R&D and innovation, came up in 1982 and was directly related to

the European Commission’s program for a new European strategy for Science and technology

for the period 1984-87. The situation of Switzerland with regard to the high share of private

expenditures of R&E was perceived as special in the European context and possibly leading

to a backlog. The SHIV was not impressed and very sceptical with regard to the role of the

state in fostering R&D.35 The topic became more pressing a few years later, when

international competition in R&D became more pronounced and the fact that private Swiss

R&D expenditures were rising more quickly abroad than at home became a matter of concern

on the political level. Having access to international and especially EC R&D-programs was

then perceived as vital for Swiss firms. The strictly liberal view upheld by the SHIV about the

limited role of the state in supporting R&D and the forms and intensity of international

cooperation had to be somewhat relieved, if Switzerland wanted to participate in these

programs. At the same time, internal means for fostering R&D were increased. 36

From 1987 onwards, the creation of the single European market and its consequences for the

Swiss economy were the dominant theme of the annual reports of the SHIV. The state of the

economy with regard to deregulation and privatization of state-owned enterprises was

compared with what had been done in the other European countries. Switzerland was lagging

32 SHIV, Annual Report 1985/86, p. 99: „Das Kartellgesetz ist ein taugliches Instrument für die schweizerischeWettbewerbspolitik ... Es bedeutet keinen Bruch mit der bisherigen Praxis, bringt aber doch in verschiedenenPunkten eine Klärung.“33 SHIV, Annual Report 1984/85, p. 42 ff.34 SHIV, Annual Report 1985/86, p.12, Forword of the president: „Erwartet wird eine Verbesserung nicht vonaufwendigen Gipfelkonferenzen, sondern indem durch eine solide, den eigenen Möglichkeiten angepasstemarktwirtschaftliche Politik für Ordnung im eigenen Haus gesorgt wird.“35 SHIV, Annual Report 1982/83, p. 39 ff., with referenct to the „4. Erhebung des Vororts über F&E in derschweizerischen Privatwirtschaft“. Expenditures for R&D were to three quarters financed by the private sectorand only one quarter by the state.36 SHIV, Annual Report 1985/86, p. 32 f. and p. 108 f.; Annual Report 1986/87, p. 117 ff.; Annual Report1987/88, p. 29.

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behind and losing competitive advantages.37 The service sector was identified as a new

important area of liberalization, because the EC had assigned high priority to this topic in

completing the single European market.38 The Uruguay-Round of the GATT had taken up this

topic too in 1986, but these negotiations had not produced concrete results and were focused

on establishing general principles. The program of the EC embraced all major service sectors,

(namely financial services, transport and traffic systems, telecommunication, capital

transactions). It included tax regulations, provisions for the free movement of labour

(including the acceptance of professional qualifications) as well as the liberalization of public

orders. How should Switzerland react to all these challenges?39

Little room of manoeuvre was perceived with regard to the banking sector (banking secret and

domestic tax laws) and in the transport sector (internal rules for the “Alpentransit”). In the

field of telecommunication it seemed obvious that Switzerland had to be prepared to

cooperate with the EC, and the same was the case for energy policy. Even agrarian policy was

no longer a purely internal affair. The agrarian sector was coming under pressure both from

the Uruguay-round and the single European market.40 Still, the revision of corporation law

did not make any reference to what was going on in the EC in this respect.41

The immediate effect of the foreseeable creation of a single European market for services

within the EC was increased uncertainty. Switzerland seemed ill prepared for this type of

market integration. In most fields, internal rules, policies and attitudes clashed with those

dominating within the EC. For the SHIV it was high time that what was going on in Europe

became an integral part of the internal discussion on economic policies.42 At the same time,

the SHIV feared that the important GATT-negotiations were getting out of sight because

everybody was engaged with the “Binnenmarkt-Termin 1992”.43 According to the SHIV, the

Uruguay-round will determine the rules valid for international trade in the years to come,

whether they are a success or not. These negotiations should therefore not be neglected. And

it was important for Swiss firms to remain competitive on markets outside the EC, because

37 SHIV, Annual Report 1987/88, p. 7, Foreword of the president.38 SHIV, Annual Report 1987/88, p. 36 ff.39 SHIV, Annual Report 1987/88, p. 39-47.40 SHIV, Annual Report 1987/88, p. 101 ff.41 SHIV, Annual Report 1987/88, p. 125 ff.42 SHIV, Annual Report 1987/88, p. 46; Annual Report 1990, p. 8 f.43 SHIV, Annual Report 1987/88, p. 62.

