Swiss Foreign Policy: Foundations and Possibilities

Swiss Foreign Policy

For decades, Switzerland has been synonymous with neutrality. At the same time, however, the Swiss have fiercely protected their independence and have also been visible players on the international stage. Drawing on years of high-level study, the authors trace the key factors that have shaped Swiss foreign policy after the Second World War: neutrality, anticommunism and economic integration. Unique among Western European countries, Switzerland has pursued economic integration without entering into wider political union, performing a difficult balancing act between engagement and self-determination. Of interest to students of European and comparative politics, this is the first comprehensive look at Switzerland’s post-war foreign policy. Laurent Goetschel is Professor of Political Science at the University of Basel and Director of the Swiss Peace Foundation (Swisspeace) in Berne. He has published widely on Swiss foreign policy, and his research interests include European integration, foreign policy and peace and conflict research. Magdalena Bernath works for the Swiss Political Yearbook specializing in elections, parties, and financial and spatial planning policy at the University of Berne. Daniel Schwarz works for the ‘politools’ political research network in Berne, specializing in e-democracy projects. He has served as a research assistant at the Swiss Peace Foundation.

Swiss Foreign Policy Foundations and possibilities

Laurent Goetschel, Magdalena Bernath and Daniel Schwarz

This book was originally published in German in 2002 as Schweizerische Aussenpolitik: Grundlagen und Möglichkeiten by Verlag Neue Zürcher Zeitung, Zurich. First published in English 2005 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2005. "To purchase your own copy of this or any of Taylor & Francis or Routledge's collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.'' © 2005 Laurent Goetschel, Magdalena Bernath and Daniel Schwarz All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN 0-203-33956-8 Master e-book ISBN

ISBN 0–415–34812–9 (hbk) ISBN 0–415–34813–7 (pbk)

Contents

List of illustrations

vii

Acknowledgements Abbreviations

ix x

Introduction

1

PART I

Theoretical bases

5

1

Foreign policy and foreign policy analysis

7

2

Role concepts of Swiss foreign policy

13

PART II

Institutions and decision-making processes

27

3

Institutional bases

29

4

Foreign policy decision-making processes

45

PART III

Policy fields

61

5

Policy toward Europe

63

6

Peace and security policy

79

7

Development policy

94

vi Contents

8

Foreign trade policy

105

9

Conflicting goals and coherence in foreign policy

127

Conclusions

147

Notes Bibliography Appendix Index

152 180 197 202

Illustrations

Figures 3.1 Organisational structure of the DFA (as of January 2002) 4.1 Consultative procedure at the federal level; number of issues per year 7.1 Development by percentage of the world’s gross national product (developing and industrialised countries) 7.2 The most important SDC sections 8.1 Most important tools of Swiss foreign trade policy 9.1 Interface levels for policy coherence

36 47 97 100 106 129

Tables 4.1 Decision-making authority for foreign policy issues (Dec. 1981–Nov. 1985 and Dec. 1989–Nov. 1993) 4.2 Foreign policy issues with a leading agency, grouped by departments 7.1 Development of UNDP Human Development Index (HDI), 1975–99 7.2 International development goals 7.3 SDC development priorities 7.4 Official development assistance (ODA) in international comparison (1998) 8.1 Switzerland’s foreign trade quota over the course of history (in percentage of gross national product) 8.2 Indicators for Swiss foreign trade in international comparison 8.3 Swiss foreign trade relations with world markets (by percentage) 8.4 Exchange coefficient of trade in goods between Switzerland and developing countries (1999) 8.5 Exchange coefficient of trade in goods between Switzerland and developing countries over the course of history (1900–99) 8.6 Average import tariffs (by percentage of value) 8.7 Agricultural expenditures, 1999, in international comparison

48 48 98 99 101 103 107 108 110 112 112 121 121

viii Illustrations

Boxes 2.1 2.2 6.1 8.1 8.2 8.3 9.1

Neutrality policy Myths Collective security and collective defence The long way to Bretton Woods The GATT, the WTO and Switzerland Sanctions against South Africa The search for a malaria vaccine

15 24 82 116 119 124 143

Acknowledgements

It is impossible to list all the individual names who have contributed to this work. But our appreciation is primarily for the numerous researchers who have prepared the basic studies enabling this book within the framework of the Swiss National Research Programme 42. Thanks are also due to members of the NRP 42 expert group (especially the two chairs, Jean-Claude Favez and Jürg Martin Gabriel), whose continuous assistance helped bring the research projects to a successful conclusion. The experts approved an initial version of the German manuscript and contributed a series of constructive criticisms toward its improvement. The activity of the expert group and the programme’s flow would not have been possible without beneficial support by Department IV of the Swiss National Science Foundation’s management office through its representative, Christian Mottas, and the representative in the Research Council, Beatrix Mesmer. The Institute of Political Science at the University of Berne and the Swiss Peace Foundation (swisspeace) have supported the programme director’s work through their infrastructures. Not to be overlooked are the numerous behind-the-scenes services provided, whether by interview partners in the administration, associations, or news media as well as by staff members in libraries or archives. Without these countless and partially anonymous contributions of time and effort, information necessary for this book’s documentation would not have been compiled. Individual chapters of this book were reviewed and supplemented by experts from the Swiss administration and research community. We offer our sincere thanks to these people as well. Published with the support of the Swiss National Science Foundation. Translated by Lyn Shepard and Meg Egan Auderset.

Abbreviations

APEC Art. ASEAN ASEM BAR BBl BWI CCG CEEC CERN CFSP CINS CIS CSCE CVP DAC DDPS DEA DFA DHA EC ECHR ECJ ECSC EEA EEC EFTA EMU EPU

Asia Pacific Economic Cooperation Article Association of Southeast Asian Nations Asia-Europe Meeting Schweizerisches Bundesarchiv (Swiss Federal Archives, Berne) Bundesblatt (official publications of the federal administration) www.admin.ch/ch/d/ff/index.html Bretton Woods institutions Conference of Cantonal Governments Central and East European Countries European Organisation for Nuclear Research Common Foreign and Security Policy Campaign for an Independent and Neutral Switzerland Commonwealth of Independent States Conference on Security and Cooperation in Europe (today OSCE) Christian Democratic People’s Party of Switzerland (Christlichdemokratische Volkspartei) Development Assistance Committee (of the OECD) Federal Department of Defence, Civil Protection and Sports Federal Department of Economic Affairs Federal Department of Foreign Affairs Federal Department of Home Affairs European Community European Convention for the Protection of Human Rights and Fundamental Freedoms European Court of Justice (of the EU) European Coal and Steel Community European Economic Area European Economic Community European Free Trade Association Economic and Monetary Union European Payments Union

Abbreviations xi ERG ESDP ETEC EU FC FDF FDJP FDP FOFEA FPD GATS GATT GDP GNP HDI HIPC IDA ILO IMF IRG KOFF LAE LCB LCC LCG LPC LWM MAI MFN NAFTA NATO NGO NRLA NRP NZZ ODA OECD

Export risk guarantee European Security and Defence Policy Federal Department of the Environment, Transport, Energy and Communications European Union Federal Constitution of the Swiss Confederation (SR 101) Federal Department of Finance Federal Department of Justice and Police Free Democratic Party of Switzerland (Freisinnig-Demokratische Partei) Federal Office for Foreign Economic Affairs (today SECO) Federal Policy Department (today DFA) General Agreement on Trade in Services General Agreement on Tariffs and Trade Gross domestic product Gross national product Human development index Heavily indebted poor countries International Development Association International Labour Organisation International Monetary Fund Investment risk guarantee Center for Peacebuilding (Kompetenzzentrum Friedensförderung) Federal law on pacific utilisation of atomic energy (SR 732.0) Law governing the conduct of business between the National Council and the Council of States (SR 171.11) Federal law on the Cantons’ cooperation in the federal government’s foreign policy (SR 138.1) Federal law on the control of goods usable for civilian and military purposes and specific military goods (SR 946.202) Federal Law on the participation of the Cantons in the foreign relations of the Swiss Confederation (SR 138.1) Federal law on war material (SR 514.51) Multilateral Agreement on Investments Most-favoured nation treatment North American Free Trade Agreement North Atlantic Treaty Organisation Nongovernmental organisation New Rail Link through the Alps (new base tunnels through the Gotthard and Lötschberg mountains) National Research Programme of the Swiss National Science Foundation Neue Zürcher Zeitung newspaper Official development assistance Organisation for Economic Cooperation and Development

xii Abbreviations OECE OEEC OPCW OSCE OSEC PARP PD PdA PfP PLO PSO SAEFL SBA SDC SDFC SEA SECO SHA SIPPO SME SNB SOFI SP SR SVP TAFTA TRIPS UN UNCED UNCTAD UNDP UNIDO USA WEF WEU WIPO WTO WWF

Organisation for Economic Cooperation in Europe Organisation for European Economic Cooperation (today OECD) Organisation for the Prohibition of Chemical Weapons Organisation for Security and Cooperation in Europe Schweizerische Zentrale für Handelsförderung (Swiss agency for trade promotion) Planning and review process Political division (within the DFA) Labour Party of Switzerland (Partei der Arbeit) Partnership for Peace Palestine Liberation Organisation Peace support operation Swiss Agency for the Environment, Forests and Landscape Swiss Bankers Association (SwissBanking) Swiss Agency for Development and Cooperation Swiss Development Finance Corporation Single European Act State Secretariat for Economic Affairs Swiss Humanitarian Aid Unit Swiss Import Promotion Program Small and Medium-sized Enterprise Swiss National Bank Swiss Organization for Facilitating Investments Social Democratic Party of Switzerland (Sozialdemokratische Partei) Systematic collection of Swiss federal law (Systematische Sammlung des Bundesrechts) www.admin.ch/ch/d/sr/sr.html Swiss People’s Party (Schweizerische Volkspartei) Transatlantic Free Trade Area Trade-Related Aspects of Intellectual Property Rights United Nations UN Conference on Environment and Development UN Conference on Trade and Development UN Development Programme UN Industrial Development Organization United States of America World Economic Forum Western European Union World Intellectual Property Organisation World Trade Organisation Worldwide Fund for Nature