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over one third of Swiss exports were going to overseas markets and growth rates were higher

in the US and in Asia than in the European countries.44

Autonomous measures strengthening the competitiveness of the Swiss economy, reducing the

potential for conflicts with the EC and facilitating further integration was one way for coping

with the changed conditions within Europe.45 One concrete proposition was to replace the

existing sales tax with the value added tax, in analogy to the EC, another was to find an

acceptable solution for the “Alpentransit”.46 The other promising vision for overcoming the

threatening divide within Europe was the offer of the EC-commission for closer cooperation

with the EFTA countries by expanding the “four freedoms” of the single market (for goods,

services, persons and capital) to the EFTA-counties.47 This proposal was the main topic of the

EFTA-Summit-Meeting in March 1989. Discussions were taken up immediately and soon the

different attitudes of the EFTA countries emerged. Sweden and Norway aimed at full

participation within the single European market. Austria intended to apply for EC-

membership. Switzerland was also in favour of an extensive cooperation with its neighbours,

but had to respect the constraints imposed by the internal political situations.48 On the other

hand, Switzerland had to avoid being left asides. The SHIV, therefore, supported the plan to

create a European Economic Area (EEA) between EC and EFTA and developed some ideas

how such an EEA would have to be conceived in order the obtain the support form the large

majority of firms in the different branches of the Swiss economy.49

All in all, at the end of the 1980s, the different programs for European integration within the

EC and between the EC and EFTA, together with the overthrow in Eastern Europe, the

reforms planned for the home market and the slowly but clearly progressing Uruguay-Round

within the GATT made the international economic context the SHIV tried to cope with

extremely complex.50 And the process of integration within the EC continued at a very fast

44 SHIV, Annual Report 1988/89, p. 7 and 35.45 Parallel to adapting to European integratsion, it was also the home country that a single market had to berealised. SHIV, Annual Report 1989/90, p. 29.46 SHIV, Annual Report 1988/89, p. 29 and 39 f.47 SHIV, Annual Report 1988/89, p. 48, refers to the discourse of the President of the EC-commission J. Delorson the 17th of January 1989.48 SHIV, Annual Report 1988/89, p. 52 f.49 SHIV, Annual Report 1989/90, p. 25 ff.50 One main area of interest were the negotiations on liberalizations in the service sector (GATS). A surveyamong the firms of the service sector showed that those firms concentrated mainly on Europe und less on NorthAmerica and the Far East. The main obstacles in Europe were sector specific laws, acceptance of professionalcertificates and employment regulations. SHIV, Annual Report 1989/90, p. 56 ff. and 64 ff. According to theSHIV, Switzerland invested much time and energy in these negotiations and their representatives were alsoinvolved.

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pace: Already in the 1990s there were conferences on the creation of a monetary union and a

political union. Further more, the EC became more attractive for the EFTA countries: Austria

had applied for membership in 1989 and Sweden planned to do so in 1991. Even countries in

middle and Eastern Europe aimed at participating in the EC. 51 For the SHIV, an organisation

used to the slow pace of institutional change in Switzerland (where every modification has to

go through various rounds of consultations before it is presented in parliament, and after

having been accepted in parliament there is still the possibility of a referendum) the pace of

European integration must have been breath-taking.

The creation of the EEA clearly dominated the agenda up to 1992. The tendency was to shift

pending requests (for example simplifying the rules of origin) into the EEA-package.52 The

increasing importance of the EC was also reflected in the decision taken in 1988 to establish a

permanent office in Brussels. At that time, the SHIV was the only member of the UNICE

without a permanent representation in Brussels. The new permanent office was conceived as a

major and direct source of information on EC-matters for Swiss firms, especially the SMEs.53

With regard to R&D the readiness to cooperate with the EC clearly increased.54 In further

areas, till then untouched by the developments within the EC, the influence of European

integration became stronger: For the first time the commission for the revision of the Swiss

Corporation Law noticed a contradiction with EC notions and took it into account; the

enactment of the EC guideline on product liability immediately provoked corresponding

activities of the EFTA-states and the revision of the Swiss liability law. 55 Also with regard to

the policy on foreigners, the creation of the EEA gave rise to rules that complied with

Europe.56 With regard to the planned structural reform of telecommunication services the

SHIV recommended to wait until the “Greenbook” of the EC was available.57

51 SHIV, Annual Report 1990, p. 35 f.52 SHIV, Annual Report 1989/90, p. 5953 SHIV, Annual Report 1988/89, p. 50; Annual Report 1989/90, p. 11 f.Several publications of the SHIV arededicated to topics related to European integration and international competitiveness of the Swiss economy: DieSchweizer Wirtschaft vor den Herausforderungen des EG-Binnenmarktes 1992. Eine praxisorientierteLageanalyse, September 1988; Pierre Bourgeaud: Prüfsteine der schweizerischen Wirtschaftspolitik; Energie undeuropäische Integration, Schriftenreihe des Vororts, Nr. 51, Oktober 1988; Stephan Schmidheiny: Die Schweizim Wettbewerb der Nationen, Schriftenreihe des Vororts, Nr. 52, Dezember 1989; Euro-Brevier für kleine undmittlere Unternehmen. Standortbestimmung, Strategien und Anpassungsmassnahmen, 1990; Die schweizerischeWirtschaft und der Europäische Wirtschaftsraum. Stand und Perspektiven, August 1990.54 SHIV,, Annual Report, p. 94.55 SHIV, Annual Report 1988/89, p. 128 ff. and 137.56 SHIV, Annual Report 1989/90, p. 114 ff.; Annual Report 1990, p. 198 ff.57 SHIV, Annual Report 1990, p. 91 f.