Introduction

Simply defined, ‘foreign policy’ means protecting a country’s interests at the international level. Changes in foreign policy have accelerated since the end of the Cold War: at the global level, the United Nations (UN) and multilateral action have taken on greater importance, even as the search for new principles of order continues. At the regional level, the European Union (EU) has expanded while also increasing its depth. Non-state actors such as international organisations, transnational companies, and non-governmental organisations (NGOs) have grown more influential, thanks to increasing globalisation and international overlap. Meanwhile, nation-state borders have lost significance. The content and implementation of foreign policy has, naturally, grown more complicated. These global and regional developments affect every nation, Switzerland included. The Swiss electorate has extensive, direct democratic decision-making rights whereby important foreign policy reforms are often subject to voter approval. It is this particular foreign policy feature that makes Swiss foreign policy peculiar to many outsiders. ‘Foundations and Possibilities of Swiss Foreign Policy’ (NRP 42), the national research programme of the Swiss National Science Foundation, was launched after such a vote. This programme is the first in Switzerland to focus on foreign policy as a whole.1 Three years before the launch of NRP 42, the Swiss electorate had rejected entry into the European Economic Area (EEA), despite support by the Federal Council (the Swiss executive branch) and broad circles of the political and business elite. This decision, following the electorate’s 1986 rejection of entry into the UN, reflected Swiss citizens’ disavowal of government thinking on an important foreign policy issue. It raised numerous questions about the functioning of foreign policy, especially the impact of conflicts between internal decision-making bodies and outside demands. Political scientists in Switzerland had long given foreign policy little attention, instead stressing studies on the nation’s domestic policy structure – particularly direct democracy, federalism and the system of government. Foreign policy analysis was a clearly under-represented, heterogeneous field of research.2 Analysis of neutrality, another central Swiss foreign policy feature, was left to international law specialists, who dominated the field. So the lack of a comprehensive and up-to-date representation of Swiss foreign policy is hardly surprising. Recent publications on Swiss foreign relations are

2 Introduction written from a largely legal and historical standpoint, most of them by administration experts who formulate foreign policy.3 Strikingly, their analyses often neglect or treat only marginally the domestic politics dimension of foreign policy.4 Yet it is this tension, created by conflicts between domestic and foreign policy, which has led to stimulating discussion on Swiss foreign relations since the end of the Cold War. Over the course of five years (1995–2000), some fifty-eight research projects under the auspices of NRP 42 have dealt with Swiss foreign policy, stemming from the disciplines of history, mass communications and political science, as well as sociology, law and economics. These studies focused on the influence of global change on Swiss foreign policy, on the impact of domestic policy factors on foreign policy decision-making, and on an analysis of conflicting goals that undercut the coherence and efficiency of Swiss foreign policy. NRP 42 findings form the basis of this publication. (Please note: the authors selected particular research works for inclusion. Studies from the NRP 42 are indicated in italic print. A complete list of all NRP 42 syntheses appears in the appendix.) This book presents the most important, current challenges facing Swiss foreign policy, addressing key research issues raised by political scientists when analysing foreign policy,5 while also reflecting the priorities of NRP 42. We first ask, in what context do foreign policy decisions occur? And how do the collective expectations and role definitions of both elites (i.e. the general ruling class: politicians, business leaders, etc.) and the general population affect foreign policy? Second, we examine the flow of foreign policy decision-making processes. Does the division of power between the executive and legislative branches influence foreign policy? How do public opinion, party politics and interest groups affect it? And finally, we look at the specific ways in which collective expectations and decision-making structures affect the formulation of individual policy fields. Part 1 of this book (chapters 1 and 2) presents the conceptual and theoretical bases necessary for understanding foreign policy and foreign policy analysis. The opening chapter addresses foreign politics in the narrower sense and defines terms relevant to it – sovereignty, interests, and power. Chapter 2 presents role concepts (the role that a country takes in the international setting) and how they apply to Switzerland, discussing, among other matters, ‘small states’ and ‘neutrality’ determinants and providing background information on important developments in the international setting. Part 2 (chapters 3 and 4) presents the basic conditions in which Swiss foreign policy functions. The third chapter examines political institutions, focusing particularly on the horizontal division of authority between the executive branch, parliament and the electorate versus the vertical division of authority between the federal government and the cantons. In the fourth chapter we present political processes, explaining the interplay of various actors in Swiss foreign politics. Part 3 introduces selected foreign policy arenas (chapters 5 to 8): Swiss policy toward European integration, peace and security, development, and foreign trade.6 Chapter 9 addresses conflicting goals and coherence in foreign policy. Finally, we present our thoughts on Swiss foreign policy and the conflict between domestic policy and the international setting.

Introduction 3 Levels of analysis vary throughout the book, according to chapter content. Foreign policy actors include nation states, international organizations, national institutions, societal or non-state groups and individuals. The perspective and theoretical assumptions presented determine which actor is highlighted. The first two chapters consider three policy arenas: international, domestic, and individual. Chapters three and four concentrate on the impact of actors within the state: on institutions, groups, and individuals. Given the nature of foreign policy, our analysis typically focuses on government as the central actor. This book should be viewed as a joint work. Daniel Schwarz focused on the sections dealing with institutional foundations, foreign trade and development policy, as well as the problem of conflicting goals and coherence. Magdalena Bernath gave special attention to the foreign policy decision-making process, collaborating with Laurent Goetschel on the chapters on foreign policy and foreign policy analysis, as well as role concepts. Goetschel was also responsible for the chapters on European integration, peace and security. We hope that our book will contribute to the scholarly debate on Swiss foreign policy, encouraging international scholars to consider the ‘strange’ Swiss case when analysing international relations.

Part I

Theoretical bases

1

Foreign policy and foreign policy analysis

Chapter 1 presents basic political science terminology and concepts necessary for understanding foreign policy and foreign policy analysis. The first section discusses special characteristics of the policy field. Foreign policy serves to preserve the interests of the nation state abroad, thus forming a bridge between the national and international systems. Since national foreign relations are closely linked to sovereignty, national interest and power, we explain the meaning of these terms within the framework of foreign policy. The second part of the chapter addresses levels of analysis and theoretical assumptions – the most important factors to be considered when analysing foreign policy.

1.1 Foreign policy What does foreign policy embrace and how does it differ from other policy areas? Seidelmann defines foreign policy as the means through which a society in a sovereign nation-state pursues and enforces its interests.1 This assumes statehood, the intent and ability to determine the state’s interests and a relationship with the countries surrounding the nation. A country’s foreign relations include not only national foreign policy, but also policy areas such as security, economy and culture, and arenas such as tourism. As both a process (politics) and output (policy), foreign policy is the link between activities inside a state and the world outside.2 Multinational groups, international and non-governmental organisations do not conduct foreign policy, even if they seek to influence it and participate in conceiving and/or implementing it. Yet these non-governmental actors have assumed a greater role, thanks to increased international involvement and globalisation: international and supranational organisations, trans-national unions, multinational enterprises, and NGOs defy a nation-state’s call for sovereignty in defining its foreign policy.3 Foreign policy displays specific characteristics that distinguish it from other political sectors. When addressing political conflicts, the international system is not subject to intra-national (i.e. domestic) rules. Numerous regulations shape innerstate life, including social contracts, a monopoly on force,4 sanctioned regulatory mechanisms, and hierarchies of authority. Thanks to the international system’s lesser degree of organisation and integration, fewer restrictions limit foreign policy.5 This has been reflected in the use of military force during emergencies.6

8 Theoretical bases Among their other interests, states seek to safeguard their independence. This link between foreign policy and a state’s very existence has, in the past, led to the elevation of foreign policy, to it being regarded as superior, as high politics. The primacy of foreign policy is the core element of the realist school of thought. It follows that foreign policy can be conducted effectively only if it appears both unified and coherent, and able to react promptly if necessary. In keeping with the realist view, domestic debate over the power and influence of political parties should affect foreign policy less than other areas of politics. This explains why foreign policy has remained the preserve of the executive much more than other policy areas.7 The monarchy could withhold foreign policy (along with defence policy) from the parliamentary supremacy of citizens.8 This outlook led to a reining in of parliamentary influence in practically all Western European states: ‘Foreign policy and defence were traditionally considered matters outside and above the partisan domestic debate: directly linked to the preservation of sovereignty, and therefore to be entrusted to the executive.’9 1.1.1 Sovereignty In terms of international law, the term sovereignty is closely linked to the existence of nation states.10 Morgenthau defines sovereignty as ‘the supreme legal authority of the nation to give and enforce law within a certain territory and, in consequence, independence from the authority of any other nation and equality with it under international law’11 (emphasis by the authors). Sovereignty should be understood as supremacy achieved by the definition and application of legal standards within a specific territory.12 This supremacy must be applied and recognised, but it has never been absolute. Rather, since its modern definition linking it to the nation-state, it has been integrated within a network of international standards and treaties.13 Nor does a state need to be equally sovereign in all spheres:14 Internal sovereignty corresponds to the supremacy of a state within its own territory, for instance, in the legislative or law-and-order realm. External sovereignty addresses independence and equality, but lays no claim to international supremacy. It involves protection from intervention, equal treatment with regard to international law, and an independent foreign policy. On the one hand, foreign policy is an expression of sovereignty. On the other, it serves to help a country maintain its sovereignty. 1.1.2 Interest ‘Interest’, alongside ‘power’ (see below), is the most frequently used term in political science.15 Power and ‘national interest’ form the key concepts of the realist school. National interest is equated with the country’s interests, with the preferences of its citizenry and with the general welfare. However, one cannot claim that the national interest of any state purely reflects the sum of its citizens’ interests.16 In fact, both international and domestic policies are shaped by the struggle between conflicting interests and the power of one subgroup’s interests over those of another.