14

In the view of the SHIV, the EEA was basically a good idea, but it also raised a major

problem: the EFTA countries had to adopt all the relevant EC single market laws (the “Acquis

communautaires”) into their national legal order. Hopes to obtain the same rights as the EC-

countries in the decision-making process or some possibility to deviate from these rules were

quickly shattered. The position of the EC was defined as: total autonomy of the EC and total

homogeneity of the EEA, not only for the current state of the law but also for any future EC-

law. Consequently, in the current and future areas regulated by the EC the EFTA-countries

were to lose their autonomy completely.58 Under these circumstances, joining the EC was an

easy way out of this uncomfortable position. Consequently, the EEA was increasingly

perceived as a provisional solution up to joining the EC.59 For the SHIV, joining the EC was

still no option, because there was no majority within the Swiss population and the Swiss

cantons for such a step. The other alternative, “splendid isolation”, was an illusionary

concept. The only realistic option for the future was an EEA-treaty that was acceptable for

both sides.60 In June 1990 negotiations were taken up within five groups on a high

administrative level. The SHIV had representatives in several of these groups. Negotiations

were reported as difficult, for institutional and legal reasons and for the fact, that the EC had

linked the question of through traffic with the bilateral agreements.61 After negotiations were

closed in October 1991, two members of the Swiss Federal Council declared, that the final

objective for Switzerland was to join the EC and that the EEA-agreement was a useful step on

the way to complete integration.62 On the basis of a broad internal survey among its members

the SHIV approved the EEA-agreement and the objective to join the EC mentioned above was

commented on favourably.63 But according to the SHIV, such a step should be made after the

EEA-treaty had been accepted by the Swiss people and the Swiss cantons and after having

integrated the EC-law (EUROLEX) into Swiss law. Even if the legal adaptations were limited

to the strictly necessary, the process was highly unpredictable within the Swiss institutional

framework, where a referendum on any part of the agreement or a “Volksinitiative” that was

not compatible with the EEA could create major problems both before and after the

acceptance of the EEA.

58 SHIV, Annual Report 1990, p. 36 ff.59 Austria has applied for membership in the EC in summer 1989, Sweden in July 1991, anf Finnland in March1992. SHIV, Annual Report 1991, p. 31 f.60 SHIV, Annual Report 1990, p. 40.61 SHIV, Annual Report 1990, p. 57: „Ohne Transitabkommen gibt es keinen Europäsichen Wirtschaftsraum,sagt die EG.“62 SHIV, Annual Report 1991, p. 29.63 SHIV, Annual Report 1991, p. 30 f. and 53. According to the Members of the SHIV, the advantages largelycompensated the disadvantages. The EEA is a useful step in order to get prepared fort joining the EC later on.

15

To some extent, bilateral negotiations between Switzerland and the EC continued.64 And in

some areas the influence of EC-rules was still limited or even firmly rejected. This was for

example the case for corporation law, especially with regard to the participation of

employees.65 Rather surprisingly, a similar attitude prevailed with regard to the law on cartels.

According to the SHIV, the ban on cartels of EC competition law would only take effect for

the transnational exchange of goods and services, for purely internal agreements the Swiss

cartel law allowing cartels with certain restrictions remained valid.66 The extension of the

activities of the EC-Commission from the EC-single market program to the social and labour

policies was observed with apprehension, but these topics were not part of the EEA yet. The

SHIV exerted its influence within the UNICE, where the representatives of European business

united forces against the attempts to shift this field from the national to the EC-level.67

External communication became more important with the approaching conclusion of the EEA

and the pending popular ballot on this wide-reaching institutional change. Although the SHIV

ascribed high importance to convincing the people of the advantages of the EEA, the broader

impact of the SHIV was, of course, limited. Its arguments were enhanced or weakened by the

activities of other interest groups. 68

- “Verein Schweizerischer Maschinen-Industrieller” (VSM)69

From 1988 onwards the creation of the EC single market, its consequences for the Swiss firms

in the machine industry and the advantages of the EEA-agreement was the main theme dealt

with in the annual reports. The main objective of the VSM was to adapt Swiss technical rules

and norms to the harmonized technical rule and Norms valid within the EC in order to achieve

EC compatibility (“Europaverträglichkeit”) of its products. The attitude of the VSM was

clear: As long as the rules in Switzerland differed from those in the EC, the Swiss producer

had a disadvantage compared to his competitor in the EC. Consequently, such differences had

64 SHIV, Annual Report 1989/90, p. 60 f., Zollabkommen Schweiz-EG; Annual Report 1990, p. 56.65 SHIV, Annual Report 1989/90, p. 138: „Entschieden lehnt der Vorort Versuche ab, auf dem Umweg über dieEWR-Verhandlungen Postulate in die Schweiz zu „importieren“, die bei uns bisher mit guten Gründen klarabgelehnt wurden. Dazu gehören beispielsweise die Mitbestimmung der Arbeitnehmer oder ein mit unseremSystem nicht vereinbarer Kündigungsschutz. SHIV, Annual Report 1990, p. 128 ff.; 1991, p. 148 f.66 SHIV, Annual Report 1991, p. 79 ff.67 SHIV, Annual Report 1990, p. 15.68 SHIV, Annual Report 1990, p. 13; Annual Report 1991, p. 12.69 The VSM was founded in 1883. All firms located in Switzerland, with at least 20 employees and active in themachine-, electric- or metal-industry can become members of the VSM. In 1989 the firms producing good orservices for members of the association were included. VSM, Annual Report 1989, p. 4. The reason fort thismodification was to include firms, which had been desinvested. In 1983 the associations had 484 member firmswith about 200’000 employee, in 1993 the number of firms had increased to 629 with 150’000 employees.Obviously, most firms were of small or medium size.

16

to be eliminated or avoided.70 A survey among the VSM-members in 1989 resulted in a

broadly based approval to adjusting Swiss technical norms to those valid for the EC.71

European integration became more and more important, and in 1990, the VSM formed a new

working group “Europe”. The realisation of the EC single marked proceeded at a very fast

pace and the EEA-negotiations were initiated in 1989. The fact that some fields, which had

been previously excluded (namely energy and water supply, traffic systems and

telecommunication), were included again was welcomed. An internal survey revealed that

more than 86% of the firms agreed with the position of the VSM to open those markets for the

whole EEA-area.72 The results of another survey on the question whether Switzerland should

accept the EEA-agreement were also clear-cut: 90% of the firms approved joining the EEA;

10% favoured direct membership in the EC, nobody voted to go it alone.73

The VSM and its numerous subgroups were all members of the respective European

associations. Being associated to the European federation was important, because at that level

all information concerning the EC was available quickly and reliably. For the VSM, the main

European connection was ORGALIME (Organisme de Liaison des Industries Métalliques

Européennes).74 The planned extension of its activities was approved and the VSM

participated actively in the various working groups and committees. While all the subgroups

(except one) were linked with European associations of the same branches, only very few

participated also in world-wide associations. 75 The annual reports of the VSM contain little

information on the activities of these groups, but it seems that their main objective during the

late 1980s and early 1990s was the harmonization of Swiss regulations and norms with

European regulations and norms in order to avoid competitive disadvantages for Swiss firms

on the EC-market.

Special commissions of the VSM were continuously observing the revisions of legal rules in

Switzerland, in the European context and on the international level. These commissions

intervened on the national level by commenting on drafts for new rules and indicating

possible problems if the proposed regulation was not harmonised with the respective EC-

70 VSM, Annual Report 1988, p. 10; Annual Report 1989, p. 9 f.:71 VSM, Annual Report 1989, p. 11.72 VSM, Annual Report 1990, p. 9.73 VSM, Annual Report 1991, p. 8.74 VSM, Annual Report 1988, p. 18; Annual Report 1990, 1475 The exception was the group „Käsereianlagebau”. In the late 1980s and 1990s, there are about a dozen*subgroups for different branches within the machine industry (from the traditional group of texile machines orof machine tools to the new groups of communication technology, environmental technology and space(Raumfahrt) technology, VSM, Annual Report 1988-1991.

17

guidelines. Some members of the VSM were active in the commission on intellectual property

of the SHIV and in working groups of UNICE.76 The main topics discussed with regard to the

EC during the late 1980s and early 1990s were: product liability, the rules for certification and

examination, patent law, trademark protection law and copy right. In the field of technical

harmonization great importance was attached to the Greenbook on the development of

European norms for the realisation of the single European market.77

The GATT-negotiations were also important, but the regulations of the GATT-Kodex had

largely remained ineffective. The plans of the EC with regard to the creation of a of the single

internal market had a very different meaning.78 Given the hectic pace prevailing in the EC, it

was even feared that the successful conclusion of the Uruguay round was put into question

because of the high priority attributed to the process of European integration. This was a

matter of concern because 35% of exports of the machine industry were going to other world

regions. For the Swiss machine industry an open world trade system was almost as important

as the process of European integration.79

The member firms were continuously kept informed in “Europa-Seminarien” (1988, p. 11)

and Workshops for entrepreneurs (1989 p. 9). Quite generally, European integration had high

priority in the public relations activities of the association.80 The main areas of interest of the