Foreign policy and foreign policy analysis 9 The interests of a state are, thus, neither given nor constant. Politicians appeal to the national interest to maintain domestic support and to justify actions abroad. And so it is possible for one party to call for increased cooperation with the outside world while another speaks out for Switzerland remaining isolationist – both of them in the so-called national interest. Foreign policy analysis must therefore direct its attention to the following three questions:17 which interests hide behind the so-called national interest?, who defines the national interest?, and what means are used to pursue the national interest? According to Albrecht, when looking at a community’s foreign policy, these three questions form the core concern for political science, as we seek to create legitimacy and acceptance for our particular interests by appealing to the ‘national interest’.18 1.1.3 Power Generally defined, power is the ability to bring about intended results. What the norm represents for jurisprudence, and utility for economics, the concept of power represents for political science.19 The formation, distribution and exercise of power form the fundamental basis of political processes, according to Lasswell.20 Power defines the interest categories in which statesmen think, Morgenthau maintains.21 Power consists of both positive and negative components. We understand positive power to be the ability to influence third parties in the desired way. Relying on Max Weber’s classical political science definition, this means one actor in a social relationship using his or her position – despite resistance – to carry out his or her will.22 We understand negative power to mean the ability to protect oneself from a third party’s influence. Or, to quote another doyen of the discipline, it means the ability not to have to learn anything.23 Singer also refers to this sort of power as autonomy.24 Hence, a state’s foreign policy power arises both from its influence on its own environment and on its degree of autonomy toward the international environment. Effective influence and autonomy depend on how the interests of a state relate to those of its neighbouring states, and on how its environment is designed institutionally.25 Ultimately, a state’s power is determined by the way it perceives and judges its possibilities.26 These depend upon context. Certain power resources are effective only under specific conditions. Take, for example, military and economic power. If we consider the desired end, the final resort to military power makes sense mainly in a military context, while use of economic power is meaningful only in an economic one. The expressions ‘negotiation power’ and ‘norm-based power’ are used somewhat less frequently.27 Negotiation power refers particularly to international organisations and policy networks, while norm-based power is most effective when it is based on established conventions, such as in the human rights sphere.28 Power resources cannot be transferred at will. A great deal will be ‘lost in the translation’.29

10 Theoretical bases

1.2 Foreign policy analysis Foreign policy research seeks to contribute to the understanding of international relations by explaining foreign policy decision-making processes. 30 The various approaches differ in their levels of analysis, theoretical assumptions and methodology. Foreign policy decision-making can be studied at the international or systemic level, at the national level, and at the level of individual decision-makers or small groups. Systemic approaches consider the state’s position in the international setting, while domestic approaches focus on the nation state’s society, culture and political institutions. An individual approach would centre on the personal or psychological characteristics of national leaders.31 When looking at theoretical and methodological differences, three categories emerge.32 The first and largest category comprises approaches that assume rational, goal-oriented, and purposeful action by individual or collective actors. These include the various angles of the realist school, game theory, and interdependence and regime theory (see below). The second category explains foreign policy behaviour with social, political, or organisational conditions that form the general framework for decision-making (whether at the national or international level ). This group includes studies by Allison33 on the Cuba crisis and investigations by Deutsch and Czempiel.34 A third category operates from the psychological perspective – looking at patterns of individual and collective perception and attitude, for example. These rely on analysis of perception patterns and images35 and try to categorise ‘cognitive maps’ of attitudes.36 One’s theoretical approach affects how one sees the relationship between the domestic and foreign policy variables that explain foreign policy behaviour. In the history of diplomacy from the nineteenth century until the First World War, for example, strategy was the crucial consideration, stressing the primary role of power in international relations. Accordingly, external change, not internal, determined changes in outcomes. The basic assumption was that states’ domestic features were static (at least in the short term).37 This outlook peaked in the demand for foreign policy’s primacy. The German historian Eckart Kehr represented the thesis opposing the primacy of domestic policy.38 Based on studies of the domestic and societal fundamentals of German foreign policy at the end of the nineteenth century, he showed how often domestic policy considerations determined foreign policy decisions.39 The various approaches of foreign policy analysis are anchored in the main theories of international relations, which are realism and neo-realism, interdependence theory, constructivism, neo-classical realism, and regime theory.40 Based on experiences from the Second World War, ‘realism’ developed as the first school of international relations.41 (Neo-)Realists explain foreign policy behaviour with reference to states’ relative power versus the international setting. They assume that this power ratio directly affects and explains. Thus, realists prefer to dwell on the military power ratio: even peaceful states with basically defensive intentions see themselves forced to behave offensively by the anarchic structure of the

Foreign policy and foreign policy analysis 11 international system.42 Game theory comes into play particularly if the confrontation involves only two actors and if various scenarios for cooperation or confrontation can be staged, based on differing preferences and motivations. Keohane and Nye developed the ‘concept of interdependence’ during the 1970s as a counter-movement to realism and neo-realism.43 Supported mainly by economic considerations, they diagnosed a limited ability to act at the individual state level. Foreign policy analysis benefits from the interdependence approach, because it underscores the importance of transnational relationships. These also include the role of transgovernmental networks and their influence on national decision-making processes.44 Kaiser too, refers to ties between society and decision makers.45 He assumes that related international conditions tend to strengthen these ties. Also connected to this is an easing of the realists’ strict division between domestic and foreign policy. This applies to content and priorities as well as to procedures.46 Sundelius notes other interdependence-related research topics: thematic extension of the foreign policy agenda, as well as the increasing importance of multilateral negotiations and agreements.47 Constructivist works triggered a fundamental debate in the social sciences and – since the mid-1990s – also in international relations. In contrast to realism and interdependence theory, the constructivists held that an objective reality did not exist. Rather, reality was constructed: based on the subjective perception of individuals and their thought patterns. Constructivism points at important issues for foreign policy research: how interests are formed and, particularly, how they change.48 Study of state interest formation and variation offers explanations when a country changes its foreign policy, but the setting remains the same – or, conversely, when foreign policy remains the same but the international setting varies.49 Hence, states can develop a secure community between themselves despite the anarchic structure of the international environment – for example, as the result of interaction between actors whose security identity changes from a nationally oriented to a collective identity.50 This is also true for integration regionally. Thus, states may be introverted or extraverted to varying degrees in various policy areas, and can welcome cooperation or integration to differing degrees.51 From a constructivist’s vantage point, when explaining the foreign policy behaviour of states, the structural conditions of the international setting are important only to the degree to which they are perceived or designed by them. This again has an impact – or at least it can have one – on the international structure. A state’s foreign policy identity and the self-positioning determined by it in the international context are the most important explanatory factors when analysing its foreign policy. These include a given state’s constellation, international institutions and historic experiences.52 Accordingly, historic, media science, and textanalysis approaches are valuable. Works based on analysis of role concepts (see chapter 2) and individual attitude patterns can also be assigned to constructivism. According to Rose, the so-called ‘neo-classical realists’ occupy a middle ground between realists and constructivists.53 Understanding the foreign policy behaviour of individual states assumes consideration of domestic policy variables, including

12 Theoretical bases how the political elites perceive the environment and the corresponding decisionmaking mechanisms. These translate constraints stemming from the international setting into intermediate variables, before states react to them politically.54 In contrast to interdependence or purely structural approaches, this position places greater value on the role played by domestic policy factors in foreign policy decision-making and is less oriented toward the direct effects of specific change in the international setting. The concept of international regimes is oriented more intensively toward outside structural elements. Regimes may be defined via the implicit or explicit principles, norms, rules and decision-making procedures to which actors orient their expectations in a troubled area of international relations.55 Within foreign policy analysis, the regime approach is interesting in that it considers state actors under conventional assumptions (such as rational behaviour and utility maximisation) in a cooperative framework characterised by, among other things, flat hierarchies or none at all, problem-oriented operation, and a participatory process between the actors. Regimes are most appropriate for grasping cooperative behaviour and analysing related conditions. This is particularly true when the cooperative behaviour lacks visible organisations, yet is based on the institutionalisation of formal and informal behaviour patterns and rules.

Summary We understand foreign policy to be the means by which a society organised as a sovereign nation-state pursues and enforces its interests toward other states in the international arena. This definition addresses the two most important issues relevant for foreign policy analysis: the state as the most important actor in international policy, and the social forces behind the state. The concerns and needs of individual groups and persons are not uniform, so states’ interests are not simply a given. Rather, they are determined by debate over the influence on power distribution. On the other hand, the definition above indicates the outer limits in which foreign policy takes place. It occurs in a changing international setting; this affects whether foreign policy goals can be achieved, and it may also influence the definition of these goals. A brief overview of the various theoretical approaches of international relations has shown which level of analysis predominates, depending on theoretical assumptions and methodological procedures. In each case, foreign policy figures as a bridge between the national and international systems.

2

Role concepts of Swiss foreign policy

The opening section of this chapter presents various theoretical aspects of role concepts. The second section outlines the factors that shaped Swiss foreign policy after the Second World War and have influenced its impact up to the present: neutrality, anti-communism and economic integration. The third focuses on important international changes that have helped shape Swiss foreign policy: the search for international security, European integration and globalisation. Finally, we show how this change affects Switzerland’s role concepts.

2.1 Theory of role concepts According to Frei, two factors determine foreign policy behaviour: a country’s interpretation and perception of the international environment, and the role the country plays in the international arena.1 These world images and role concepts shape how individuals, whether the political elite or the general population, view foreign policy issues and options. Ultimately, elementary emotions shape one’s attitudes toward the world outside; two basic orientations emerge: one positive, emphasising closer contact; the other negative, stressing defence or escape.2 The public reacts from either an open or an isolationist position, depending on which feelings the outside world arouses. In elite circles, these concepts either reflect a world view or underscore seclusion. However, Frei emphasises that in all circles role interpretations are oriented either toward greater activity or increased restraint.3 The flood of complex information means the public develops relatively simple, robust notions about goals for foreign policy.4 In the case of Switzerland, this includes neutrality. An essential trait of role concepts is the equating of individual foreign policy elements with national identity. According to Holsti, national role concepts are crucial for policy formulation: A national role conception includes the policymakers’ own definitions of the general kinds of decisions, commitments, rules, and actions suitable to their states, and of the functions, if any, their state should perform on a continuing basis in the international system or in subordinate regional systems.5 A country’s elite defines its national role concepts. Two sources of influence determine the national role concepts formed:6 they look at a society’s self-image, and they take into account international expectations for the country.

14 Theoretical bases

2.2 Traditional role concepts of Switzerland When the Swiss Confederation was formed in 1848, this new republic-based government was surrounded by rival monarchies that determined Europe’s politics. Switzerland’s very existence depended on the good will of these neighbours. While multilingual and multicultural, Switzerland was – both demographically and territorially – a small state surrounded by much larger nations. And, from an industrial perspective, other than water and salt, it had no natural resources worth mentioning. Switzerland thus developed a reserved foreign policy attentive to business interests. From the founding of the Swiss Confederation to the end of the Cold War, the country’s foreign relations rested on two pillars: neutrality and foreign trade policy, reflecting the fundamental facts of life with which Switzerland had to cope.7 Two objectives guided Swiss foreign relations: stay out of wars between the surrounding states and secure trans-border trade. The interplay of direct democratic rights was hardly important in shaping foreign policy. The Swiss people consider their country unique (‘Sonderfall ’ ) in its relations with the outside world, due to a combination of direct democracy, federalism and a collegial government system, as well as its neutrality and small-state identity. Because Switzerland is small, both geographically and demographically, it is included in the current view that small states are not part of the circle of countries that determine or even influence the international system.8 The second part of this chapter focuses on how Switzerland interpreted its position in the world, beginning with neutrality. We are less interested here in the influence of world images and role concepts on specific foreign policy moves, viewing these instead as dependent variables. Holsti also advocates this approach: ‘If we assume that most decisions will be reasonably consistent with role conceptions, then the task of foreign policy analysis should be to explain the origins, presence, and source of change in national role conceptions rather than single decisions.’9 In addition to neutrality, we take up two other factors determining Swiss policy: anti-communism and economic integration. Both contribute to a survival strategy for Switzerland, a territorially small but rather densely settled country poor in natural resources. 2.2.1 Neutrality Neutrality became a dominant characteristic of Switzerland’s national identity only after the Second World War.10 It played a crucial role in shaping Switzerland’s foreign policy in subsequent years. Being spared direct involvement in the Second World confirmed for Switzerland the advantages of armed neutrality, through which it also sought to guarantee its independence after 1945.11 Political elites promoted this notion, which became anchored in an idealised, national historical image.12 Between the world wars, neutrality was never considered part of the central (constitutional ) task of foreign policy, securing independence. Only Switzerland’s entry into the League of Nations in 1920 started this process.