Swiss machine industry were: liberalization of the telecommunication sector and participating

in EC research projects.81 With regard to research policies the attitude of the VSM was less

ambiguous than the position of the SHIV. The VSM claimed full participation of Switzerland

in the EC-programs and, with regard to financial support, equal treatment as the other EC and

EFTA countries.82 This aim was achieved in 1991.83 Other major developments commented

on in the annual reports of the VSM was the breakdown of the Comecon trade system, which

resulted in a substantial decline of trade flows to those markets.84

- Schweizerische Gesellschaft für Chemische Industrie (SGCI)

76 VSM, Annual Report 1989, p. 53 ff.77 VSM, Annual Report 1990, p. 1078 VSM, Annual Report 1988, p. 1179 VSM, Annual Report 1988, p. 19; Annual Report 1989, p. 1180 VSM, Annual Report 1988, p. 11; Annual Report 1989, p. 9; Annual Report 1990, p. 7; Annual Report 1991,p. 24.81 VSM, Annual Report 1988, p. 12 f., Annual Report 1989, p. 11.82 VSM, Annual Report 1989, p. 11; Annual Report 1990, p. 1383 VSM, Annual Report 1991, p. 11 f.84 VSM, Annual Report 1990, p. 16

18

The chemical-pharmaceutical industry has been one of the most globally oriented Swiss

industries. The European market is important, especially for imports, but since the late 1970s

the US are the most attractive market because of higher incomes and growth rates and a less

regulated health sector, a consequence of the different role of the state in Europe and the US.

In analogy to the other major export industries, there have been a few large MNEs, but most

firms were SMEs.85

The SGCI was founded in 1882. In the year of its 100 anniversary, the industry consisted of

350 firms and employed 68'000 persons in Switzerland. About 250 firms were members of

the SGCI. The association’s links with other national and international business associations

and governmental delegations have been quite extensive and mirror the great importance

attributed to this industry for the Swiss economy.86 In national policy matters, the SGCI

usually intervened indirectly as a member of the SHIV. Links with the European Chemical

Association had been established right from its foundation in 1959. The international network

included about a dozen international organization, of which about two thirds were European

associations.

Due to its global orientation, the main interest with regard to international trade in the early

1980s was a liberal world trade system without protectionist policies and trade barriers. These

objectives were pursued on the level of the GATT, but progress at this level was slow and the

results of the various rounds of negotiations disappointing: the main problems caused by the

spread of bilateralism were identified, but they remained unresolved.

Up to the middle of the 1980s, the EC as rule-setter remained marginal, limited to question of

origin and customs tariff between EC and EFTA. The basis for negotiations was the European

free trade agreement concluded in 1972. With regard to such questions, cooperation within

CEFIC (European Chemical Industry Council) proved highly satisfactory.87 At first, plans of

the EC to create a single European market were a matter of preoccupation, because the SGCI

feared the formation of trade blocks. It was therefore important to accompany this

85 Müller Margrit (2006). The Export-Dependence of the Swiss Chemical Industry and the Internationalization ofSwiss Chemical Firms (1950-2000), in: L. Galambos, T. Hikono, V. Zamagni (eds.), The global chemicalindustry in the age of the pretrochemical revolution, CUP.86 The SGCI had delegates in about 30 federal commissions and committees, in 22 national organisations and inbetween a dozen and 15 international organization, of which about two thirds were European organisations. The19 subsections had also links with mainly European associations. SGCI, Annual Reports, 1981 to 1986.87 SGCI, Annual Report 1985, p. 10.

19

development. In this regard, the European branch association had an important role.88 In the

later 1980s, the section on foreign trade concentrated mainly on the changing relationship

between EC and EFTA. The position of Switzerland was weakened, because the EFTA was

losing members and often the remaining member states did not support the requests of

Switzerland. These developments may also have weakened the position of Switzerland in the

European associations. The question was how a marginalisation of Switzerland could be

avoided. In this context, the SGCI favoured approaching the EC by the means of bilateral

agreements and in any case to strive for parallelism of the law setting process in the EC-states

and in Switzerland. Joining the EC was out of question “for well-known reasons”.89

Other areas of concern, namely health and environmental protection as well as transport of

dangerous goods were dealt with either in the national context or on the international level

(UNO, WHO, UNEC, FAO, GATT; OECD). The influence of the EC in matters of traffic and

transport was felt only in the early 1990s. The special problems related to trade with

pharmaceuticals, namely the increasing intervention of the state on price-setting policies, was

not perceived as a specific European problem. Similar tendencies were present in countries of

other world regions. These tendencies were strongest in some important European countries,

but it was the result of national policies. This changed with the creation of the single

European market and the EEA. Being a member association of the EFPHIA, but also of the

world association IFMPA was becoming more important.