Role concepts of Swiss foreign policy 15

Box 2.1 Neutrality policy Neutrality policy includes each of the measures a state takes – voluntarily, independent of neutrality law – in order to guarantee the efficiency and credibility of its neutrality. In contrast to neutrality law, neutrality policy is not legally regulated. The state is free to adapt its neutrality policy according to international events, as Switzerland has done on various occasions. Until 1920, the Confederation pursued a comprehensive neutrality policy. For security reasons, it decided not to become entangled in conflicts (i.e. of a military, economic, or political nature) between other states. Between 1920 and 1938, Switzerland conducted a differentiated neutrality policy, taking part in economic sanctions imposed by the League of Nations. During the Second World War and the East–West conflict, it returned to a comprehensive, so-called integral neutrality policy. At the end of the Cold War in 1990, the new political setting meant Switzerland adapted its neutrality policy once again. In the wake of the Gulf crisis it decided, autonomously and without legal obligations, to adopt economic sanctions imposed by the UN Security Council. (Since UN entry in 2002, Switzerland is bound to apply binding Security Council sanctions; see also subsection 8.6). The foreign policy report published in 1993 even foresaw the possibility of Swiss participation in UN military sanctions. Source: Clavel and Schoenenberger (2000) Sonderfall ade – die Schweiz auf neuen Wegen. Zürich: vdf, p. 75, based on Bichet (1999) La neutralité: definition et perspectives. Berne: DFA.

At that time, neutrality was the subject of intense debate, leading temporarily to differential neutrality. Moos has compared this voting campaign with that of the Swiss proposal for entry into the UN in 1986.13 He asserts that neutrality, though an important issue at the time of Switzerland’s entry into the League of Nations, was only one of several issues, while it became the central issue in rejecting entry into the UN in 1986. Previously, the Swiss viewed neutrality as vital to maintaining independence, but not as the actual goal of Swiss foreign policy. Thus, the council of the cantons (the Tagsatzung) did not include neutrality in the Article of Purpose in the Federal Constitution of 1848, reasoning that Switzerland might conceivably choose to disavow neutrality one day, in order to preserve independence.14 Thus, independence from the rest of the world was in no way connected to the ‘sacrosanct neutrality principle’.15 Rather, it complimented the exaggerated, mythical Swiss ‘yearning for freedom’, whereby collective freedom from foreign rule (as opposed to individual freedom) took priority. Riklin and Möckli note critically that history confirms Friedrich Dürrenmatt’s suspicion that the freedom of the Swiss people was sacrificed for Switzerland’s independence.16 So how did neutrality go from being a policy tool, conceived as a highly expedient and rational means to an end, to being a value central to Swiss foreign

16 Theoretical bases policy? According to Imhof et al., the boundaries between the familiar and everything foreign include elements central to the building of a nation (and its identity).17 From them, a society gains energy both to integrate internally and to differentiate itself from the outside world. Kunz and Morandi credit the Second World War with imparting Swiss identity and integration, providing the country with a common history that has helped it to overcome social, political and language divisions.18 In contrast, during the immediate post-war era, Switzerland experienced a domestic split between its left and conservative camps and, in terms of foreign policy, was isolated by the war’s victors, who questioned the usefulness and expediency of Swiss neutrality. This period, characterised by Imhof et al. as transitional, ended in the 1940s.19 In the 1950s, the Swiss resolved the domestic crisis by integrating relevant political forces to form a ‘second mental national defence’.20 The onset of the Cold War, with its clear international divisions, enabled Switzerland to rediscover its place internationally and, at the same time, to recast foreign policy neutrality as no longer a problem. From then on, neutrality secured the Swiss position toward the outside world while also promoting domestic integration and national identity. Neither the political elites nor the media disputed it, and it took anchor among the public. While this attitude toward the country during the 1950s served as a central yardstick,21 the simultaneous claim to be an integral part of the West led to ‘foreign policy schizophrenia’.22 Until the end of the Cold War, neutrality was ingrained in the minds of most political elites and especially the electorate as a uniquely Swiss trait that guaranteed national autonomy. In later decades, other issues moved to the forefront of public debate in Parliament and the media. In the late 1960s and early 1970s, for example, parties and movements appealing to right-wing nationalism exaggerated problems of foreign domination, brought on by the increase in migrant workers. This national identity construct was emphasised anew – and to some extent experienced a renaissance – before the 1986 popular vote on whether Switzerland should enter the UN. The proposal’s massive rejection at the polls showed for the first time a gap between what many political elites (who had advocated entry) considered Switzerland’s foreign policy role and the opinion of the general public. According to Brunner, at the end of the twentieth century most Swiss considered independence and neutrality to be so indivisibly intertwined as to be equal pillars of the Swiss Confederation – contrary to the facts.23 This ‘irrational national consensus’, as he called it, came into doubt with the collapse of the bipolar world order after the fall of the Berlin wall. Swiss–European relations needed redefinition, and right-wing opposition rallied around the Swiss People’s Party (SVP) and the Campaign for an Independent and Neutral Switzerland (CINS; formed in 1986 at the time of the referendum on UN entry). The CINS name is itself a reminder of Helvetian duality. If the right-wing opposition took root during Cold War anti-communism (see below) – spurred on by neutrality, among other factors – it presents a new threat today in its pronounced opposition to European integration. After victory in the

Role concepts of Swiss foreign policy 17 EEA vote of 1992, the nationalist movement managed to preserve its anti-European orientation through the 1990s; opposition to Europe became Switzerland’s raison d’être.24 2.2.2 Anti-communism The Swiss anti-communism mindset25 had its golden age during the hot phase of the Cold War, when the general public saw Western European integration as a bulwark against communism and assumed a markedly pro-European stance. Obviously, Swiss neutrality meant that political participation in this integrating Europe was never discussed (see below as well as subsections 5.1 and 8.4). This, according to Imhof et al., led to the foreign policy schizophrenia mentioned previously.26 Warnings by the communist Labour Party (PdA), decrying the armament of the Swiss army and intensified economic contacts with Europe as a ‘scandalous’ integration in the West bloc and violations of neutrality, went unheeded. For Mantovani, Switzerland’s clear ideological adherence to the West and its contribution to the Marshall Plan enabled Switzerland to excuse itself from requirements for a formal security policy commitment with Western powers.27 But the roots of Swiss anti-communism run deeper. Moos has shown that the debate over Bolshevism had already played a role in the debate over entry into the League of Nations.28 At that time, public debate reflected the parties’ basic ideological positions. Hence, much of the political left considered the League of Nations to be a tool of the bourgeoisie and of capitalism. On the other hand, the organisation represented a ‘protective wall against Bolshevism’ for conservative and farming exponents.29 Considering the power relationships of political elites from both camps, it is not surprising that conservative forces won. The Swiss political elite’s anti-communism became a long-term identifying feature from the Russian revolution until the end of the Cold War, according to a historical study by Hug et al.: ‘First and foremost, the influential elites were concerned about combating Bolshevism from 1918 to 1989. Neutrality was never a guideline for the Swiss government toward the Soviet Union and enterprises of the international communist movement. There was only a unified struggle against communism. This was justified by societal policy, Christian culture, and morality. It conferred a certain fanaticism on anti-communism at times and thus contained the risk of endangering any basic values that it wanted to protect.’30 This excerpt alludes to a 1989 scandal concerning secret security risk files, 31 which contributed to the rise of new, vehement domestic policy disputes over Switzerland’s role in the world after the collapse of the Eastern bloc and the related loss of the ‘threat concept’ that had helped create identity and orientation.32 A common enemy had united the nation; when it exited the world stage, it became a case for the history books but it left no understudy. The end of the bipolar world order also revealed the largely functionless nature of armed neutrality.33 This situation – with one Swiss role model irreversibly lost and another badly scratched – resulted in the search for a new place internationally.

18 Theoretical bases But it also led to an increasing lack of orientation among political elites, and even greater disorientation among the general public. From this emerged a national conservative movement in the 1990s. Its representatives, nostalgically calling on ‘special case’ reasoning, rejected any intensified foreign policy commitment for Switzerland. At the same time, a major segment of political elites recognised that Switzerland’s old place in the community of nations had become obsolete. They set about trying to create a new one, sketching an image of a more active country, conscious of new problems arising in an increasingly globalised world and able to assist in solving them as a cooperative partner. The debate over Switzerland’s self-image led to new social conflict between advocates of a politically integrated nation and proponents of isolationism. This conflict in values over a (new) definition of a specifically Swiss self-image manifested itself between political parties as well as between political elites and the electorate. 2.2.3 Economic versus political integration34 As a country poor in natural resources, Switzerland has always depended on trade with other nations and counts itself among the world’s best-integrated states since the advancement of international cooperation at the end of the nineteenth century. Up until the First World War, Switzerland belonged to half of all international organisations; from 1940 on, it belonged to about 40 per cent, and by 1955 it was still represented in 37 per cent. From the 1960s to the 1980s, Switzerland was one of the seven best-integrated states, based on the sum of government or NGO memberships, and it occupied ninth place in 1990.35 The years after the Second World War proved crucial for Swiss economic integration. Switzerland, spared the war’s destruction, emerged from that time with an intact economy, but dependent on exports. High priority was placed on resuming business relationships with Western Europe. The then-director of the Swiss Business Federation, Heinrich Homberger, complained of the difficulty ‘of being seated in a society of sick patients as the only healthy member and always having to decline all requests for aid’.36 In order to benefit from assignments assured by Marshall Plan aid, Switzerland entered the European Payments Union (EPU) and the Organisation for European Economic Cooperation (OEEC). In the OEEC, Switzerland was able to opt out of decisions of which it disapproved, thanks to the so-called ‘Swiss clause’. However, as a founding member of EPU, a supranational agency with comprehensive authority, Switzerland had no escape clause. Thanks to a disproportionately large quota, it gained one of seven director positions.37 Membership also enabled Switzerland to participate in trade liberalisation, including services.38 Switzerland undertook its next economically based step toward integration as a reaction to the founding and continuous development of the European Economic Community (EEC), the breakdown of plans for a OEEC-wide free-trade area, and the transformation of the OEEC into the Organisation for Economic Cooperation and Development (OECD). In November of 1958, the project for an OEEC free-