The chemical-pharmaceutical industry was clearly the leader with regard to R&D

expenditures in Switzerland. Not surprisingly, the other main interests were the means to

protect trademarks and patents. Also in this respect, the influence of the EC was absent in the

early 1980s. These topics were dealt with either on the national level or within international

organizations (OECD, UNCTAD, GATT). In the case of patent protection, the national rules

became more efficient, but also less important because Swiss firms rarely used the national

channels for patent protection. The EC played an active role with regard to product liability

and consumer protection, strongly influenced by development in the US. In the late 1980s and

1990s, developments in the EC were perceived as constraints for national law-setting

processes also with regard to the law on trademarks and patent law.90 Quite generally, new

legislation in the national context was approved if the developments in the EC were taken into

88 SGCI, Annual Report 1984, p. 11.89 SGCI, Annual Report 1986, p. 10.90 SGCI, Annual Report 1988, p. 27 and 1991, p. 28.

20

account; the process of legislation was suspended, if the corresponding process within the EC

was uncertain.

By 1988, the attitude of the SGCI with regard to the creation of a single European market had

clearly become more positive. The SGCI campaigned for the “Europafähigkeit” of the

chemical industry in Switzerland. Renouncing on “customised” Swiss guidelines for

environmental protection was one way to demonstrate solidarity with Europe and the positive

attitude of the Swiss chemical industry towards the EC single market. The official

acknowledgment of the concept of “Europafähigkeit” understood as enhancing the

competitiveness of Swiss firms, on the one hand, and establishing legal compatibility with EC

rules, on the other hand, was highly welcomed.91 The objective of the SGCI was to avoid

disparities between EC-guidelines and Swiss regulations. Three years later, the position of the

SGCI was clearly pro-European. In its view, the EEA was a good basis for a temporary

transitional solution, but in the long term, only full membership in the EC was the adequate

form of relationship.92* With regard to the EEA, the SGCI had regular contacts to the Swiss

delegations negotiating the agreement. In 1991, a slight but important change can be noticed.

Then, the EEA was described as an unbalanced agreement, inadequate as self-contained und

durable instrument of integration. Consequently, the SGCI would approve if, subsequently,

Switzerland joined the EC. The association suggested that the federal government should

deposit an application for membership in the EU. The SGCI was satisfied, that the federal

government had adopted the attitude of the SGCI. Under these circumstances, the committee

of the SGCI agreed to join the EEA.93

Throughout the late 1980s and early 1990ss, the SGCI continued to support all endeavours for

expanding and strengthening the liberal world trade system. The necessary condition was the

successful conclusion of the current Uruguay round of the GATT.

- Schweizerischer Gewerbeverband (SGV)

91 SGCI, Annual Report 1988, p. 5 and 8.92* „Die SGCI ist überzeugt, dass die Wahrung der wirtschaftlichen Attraktivität unseres Landes die Oeffnunggegenüber der EG voraussetzt. Wir betrachten dabei den EWR als gute Grundlage für eine befristeteUebergangslösung. Längerfristig kann nur die Mitgliedschaft in der EG der Schweiz eine gleichwertigeMitsprache bei der Gestaltung der europäischen und damit auch der eigenen Zukunft gewähren.“93 SGCI, Annual Report 1991, p. 9.

21

The SGV is the federation of the economic and professional organisations of the domestic

branches of the Swiss economy.94 Consequently, domestic topics dominated even in the late

1980s and early 1990s, when European integration became a major theme even for this

organisation. The SGV had its representatives in a large number of federal commissions and

organisations of tertiary education. There have been only two institutionalised links with

international organisation: the “Conférence internationale du travail”and the “Union

internationale de l’artisanat et des petites et moyennes enterprise” (Internationale

Gewerbeunion, IGU).95 The SGV was not a member organisation of the SHIV, but often

cooperated with the SHIV on specific topics.

The annual reports contain little information on the activities of the SGV and its subgroups.

Up to 1989, developments regarding EC, EFTA and EEA are mentioned very briefly. In the

view of the SGV, those topics concerned first of all the export sector of the economy. Even if

it was acknowledged that the creation of a single European market was important also for the

domestic firms, these effects were perceived as rather limited. The SGV adopted a defensive

attitude and focused on those areas and rules, which should be kept untouched from

developments in the EC.96 The proposal to adapt Swiss law on product liability to the EC-

guideline, for example, was plainly rejected.97 The main problem related with the single

European market was the „Saisonnierstatut“ für temporary foreign labour, which was not

compatible with the EC principles of the four liberties. The SGV campaigned to preserve the

„Saisonnierstatut“, but by 1991 it became clear that this was not possible.98

Only in the 1990s, the EEA and EC were acknowledged as main themes of economic policy

in Switzerland and commented on more extensively. The impression is that the SGV was

hardly able to keep pace with the rapid developments on the international level.99The member

firms asked for more information with regard to European integration, and the SGV

complained that the information policy of the Federal Council was not satisfactory. The main