Role concepts of Swiss foreign policy 19 trade area – favoured by Switzerland and planned as a response to the EEC – broke down. A statement by Swiss Foreign Minister Max Petitpierre (as reported by the Neue Zürcher Zeitung (NZZ), 27 November 1958) showed the importance Switzerland gave to the project: ‘The situation is serious, even very serious. Indeed, one should not exaggerate the gravity. The break is not yet definitive, but time is short.’39 The EEC’s common external tariff with 10 per cent reductions took effect on 1 January 1959, threatening to put Switzerland at a disadvantage. The Federal Council hoped that the founding of the European Free Trade Association (EFTA) in 1960 and the signing of the General Agreement on Tariffs and Trade (GATT) would secure Swiss interests vis-à-vis the EEC – especially since the OEEC lost its status as a purely European organisation in 1961, with its transformation into the OECD and the membership of the USA and Canada. Moreover, Petitpierre asked ‘if one should not use the Council of Europe as an association framework between the Six of the Common Market and the Seven of the European Association?’40 Switzerland had ruled out joining the Council of Europe in 1949, judging it to be too political, not universal and, therefore, incompatible with Swiss neutrality doctrine. However, the reviled Council of Europe now seemed more attractive. In order for Switzerland to counter discriminatory EEC measures in some way, the Federal Council was forced to search for other offsetting solutions. Thus, after Great Britain decided to seek entry, Switzerland sought an association with the EEC while also approaching the multilateral GATT organisation, finally joining it in 1966. The USA consequently lifted 13-year-old tariffs against Swiss watch imports, as Switzerland had finally met American requirements that it become a GATT member and could now take part in multilateral negotiations to reduce trade restrictions.41 To sum up, economic policy interests, not political considerations, largely determined Switzerland’s international commitment. The Federal Council (the Swiss executive) left the electorate unsure of the motivation for and actual amount of cooperation. The consequences of this policy are evident in the massive rejection in 1986 of entry into the UN. Too-frequent airing of public policy on international stages endangered Switzerland’s perception of itself as a nation standing on the sidelines.42 And with their stereotypical reference to neutrality, the elites believed they could remove themselves from accountability for their real activities.43 Business dominance was reflected in the organisation of the federal administration and the position of the Federal Department of Economic Affairs (DEA). The trade division of the DEA and its top managers had played a crucial role in Swiss foreign policy for decades. Key figures included Walter Stucki, between world wars; Jean Hotz during and after the Second World War; a later federal councillor, Hans Schaffner, during the 1950s; and Edwin Stopper and Paul Rudolf Jolles during the 1960s. The trade division was the Confederation’s ‘secret foreign ministry’, at least with regard to the Europe issue,44 and its top managers were the real foreign ministers of Switzerland.45

20 Theoretical bases The Free Democratic Party (FDP) never gave up leadership of the DEA during this time (except for brief interruptions), but the parties heading the other six government departments varied.46 On the other hand, due to the annual rotation of the federal presidency, foreign policy was a matter for the entire Federal Council.47 Since 1920, federal councillors from French or Italian-speaking Switzerland usually headed the DFA, giving the impression that, linguistically, Romands and Ticinese felt at home on the diplomatic stage.48 Since the start of the 1970s, Frenchspeaking Social Democratic Party (SP) federal councillors dominated the DFA, a fact that tended to complicate the domestic anchor of foreign policy in Germanspeaking Switzerland and in the bourgeois camp. The return to a bourgeois party between 1994 and 2002, with two federal councillors of the Christian Democratic People’s Party (CVP), Flavio Cotti and Joseph Deiss, leading the DFA, culminated in the successful UN entry campaign. In 2003, however, Switzerland’s foreign ministry once again became a social-democratic domain, led by Frenchspeaking Micheline Calmy-Rey. It remains to be seen what this change means for the anchorage of foreign policy in conservative parts of German-speaking Switzerland.

2.3 Change in the international setting National role concepts are anchored within a country and form a part of its collective identity, but they are also closely linked to the international setting. They relate to it and, in return, the international community expects each country to play its role accordingly. To judge the current meaning of national role concepts, we must first briefly review international developments. Three processes are important for Switzerland: efforts concerning international security, European integration and globalisation.49 2.3.1 International security after the Cold War The bipolar power-and-pact system collapsed with the end of the Cold War. Since then, the international arena has seemed more complicated and unpredictable. Even if the ‘balance of terror’ (a reference to the limited stability created by assured mutual destruction by nuclear weapons) was anything other than a peaceful state, the international situation was more easily assessed then than it is today. In contrast to multi-polarity, bipolarity was simpler, and the greater concentration of power reduced vulnerability. After the end of the Cold War, neo-realists expected military hostilities to break out on the European continent once again. To prevent this, Mearsheimer advocated a targeted proliferation of nuclear weapons for larger European states, reasoning that the mutual nuclear terror this would cause would contribute to maintaining the ‘stability’ of the Cold War order after the collapse of the Soviet bloc.50 Wars in Europe are actually possible once more, demonstrated in geographically limited regions since the fall of the pact system. However, these are conflicts within

Role concepts of Swiss foreign policy 21 states, not wars between them. The neo-realistic viewpoint was too short-sighted. Europe is not alone; there is a worldwide trend toward increased inner-state conflicts. The SIPRI Yearbook counted a total of fifty-six war-related disputes worldwide from 1990 to 2000.51 Only three of these conflicts were wars between states;52 each of the others resulting from disputes within states. The international community must develop tools and standards for coping with inner-state conflicts; the need is urgent. Of central importance is deciding how to weigh the protection of essential human rights – human security – versus protection of territorial integrity or state sovereignty – national security. Linked to this are issues concerning the relationship between law (including international law) and policy versus the design of international order.53 Domestic conflicts aside, the international community must decide clearly how it wants to use and further develop its tools for peace building. The SIPRI Yearbook 2001 listed a total of fifty-five multilateral peace support operations for 2000. 54 Some twenty-three of them occurred under UN auspices. The other operations were carried out mainly in connection with regional organisations, twelve of them under the leadership of the OSCE.55 2.3.2 European integration Since the end of the Cold War, the EU has devoted itself to a parallel process of widening and deepening. Accession negotiations for fifteen states, an expanded network of association and cooperation agreements, the customs union with Turkey, and the push to develop civil and military crisis management have made the EU the central point of orientation for European states and has confirmed the EU’s leadership in developing the European continent. One should not assume that individual vetoes will have the power to break down institutional reform processes already introduced. Scholars have also taken note of this change. During the 1960s and 1970s, at the outset of the integration process, the dominant academic studies still explored why European states involved themselves with supranational integration.56 Since the 1990s, however, most studies no longer ask ‘Why?’ and ‘How far?’, instead analysing how existing European politics and policies actually function.57 Issues in the foreground include the various functions of multi-level policies (European, national, regional) and the influence of European decisions on national policies: the so-called ‘Europeanisation’ of national politics. The issues have shifted from international relations to comparative politics and public policy. Thus, scholars have noted what has already been the case for a long time: European integration is no longer perceived as an example of specially applied international cooperation, but as a self-contained political community with related attributes and consequences. The primary focus no longer concerns development of polity but of a related policy.58 Developments in foreign, security and defence policy, as well as in the area of civil liberties, arrived supplementally. The latter led to a Charter of Fundamental Rights of the European Union, announced by the heads of state and government

22 Theoretical bases during the Intergovernmental Conference at Nice in December 2000. At the same time, the EU applied the so-called ‘convention procedure’ for the first time: the drafting of a fundamental European document by an assembly of national politicians, NGOs and other civil society circles outside established European institutions. This involvement of other circles in developing and legitimising European integration created an important precedent. The convention procedure is also used in preparation of the Intergovernmental Conference in 2003. In the area of peace building and crisis management, the EU was finally entrusted with extensive authority and resources, with the goal of becoming the area’s leading civilian institution and – alongside NATO – the leader in the continent’s military interests as well. 2.3.3 Globalisation We have adopted Giddens’ view of globalisation: ‘the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa’.59 Thus, national borders are no longer the primary determinants of policy. McGrew observed a ‘stretching’, ‘deepening’ and ‘broadening’ of political processes.60 Certain decisions can have worldwide consequences and, likewise, global decisions may be felt deeply at the local level. New issues and new actors gain access to the international arena, thus increasing the degree of interaction and networking between and within states and societies.61 The world has become denser and awareness of this has intensified.62 The meaning of states as political actors, though important, is now relative, thanks to actors such as international organisations, NGOs and transnational enterprises. Interaction between the state and business is more complex than is assumed by most theories on the ‘decline of politics’ in the era of globalisation.63 Globalisation does not exert uniform pressure to deregulate. But the relative increase in various fields in the intensity and range of trans-border exchange and production processes does not necessarily lead to political spheres that promote global government. According to Max Weber, social action assumes a subjective sense of belonging together that expresses itself in common values, norms, and objects of identification.64 Individuals often can see the numerous changes occurring in connection with globalisation, and many have strengthened the call for political reaction. Consciousness of global connections and their political significance has risen.65 However, the proper tools and concepts for political implementation are still missing. Governance as ‘governing without government’66 has, indeed, led to a variety of interesting theoretical discussions – but to very few enlightening new tools for policy design in the ‘de-bordered areas’ of globalisation. 67 Awareness of the need for collective action should not be confused with the ability to do it.68 To be sure, public and private actors at the global, regional, state and substate levels are building up and expanding means for consultation. Increasingly transnational political networks have also emerged in selected sectors, encouraged and

Role concepts of Swiss foreign policy 23 promoted in part by international institutions such as the World Bank and the European Commission. However, although such initiatives may lead to strengthened partnership for political action, this may not compensate qualitatively for the lack of democratic legitimacy. For this reason, nation-states remain the most important political actors in implementing standards and decisions, as well as in legitimising them democratically.

2.4 The impact of change on Switzerland’s role concepts We have presented the three most compelling historic components of Swiss foreign policy: neutrality, anti-communism and economic integration. After the Second World War and during the Cold War, government decision-makers elevated the value of neutrality at home and linked it to independence. The general population accepted this, thanks in part to the collective experience of being spared the devastation of the Second World War. Neutrality, allied with marked anti-communism, was seen as a way to defend against presumed threats to independence – whether from the East or from international organisations. Elites could pursue business interests under this cover. However, they remained silent about the actual degree of economic – and political – ties Switzerland had with the West. The public was not aware of business’s leading role in foreign policy. The discrepancy between real international cooperation and justification of this policy at home increasingly limited the Federal Council’s freedom to act. This became especially evident after the fall of the Wall, as the unparalleled changes in the international framework removed Switzerland’s justification for remaining on the sidelines. The change in international relations at the end of the Cold War pointed to an ongoing sharp rise in importance for foreign policy conducted multilaterally, as opposed to traditional bilateral relations. Both the search for new international principles of order and the political handling of globalisation demand a collective political approach; increasingly, this is taking place. This applies to an even higher degree to Europe, where the political community of EU countries continues to develop and integrate. Nation-states remain the most important actors, but the setting in which they pursue and enforce their interests has changed. For small states (i.e. states regarded as ‘small’ due to the relatively small size of their territory and population) the changed international setting offers a chance to break out of their ‘smallness’. The attributes that define them as small nations have, admittedly, remained unchanged, but they have lost their relevance for foreign and security policy. There are more small states today (nine have emerged in Europe since the end of the Cold War);69 when measured by census figures, two-thirds of European countries are small states. In contrast to the past, when countries basically had one choice – either to belong to an alliance or to remain neutral – nations today can choose from a broader spectrum of national role concepts. Structural changes, such as the altered relevance of various power dimensions,70 regional integration processes and cooperative security efforts, enable countries

24 Theoretical bases to develop strategies that simplify the protection of their interests – whether via negotiation processes71 or as bridge builders or mediators.72 The diversity of national role concepts not only allows countries to increase their influence, but also to improve the safeguarding of their sovereignty.73 Even though the principle of equal sovereignty of all states is anchored in international law, in the past the sovereignty of small states was more often abused than that of more powerful states.74 Linked to this is a loss of significance for conventional foreign and security policy concepts. In Switzerland’s case, this loss affects neutrality in particular. Neutrality had an eminent realistic raison d’être. Surrounded by larger states that supported and demanded the right to engage in war, Switzerland’s neutrality reserved its right to ‘renounce war’. Yet, neutrality also implies an idealistic component: the rejection of war as a means to resolve conflicts. This dimension – also to be seen as detached from neutrality – has not suffered over time.75

Box 2.2 Myths The notion that role images and myths can be justified and are entirely adaptable was illustrated during a state visit by Czech President Vaclav Havel to Switzerland during the summer of 2001. Havel made a special request to visit the Rütli meadow.76 He chose the meadow as his place to witness and pay tribute to the centuries-old statehood of Switzerland and its roots. The then-President of the Confederation, Moritz Leuenberger (a social democrat), had never visited the Rütli before but was very much aware of the value a state visit would have for Switzerland’s own image. In his address, he admitted having had ‘difficulty’ with Havel’s request. He did not want a ‘Rütli-like Switzerland’ to symbolise his presidency. Rütli conjured up a Switzerland ‘that closes itself off and preserves old myths’. Leuenberger recalled Havel’s maxim ‘to live in truth’; this also applies to Switzerland, he asserted. Those here who are sealed off must be ready ‘to examine myths critically’, and those seeking to make the country more open must be prepared to confront myths and traditions and ‘discover their values’. Leuenberger discovered new starting points in the Federal Charter for a ‘Rütli of today’. The challenge there was neither to turn away nor seal off, but ‘to give peace orders lasting validity’. Meanwhile, peace and security in Switzerland have been interwoven with peace and security in Europe and throughout the world. Hence, wars, violations of human rights, and environmental damage elsewhere concern Switzerland. ‘The beginning of the Federal Charter and the UN charter are very similar in their basic content’, said Leuenberger. ‘Today the three co-founders of the Swiss Confederation would swear allegiance to the UN human-rights pacts and the Kyoto environmental protocol.’ Thus, the federal councillor

Role concepts of Swiss foreign policy 25 concluded, he could see the Rütli ‘as a symbol of my home country. Vaclav Havel, you have given the Rütli back to me’. Sources: Der Bund, 30 June 2001, p. 16 and NZZ, 30 June 2001, p. 14 (own translations from German originals).

Summary The theory of role concepts assumes that national elites define the role of their states in the international setting. These role concepts contain notions of the image that a particular society has of itself, and they form part of the national identity. On the other hand, role concepts also reflect expectations that other states hold for a particular country. Core elements of Swiss foreign policy after the Second World War included a narrowly conceived neutrality policy, an anti-communist stance with which Switzerland clearly positioned itself in the western bloc, and an integration policy dominated by business interests. The Swiss government justified its actions to the electorate beforehand through neutrality policy considerations. It remained silent about the actual degree of Switzerland’s international involvement. The change in international relations after 1989 – especially the search for a new world order, the dynamics of European integration, and increasing globalisation – made this contradiction obvious and restricted the government’s flexibility. The discrepancy between the stance it had taken toward the international environment and the justification of this policy at home had become too great, thus undermining the legitimising function of role concepts for foreign policy.

Part II

Institutions and decision-making processes

3

Institutional bases

This chapter examines the institutional bases of foreign policy, focusing first on the political actors who shape foreign policy according to the Swiss constitutional order, and then on potential reforms.

3.1 Federal and cantonal institutions in foreign policy The Federal Constitution (FC)1 states in Art. 54, §1 that foreign relations are a federal matter. In connection with Art. 3 FC, which defines areas of cantonal sovereignty (areas not limited by the federal constitution), a clear vertical division of authority is evident: the federal government alone is responsible for conducting foreign policy. According to Linder, this contrasts with the Swiss tradition of non-centralised government.2 Other federally organised states (e.g. the USA, Germany, Austria and Belgium) face this contradiction as well. Yet, while the USA, Germany and Austria have relegated foreign relations to the central government, Belgium’s means of conducting foreign policy is unique throughout the world.3 Regional legislatures must first approve any international treaty falling within the domestic authority of a Belgian region before the central government can ratify it. How do the Swiss federal government and cantons approach foreign policy representation? Does Switzerland involve the cantons in foreign policy? Switzerland would not be Switzerland if foreign policy did not reflect federalism. Art. 54, § 3 FC states that the federal government will consider the powers of the cantons and protect their interests when it conducts foreign policy. Art. 55 and 56 FC consider in detail the role of the cantons in formulating foreign policy, as well as the possibility of the cantons themselves conducting low-ranking foreign policy matters. Art. 55 FC states: Article 55 Cantonal Participation in External Policy Decisions 1 The Cantons shall be associated with the preparation of those decisions on foreign policy which concern or affect their powers or their essential interests. 2 The Confederation shall inform the Cantons fully and in good time, and shall consult them.

30 Institutions and decision-making processes 3 The recommendations of the Cantons shall be given particular weight when their responsibilities are involved. In such cases, the Cantons will be associated with international negotiations in an appropriate manner. This cooperation clause mainly serves to reduce the number of arenas in which authorities responsible for cantonal domestic policy confront federal authorities in the foreign policy sphere. Art. 55 keeps centralism from creeping into the federal state structure via foreign policy. Based on this article, a federal law on cantonal cooperation in federal foreign policy (LCC) took effect in 2000.4 Yet, when compared to the constitutional article, Art. 55 hardly contains innovations; it simply offers specifics on three essential elements: information, hearings and cooperation.5 Nevertheless, the importance of the constitutional article and the LCC lies in their origins: both originated in the EEA negotiations at the beginning of the 1990s, when the cantons felt insufficiently informed about topics of negotiation in their own areas of domestic authority. Consequently, the cantons called for earlier sharing of information and improved cooperation. In particular, the Conference of Cantonal Governments (CCG) pressed for institutionalising the flow of cooperative measures in foreign policy. A new feature of the LCC requires the federal government to justify its decisions if it plans actions that run counter to cantonal opinions. The LCC indirectly strengthens and legitimises the CCG, whose rules permit publishing an opinion held by a qualified majority of the cantons (eighteen of twenty-six). In addition to the rights for information, hearings and cooperation, the LCC guarantees the cantons the traditional tools necessary for domestic policy to influence foreign policy. •

•

The Conference of Cantonal Governments (CCG). Established in 1993 after the EEA negotiations, the CCG seeks to assure cantonal cooperation with the federal government and coordinated decision-making among the cantons.6 It is not specifically the foreign- or European-policy body for the cantons, but seeks influence at the federal level when the agenda includes fundamental, cross-sectional topics regarding the federalist system.7 At these times, the CCG seeks to enhance cantonal influence via early, united positions vis-à-vis the federal government. All twenty-six cantons belong to the CCG; decisions require a qualified majority of eighteen cantons.8 The CCG dispatches its own staff (financed by the cantons) to join important federal projects and departments (e.g. in the Integration Office which is responsible for European policy), thus enhancing its influence. Even the EU headquarters in Brussels hosts a CCG information contact. The Consultation Procedure. The cantons have the power to influence important foreign policy decisions during the pre-parliamentary consultation process (Art. 147 FC).9 However, the consultation process on foreign policy issues receives lower priority than domestic policy proposals, since it merely influences the federal government’s negotiation position, not the international negotiations themselves.

Institutional bases 31 • •

•

•

•

The Cantonal Petition to Parliament. The cantonal petition to parliament reflects the cantons’ right to submit legislative proposals (Art. 160 FC). The Council of States. Although often referred to as the ‘cantons’ chamber’, representation of ‘cantonal interests’ is a matter of second priority for councillors. Since councillors today are elected directly by majority vote (except in the canton of Jura, where proportional rule applies), the Council of States actually amounts to a second people’s chamber. Like members of the larger chamber, those in the Council of States vote without instructions; their political stance is independent from the cantonal governments and legislatures (Art. 161 FC). Nevertheless, the Council of States has an important federalist function.10 The same number of councillors, who often are former or incumbent members of the cantonal executive branch, represents each canton, regardless of size and population.11 The Majority Vote of Cantons. Votes on specifically formulated popular initiatives (Art. 139, § 5 FC) and mandatory referenda 12 (Art. 140, § 1 FC) require a double majority (the majority of the electorate and of the cantons) for approval. This need for a majority of the cantons affects the policymaking process, as groups consider and attempt to anticipate cantonal interests in order to increase a proposal’s chances for passage by the electorate.13 The Cantons’ Right to Call for a Referendum. A group of eight cantons (any eight) can demand a referendum, as long as the matter in question qualifies (Art. 141, § 1 FC). To date, the cantons’ right to call for a referendum has never been exercised. Cooperative Federalism. The cantons have substantial room for manoeuvre after completion of the legislative process. Since, in many policy areas, enforcement of laws lies in the cantons’ hands, various opportunities emerge for the cantons themselves to interpret a law or decide its enforcement. This also applies when implementing international law or adapting Swiss standards to international treaties.14

The cantons have more than just the option of influencing the fate of federal foreign policy; they can also carry out their own foreign policy, within a limited scope (socalled low-ranking foreign policy). Art. 56 of the federal constitution contains the conditions: Article 56 Cantonal Relations with Foreign Countries 1 The Cantons may conclude treaties with foreign countries in those fields within their remit. 2 These treaties may not be contrary to the law, nor to the interests of the Confederation, nor to the laws of other Cantons. Before concluding a treaty, the Cantons must inform the Confederation. 3 The Cantons may deal directly with lower-ranking foreign authorities; in other cases, cantonal relations with foreign countries shall be conducted by the Confederation, acting on their behalf.