94 On 31st December 1991, the members are listed as follows: 25 cantonal „Gewerbeverbände“, 197 professionalorganisations, 43 Selbsthilfeorganisationen and 5 Anstalten und Institute. SGV, Annual Report, 1991, p. 7.95 In 1991, the SGVC had ist delegates in 86 domestic commissions and interest groups. SGV, Annual Report1991, 65 f. The business location was in Switzerland. In 1990 it was transferred from Bern to Lausanne.96 SGV, Annual Report 1989, p. 25 ff. These areas were: the agrarian sector, road traffic and the rules fort rucks,cartel law, and foreign labour policy. of the öffentliches Einkaufs- und Subventionswesen according to the EC-guidelines is quite impossible for the SGV.97 SGV, Annual Report 1989, p 63: „Die Stellungnahme (der Arbeitsgruppe des SGV) geht grundsätzlich davonaus, dass eine Uebernahme der EG-Haftpflichtrichtlininen nicht möglich ist und dass für eine schweizerischeProduktehaftpflichtregelung das Verschulden weitehrin ausdrückliche Grundlage der Haftung sein muss.“98 SGV, Annual Report 1989, p. 51; Annual Report 1990, p. 51; Annual Report 1991, p. 39 f.99 VSG, Annual Report 1990, p. 27.

22

critic was that the pace adopted by the EC was too hectic.100 A working group was established

in 1990. It was to analyze the possible alternative scenarios for Switzerland within Europe.101

But since it was still unclear what the EEA-treaty would look like, the analysis simply

assumed, as a starting point, that Switzerland would join neither the EEA nor the EC.102

In 1991, the EEA was the main theme in the section on economic policy of the annual report.

It was now clear that the EEA agreement will have important consequences for the national

laws in various fields (cartel law, submission law, technical norms, product liability, copy

right, agrarian policy, property laws, regulations on foreign labour, corporation law, the

education and social systems, consumer law, etc.), And in view of all these changes, the

Committee of the SGV decided that the EEA was politically unacceptable.103 At the

“Gewerbliche Winterkonferenz” in January (the main annual meeting of the federation) the

EEA was hardly mentioned and at the “Schweizerischer Gewerbekongress” the EEA-treaty

was only mentioned in the discourse of the guest speaker (Federal Council Delamuraz).104

The “Schweizerische Gewerbekammer” dealt with the planned access of Switzerland to the

IMF and EEA at an extraordinary meeting in Bern and concluded that it had not been possible

to prove the economic necessity for the country to participate in the EEA. In further meetings

of the SGV in April, May and August 1991 the EEA treaty was discussed.

At the yearly meetings of the IGU, the main themes were the Uruguay-round of the GATT

and the far-reaching changes in middle and eastern European countries in 1989. In the view of

the SGV, the GATT will not only concern certain branches but the whole economy. The

chance that barriers of trade will be reduced had to be supported. The successful conclusion of

the Uruguay-round of the GATT was perceived as a kind of safety net for small export

dependent countries and a means to overcome the obstacles, which will inevitably result from

the EEA.105

100 VSM, Annual Report 1990, p. 9 ff. . “Kritisiert wird die hektische Gangart, die von EG-Kreisen auf denBundesrat übertragen wird.”101 SGV, Annual Report 1990, p. 10.102 VSM, Annual Report 1990, p. 11.103 SGV, Annual Report 1991, p. 22 f.; p. 23: Der Vorstand des Schweizerischen Gewerbeverbandes ist an seinerSitzung nach reiflicher Ueberlegung zur Ansicht gelangt, dass der EWR politisch nicht tragbar sei.104 The guest speaker was Bundesrat Delamuraz.105 SGV, Annual Report 1990, p. 28.

23

The EEA and the EC single market was the dominant theme also in 1992. The consequences

of joining the EEA in various fields were now commented on more extensively.106 The

necessary adaptations included in the Eurolex-package comprising the modifications of about

60 laws and 100 reuglations.107 Nonetheless, at the extraordinary “Schweizerischer

Gewerbekongress” in September 1992, the more than 1000 delegates of all member

organisations said “yes” to the EEA (with 549 against 456 votes). The majority may have

been convinced of the advantages of joining the EEA, especially for the large number of sub-

suppliers, the minority was probably scared by the far-reaching and uncertain consequences of

accepting the EEA agreement. 108

4. Beyond the break of December 1992

Notwithstanding the support of all major business associations, in the referendum voted on

the 6th of December 1992, the EEA agreement was rejected with a small majority of votes

(1’786’708 against 1 762 872) and a large majority of the cantons (8 against 18).109 The

immediate reaction of the Swiss government was to proceed with the implementation of the

Eurolex-package foreseen in case that the EEA-agreement had been accepted.110 The other

aim was to avoid discrimination of Swiss firms by concluding bilateral agreements with the

EU in order to reach a level of economic integration similar to the EEA.