32 Institutions and decision-making processes In practice, this means that the cantons may enter into treaties directly with foreign local and regional bodies on matters falling under the cantons’ domestic authority. These treaties must not conflict with either federal law or with the laws of other cantons; this applies to purely domestic agreements, too. Important, though too seldom observed, is the stipulation that any treaty, before being entered, must be brought to the attention of the federal government. According to a random sample by Wildhaber, more than half of trans-border pacts entered by the cantons had neither been published by the cantons nor brought to the notice of the federal government.15 Border cantons in particular have made notable use of low-ranking foreign policy, thus successfully gaining crucial trans-border cooperation in various areas, especially technical administration. There are numerous examples, from projects employing joint water supply or coordinated public transport systems, to comprehensive approaches for developing regional identities and trans-border institutions. Meanwhile, border cantons and their immediate foreign neighbours have achieved a substantial degree of micro-integration.16 Low-ranking foreign policy has proved to be a sensible arrangement, complementing the federal foreign policy and serving the old federalist concept of self-determination. Nevertheless, it remains an exceptional phenomenon in Swiss foreign policy. As Pfisterer asserts, the traditional self-determining function of federalism within the foreign policy sphere must be replaced by a federalism focusing on cooperation and governance.17 The cantons have already recognised this, as shown by the founding of the CCG (an expression of federalism in governance) and the LCC (representing stronger cooperation in federalism).

3.2 Federal Council and Parliament in foreign policy 3.2.1 Differentiation between executive and legislative branches In contrast to the vertical division of authority between the federal government and the cantons, horizontal division of authority addresses how federal bodies share authority for foreign policy. Which foreign policy tasks are assumed by the executive branch (Federal Council and its administration) and Parliament (National Council and Council of States)? Operational leadership of foreign policy comes from the Federal Council and its administration; that is, they represent Switzerland in international negotiations, determine the goals and means of Swiss foreign policy and assure coordination of foreign policy. These tasks are defined in the federal constitution in Art. 180 and 184: Article 180 Government Policy 1 The Federal Council shall determine the aims and means of its governmental policy. It shall plan and coordinate the activities of the state. 2...

Institutional bases 33 Article 184 Foreign Relations 1 The Federal Council is responsible for foreign affairs subject to the Federal Assembly’s rights of participation; it shall represent Switzerland abroad. 2 It shall sign and ratify treaties. It shall submit them to the Federal Assembly for approval. 3 When the defence of the country’s interests of the country so requires, the Federal Council may issue ordinances and take all necessary decisions. Such ordinances must have a definite expiry date. However, the constitution does not explicitly delineate the Federal Council and Parliament’s spheres of authority. Thus, similar formulations regarding the Federal Assembly’s18 authority for foreign policy appear in Art. 166 FC: Article 166 Foreign Relations and International Treaties 1 The Federal Assembly shall participate in shaping foreign policy and shall supervise foreign relations. 2 It shall approve international treaties with the exception of those which, by statute law or international treaty, are within the powers of the Federal Council. Parliament ‘participates’ in shaping foreign policy, ‘supervising’ the executive branch. In all other policy areas it is taken for granted that Parliament participates in policymaking and, ultimately, in supervising the Federal Council and its administrative offices. Why then this special formulation for foreign policy? Chapter 1 of this book provided an overview of foreign policy theory, including the classical view, which understands foreign policy to be the realm of the executive branch and grants parliaments only a minor role in foreign relations. However, members of Parliament have grown increasingly interested in foreign policy in recent years, in part because foreign policy decisions have an increasingly powerful impact on domestic policies and politics. Thus the division between legitimising in a democratic manner and the ability to act, achieve goals and remain credible.19 Swiss foreign policy has established itself as a sphere that allows a breach in the separation of powers: ‘Therefore, in the foreign policy area, it is the intent of the federal constitution to create competing and overlapping responsibilities and to lead the executive branch and Parliament to lasting cooperation and coordination.’20 In order to understand better the extent to which both chambers of Parliament involve themselves in Swiss foreign affairs, it is necessary to examine the law regulating how business is conducted between the National Council and the Council of States (LCB).21 Since 1992 it has contained detailed regulations on the two chambers’ joint decision-making on foreign policy: Article 47 bis a (LCB)22 1 Both chambers pursue international development and monitor Swiss negotiations with foreign states and international organisations.

34 Institutions and decision-making processes 2 The Federal Council informs the presiding officers of the chambers as well as the foreign policy committees regularly and in a timely and comprehensive manner on foreign policy developments, plans in connection with international organisations, and on negotiations with foreign countries. 3 In case of negotiations within international organisations that lead to decisions through which law effective in Switzerland is or must be created, the Federal Council consults the foreign policy committees on guidelines for the negotiating position before it defines or amends it. 4 The committees can call the Federal Council’s attention to their opinions on the guidelines for the negotiating position. The Federal Council informs the committees of the course of negotiations. 5 Paragraphs 3 and 4 on request by the responsible committees also apply logically to negotiations with foreign states or international organisations on international treaties. 6 The committees inform other standing committees of matters that affect their duty areas. The other standing committees are involved in the consultations. The committee chairs coordinate the work. Article 47 bis b (LCB)23 1 The Federal Assembly approves international treaties. 2 The Federal Council can conclude international treaties on its own as long as it is empowered to by a federal law or an international treaty approved by the Federal Assembly. 3 It can also conclude international treaties of limited scope on its own. Examples of such treaties are those which: (a) create no new obligations for Switzerland or result in no waiver of existing rights; (b) serve to enforce treaties that have been approved by the Federal Assembly; (c) affect subjects that fall into the Federal Council’s scope of responsibility and for which a regulation is indicated in the form of international treaty; (d) apply mainly to authorities, regulate issues of technical administration, or result in no significant financial costs. 4 The Federal Council can delegate authority to conclude international treaties to a department. In case of treaties of limited scope, it can also delegate this authority to a federal office. 5 It reports to the Federal Assembly annually on the treaties concluded by it, by departments or federal offices. Much of Parliament’s joint decision-making on foreign policy develops in the federal chambers’ foreign policy committees. The decision to set up permanent foreign policy committees occurred in 1945, when Parliament sought to secure improved joint decision-making in the Federal Council’s foreign policy. Moreover, the revision of 1992 (see above) led to expanded rights to early information, consultation, and joint decision-making. However, foreign policy committees cannot

Institutional bases 35 give the Federal Council binding instructions. Therefore, these regulations aim not to challenge the separation of powers but to promote ‘intensive dialog’ between Parliament and the executive branch.24 The floors of Parliament typically become involved only when the Federal Assembly must approve a state treaty concluded by the executive branch. It follows from Art. 166 FC and Art. 47 LCB that not all treaties involving international law must automatically be submitted to Parliament for approval. In fact, a majority of state treaties never pass through Parliament, and most are never made public.25 3.2.2 Structure and organisation of the Swiss Federal Department of Foreign Affairs (DFA) It would be logical to assume that the Federal Department of Foreign Affairs (DFA) is the federal body responsible for ‘making’ Swiss foreign policy, but the DFA has never been the sole protector of Swiss interests abroad. Although by definition the DFA is the federal body concerned with foreign relations, the specialised areas reserved exclusively for the DFA in the in-house administrative decision-making process are dwindling. In fact, responsibility for Switzerland’s most important field of foreign policy activity, foreign economic affairs, has always26 rested with the Department of Economic Affairs (DEA), not the DFA (see subsection 2.2). Even international development plays a role in foreign policy development, as it produces more and more parallels and connections between domestic and foreign policy. Take, for example, international environmental policy, which has gained enormous importance since the 1970s. It has strengthened the foreign policy activity of the Swiss Federal Department of Environment, Transport, Energy, and Communications (ETEC) and the Swiss Agency for the Environment, Forests and Landscape (SAEFL). Hardly a federal office, let alone a department, can assert today that it has had no influence on foreign policy activities. For such decentralised foreign policy development to be coherent, coordination and cooperation among the various administration agencies clearly is needed (see chapter 9). Thus, the DFA’s two major tasks and challenges today are coordination and joint formulation of foreign policy.27 Although foreign policy development is not its exclusive domain, from a historic perspective, the DFA has nonetheless developed impressively. The foreign affairs department employed only a few officers at the turn of the twentieth century; Switzerland hardly cultivated foreign relations, and department leadership was of secondary importance to the annually rotating president of the confederation. In contrast, the threads of foreign policy converge today in a much more professionally organised DFA,28 which now employs 2,700 staff members worldwide, 900 of them in Switzerland. This figure alone justifies a brief glimpse at its internal structures (see Figure 3.1). Three directorates form the DFA’s organisational backbone: •

The Directorate of Political Affairs consists of political divisions (PD) I to VI, as well as the Integration Office, which is led jointly with the Swiss Department

Integration Office (DFA/DEA)

Political Affairs Division IIc The Americas

Political Affairs Division IIb Asia-Pacific

Political Affairs Division IIa Africa/Middle East

Political Affairs Division I Europe, Council of Europe

Political Affairs Division VI Swiss Abroad

Political Affairs Division V Economic and Financial Affairs

Political Affairs Division IV Human Security, Peace, Human Rights, Humanitarian Policy

Political Affairs Division III UN, International Organisations, Environment, Cultural Affairs, e-Envoy

Presence Switzerland

Political Affairs Directorate

Centre for International Security Policy

Directorate of International Law

Protocol

Swiss Maritime Navigation Office

Service for Administrative Appeals to the Department

Treaties, Transfrontier Relations and Communications

Division Thematic and Technical Resources

Division Humanitarian Aid and SHA

Division Development Policy, Planning and Multilateral Co-operation

Division Corporate Services

Division for Co-operation with Eastern Europe and the CIS

Division Bilateral Development Co-operation

Swiss Agency for Development and Co-operation (SDC)

Centre for Analysis and Prospective Studies

General Secretariat

International Law, Human Rights and Inernational Humanitarian Law

Figure 3.1 Organisational structure of the DFA (as of January 2002)

Permanent Mission to WTO and EFTA (ECE/UN, UNCTAD, ITC)

Permanent Missions to the International Organisations in Geneva

Diplomatic and Consular Missions Abroad

Diplomatic Inspectorate

State Secretary

Head of Department

Institutional bases 37

•

•

of Economic Affairs and looks after relations with the EU. Political divisions I and II a–c mostly take a country-specific bilateral approach (including maintenance of Swiss embassies abroad), while PD III is responsible for Swiss policy in multilateral organisations (with the exception of Europe), as well as environmental and cultural issues. Peace and human rights policy fall under the purview of PD IV, while divisions V and VI address economic and financial issues, and issues affecting Swiss abroad (consular protection). The Directorate for International Law, which, among other charges, places high priority on neutrality law issues and the Geneva human rights conventions. The Swiss Agency for Development and Cooperation (SDC) is responsible for broad sections of Swiss development cooperation and humanitarian aid. Of all directorates, the SDC possesses the most comprehensive financial resources and appears very independent to the outside world. About 70 per cent of the total DFA budget goes to the SDC. However, in a formal sense, the SDC cannot demand higher priority per se than the other directorates (see chapter 7).