The SHIV commented the negative decision with regret and claimed that all options vis-à-vis

Europe were kept open and that all measures to improve business location in Switzerland

should be undertaken immediately.111The strategy pursued before had been to achieve

substantial economic reforms by participating in the EEA. This strategy had become obsolete

and had to be replaced by an autonomous program of internal reform including “eine gezielte

Ausrichtung der schweizerischen Gesetzgebung auf die europäische Rechtsordnung, um

hausgemachte Diskriminierungen auszumerzen oder zu vermeiden.” But the room of

manoeuvre had changed: “Eine Uebernahme tel quell kann nicht in Frage kommen. Wir

müssten die diesbezüglichen Freiheitsgrade nach dem Nein zum EWR intelligent nutzen und

106 SGV, Annual Report 1992, p. 36 f. (labour law); p. 41 ff. (foreign labour); p. 43 ff.: competition andconsumer policy; p. 54 (product liability):107 SGV, Annual Report 1992, p. 22.108 SGV, Annual Report 1991, p. 9 f. The importance of the topic is underlined by the fact that it was the secondextraordinary „Gewerbekongress“ since the foundation of the SGV in 1879.109 SHIV, Annual Report 1992, p. 8 f. 50,3 % of the people and 14 cantons + 4 half-cantons had voted no.Stimmbeteiligung of 78,3% was extremely high for Switzerland.110 SHIV, Annual Report 1992, p. 49. The Eurolex-package, consisting of 59 Bundesbeschlüsse und federal laws,had been accepted in parliament with a clear majority on the 9th of October 1992111 SHIV, Annual Report 1992, p. 23 f.

24

nur solche Vorhaben umsetzen, die der Standortqualität der Schweiz förderlich sind.”112 EC

competition law was one of those areas where the SHIV wanted to stick to the much weaker

domestic rules.113 Wide room was dedicated to the discussion of the different attitudes within

the EC and in Switzerland with regard to the energy industry. In this respect, the SHIV relied

on the European Energy-Charta, where Switzerland continued to participate as fully-fledged

partner. With regard to the liberalization of the Swiss post, the “greenbook” of the EC

remained an important point of reference.114

European integration was thus not stopped with the rejection of the EEA, but continued,

although with other means and somewhat changed objectives. But the end result of the

process had become highly uncertain and time consuming. The importance of Europe as the

main market for exports and imports had also changed, not so much with regard to the actual

shares of exports and imports, but with regard to future business prospects. Europe’s growth

rates, especially those of the large countries were low, while the US economy and the

economies of the Far East were booming. The shift of attention towards the higher level of

world wide economic integration is visible already in 1993. Being able to represent the

interests of Swiss industry by taking part in the various activities of UNICE was perceived as

being even more important than before the rejection of the EAA, but more weight was also

given to supporting the successful conclusion of the Uruguay round. 115

In an expanded version of the paper, the process of European integration and its impact on

institutional change could be followed up to the present in order to identify continuity or

discontinuity with regard to the main areas of convergence or divergence and the impact of

the EC as rule-setter.

5. Preliminary conclusions

The three business organisations SHIV, VSM and SGCI, were clearly exerting pressure on the

public authorities for making national legislation compatible with the rules established within

the EC. Their main motive was to avoid competitive disadvantages for their member firms in

the EC market. The tendency to enhance competitiveness by adopting EC standards and rules

112 SHIV, Annual Report 1992, p. 27113 SHIV, Annual Report 1992, p. 79 f.114 SHIV, Annual Report 1992, p. 93.115 SHIV, Annual Report 1992, p. 39 and 51.

25

in the national context clearly prevailed during this period. The areas subject to EC-rules were

continuously extended and finally culminated in the Eurolex-Package containing all

adaptations of internal legislation demanded by the EEA agreement. Only the SGV was

interested in sticking to national institutions in order to raise barriers to trade and create

competitive advantages for domestic firms. But notwithstanding its passive and defensive

attitude towards European integration, the majority of its member organisations did not

support this attitude and voted in favour of joining the EEA.

SHIV, VSM and SGCI became involved at an early stage of the negotiations and basically

accepted the process of European integration. The participation of Switzerland in this process

was a matter of course, their links with the European associations were strengthened and their

views were increasingly shaped by the European context. The SGV took little interest in the

process of European integration, and where it did intervene it was in order to defend the status

quo. In its view, the best support for the Swiss export industries were international free trade

agreements. To this organisation, the successful conclusion of the Uruguay round was more

important for the export oriented branches then Switzerland’s participation in European

integration.

From about 1985, when the EC decided to create a single market, up to 1992, European

integration had a deep impact on the way institutional change proceeded in Switzerland. In

several fields, the EC became the main agent of institutional change, and national law had to

conform or be compatible with EC guidelines. This process of “Europeanization” was

interrupted, when the EEA agreement was rejected and the planned harmonization of a large

body of legislation became again a matter of internal debate.