As already mentioned, the DEA and the State Secretariat for Economic Affairs (SECO) set the major portion of economic affairs policy. When the responsibilities of the DFA and the SECO overlap, tasks are shared (i.e. policies toward Europe or development cooperation). Thus, the two bodies share responsibility for the Integration Office and for setting Swiss policy regarding the WTO, World Bank and International Monetary Fund.

3.3 Participation of the electorate in foreign policy In principle, Swiss foreign policy is a federal matter carried out within federal bodies, particularly by the executive branch. In this respect, Swiss foreign policy follows international customs. But Switzerland is a direct democracy and this makes Swiss foreign relations unique. Thanks to the federal constitution, Swiss voters have tools for making their influence felt. The following sections briefly explain them. 3.3.1 Popular initiative Constitutional references to popular initiative fail to distinguish between domestic and foreign policy content. Therefore, the same rules and restrictions apply whether petitioning for a referendum on foreign policy issues or for domestic matters (100,000 signatures gathered within an 18-month period). While the federal constitution mentions no topical restrictions, initiative organisers must preserve unity of form and of subject matter.29 Moreover, the Federal Assembly can declare invalid any initiative found to violate international law (Art. 139 § 2 FC). If an initiative comes to a vote, passage requires acceptance by both a majority of voters and of cantons. The initiative on UN entry is the most recent example of a popular

38 Institutions and decision-making processes initiative with foreign policy content. It was accepted in March of 2002 by 54.6 per cent of voters and by a narrow majority of twelve v. eleven cantons. 3.3.2 Mandatory referendum on international treaties Different rules apply for referenda. The constitution addresses the form but not the specific content of a proposition. That is, regulations governing referenda on international treaties do not apply to all proposals affecting foreign policy but only to those addressing the form of an international treaty. Art. 140 § 1 (b) FC, requires a mandatory referendum when a proposal seeks Switzerland’s entry into an organisation for collective security (e.g. the UN or NATO) or a supranational community (e.g. the EU).30 For passage, the mandatory referendum on international treaties requires the majority of both the people and the cantons. A mandatory referendum has occurred only once, with the first proposal for UN entry in 1986. The criteria would have also applied in 2002, for the second vote on UN entry, but the proposal was submitted as a popular initiative and so already required a double majority (see above). Discussion continues as to whether the Federal Assembly can arrange a mandatory referendum on its own. The federal constitution does not address this but, in practice, it has happened several times already (e.g. before entering the League of Nations in 1920 and when considering the EC Free Trade Agreement of 1972).31 Yet during the constitutional revision of 1999 Parliament rejected a proposal that would have formally granted the Federal Assembly this right (Rhinow 2000: 381). 3.3.3 Optional referendum on international treaties The optional referendum on international treaties requires only a popular majority for passage. It is the counterpart to the domestic policy referendum on federal laws, subject to the same formal rules (50,000 signatures within 100 days). However, the constitution does not subject all state treaties to the optional referendum. Art. 141 § 1 (d) FC states that international treaties may come to such a plebiscite if they: 1 2 3

are of unlimited duration and may not be terminated, or provide for the entry into an international organisation, or contain important provisions which create binding legal rules or require the adoption of federal law in order to become effective.32

The optional referendum on international treaties has seldom been used since its introduction in 1921. From 1921 to 1977, some fifty-seven proposals qualified for an optional referendum on international treaties, yet only three reached the ballot; two of these international treaties failed. But neither the EFTA treaty nor entry into the European Human Rights Convention was subjected to a referendum. Between 1977 (when the scope of application for the optional referendum was

Institutional bases 39 expanded) and 1994, only one of 62 issues was controversial enough to force a referendum: entry into the Bretton Woods institutions. Plebiscites were mandatory for entry into the UN and the EEA.33 3.3.4 Referendum on domestic affairs The influence of direct democracy is not restricted to referenda affecting international treaties. Foreign policy very often appears as normal federal law or its revision. Propositions that refer to foreign policy often lack the format of an international treaty, as shown in June 2001 by the most recent revision of federal law, regarding organisational aspects of the military, as well as in the 1994 bluehelmet proposal and the 1994 ban on racial discrimination. For this reason, limiting or extending the referendum on international treaties might impact the popular influence on foreign policy less than would be expected.34 Yet we expect the importance of popular initiatives and statutory referenda in formulating foreign policy to rise,35 as evidenced by initiatives to protect the Alps from transit traffic, against foreign immigration, and for (or against) entry into the EU and the UN (each of which qualified for the ballot in the last ten years). As a consequence of this ‘internalising’ of foreign policy topics, tensions between foreign policy and direct democracy increasingly have shifted away from the international treaty level to a lower level of domestic enforcement.36 In many cases, domestic enforcement is subject to the same direct-democracy process as domestic policy.37

3.4 Individual citizens in state treaty law 3.4.1 How does international law become national law? In all democratic countries, treaties concluded at the international level and signed by corresponding state representatives are first subjected to a domestic acceptance process before they can be ratified by the executive branch and become binding under international law. But specific structures of the domestic acceptance process vary from country to country. One typically distinguishes in theory between countries that follow so-called ‘monism’ and those following dualistic concepts. Under monism, the responsible body (usually Parliament) approves the treaty and with that approval it automatically becomes national law. Under dualism, the treaty is not binding until it has been reformulated into national law by a specific institution. Switzerland traditionally follows monism. Treaties affecting international law, which Parliament or the executive branch have approved, thus retain their legal form and do not become federal law. This means that domestic courts can apply the treaty after it takes effect. Hence, international law takes fundamental priority over domestic law. The only exception arises when the Swiss Parliament passes a federal law with the intent of violating an international legal norm (but not a peremptory norm of international law!).38 If domestic laws conflict with

40 Institutions and decision-making processes international regulations, Swiss courts first seek an interpretation of national law that conforms to international law before a case-related non-application of the national regulation (but never a decree of nullity) becomes the ultima ratio. Switzerland thus practices ‘moderated’ monism, so-called because of its cautious dealing with national law.39 3.4.2 How can individuals identify their rights in an international treaty? Switzerland’s approval and ratification of an international treaty does not automatically give individual residents the right to go to court over the document’s precise wording. Treaties affecting international standards can take immediate effect when they are sufficiently specific and clear as to form the basis of a decision in a single case.40 But international treaties often contain purely programmatic comments or address themselves exclusively to national legislators who have the task of enacting them into law. Because they are so vague, such passages cannot be appealed in court. Switzerland often enters a dual obligation when it concludes a treaty affecting international law. If the treaty’s standards are sufficiently specific, individual residents are bound by it. Yet an international treaty always results in an international tie as well; that is, conclusion of the treaty means Switzerland has a responsibility toward the other parties to the treaty. Switzerland is obligated to undertake the steps necessary to enforce it. This follows a principle of international law, pacta sunt servanda (treaties are to be kept).

3.5 Outlook and reform proposals 3.5.1 Reform of the optional referendum on international treaties The meaning and purpose of the referendum on international treaties is to broaden the scope of legitimacy in foreign policy. The traditional essence of the Swiss political system – the mandatory popular vote on constitutional amendments and the optional vote on federal laws and federal decrees subject to referenda – should also apply to foreign policy. International pacts with far-reaching consequences should be subject to the mandatory referendum, just as constitutional amendments are in domestic politics. According to the current version of the mandatory referendum on international treaties, this applies to Swiss entry into supranational communities or organisations entrusted with collective security. Less important but still notable foreign policy proposals should be subject to the optional referendum, just as federal laws and decrees are. Criteria in Art. 141 § 1 (d) FC define this group of international treaties. Less important are treaties that affect international law but that fall under neither of these categories. They are not subject to a referendum, but are accorded a status analogous to domestic ordinances or simple federal decrees.

Institutional bases 41 As mentioned in subsection 3.3, the constitutional amendment of February 2003 was a further step toward the convergence of foreign policy and domestic policy decision-making on the electoral level. For those advocating monitored expansion of direct democracy, the amendment was a success, since in practice the former criteria for the optional referendum had at times failed to subject all-important international treaties to referendum from the outset. The NRP 42 study by Cottier et al. played an important role in the amendment process, formulating suggestions on how to revise the optional referendum on international treaties.41 The wording of the new Art. 141, § 1 (d) FC closely approximates Cottier’s suggestion. Some critics of the right to demand referenda say they can be initiated too rashly and generally favour the status quo,42 or that their specific application to foreign policy elicits scepticism because they usually exact higher political costs than in domestic politics.43 Rhinow does not actually want to abolish direct democracy from foreign policy entirely, but if it expands without differentiation he foresees problems since modern foreign policy is less concerned with sovereignty and selfdetermination than with cooperation. Moreover, the electorate’s opportunity to reverse its decisions at any time adapts well to domestic politics. This becomes viable in foreign policy only at a high political cost. Therefore, debate on a ‘reasonable’ dose of direct democracy in foreign policy leads to the previously mentioned tension between democratic legitimacy of action in foreign policy and the need for flexibility and credibility at the international level. Even if this dilemma is not confined either to foreign policy or to direct democracy, foreign policy-related difficulties may result: Switzerland is but one participant among many in international negotiations, and other states have their own domestic policy quirks. Thus, the risk that a treaty may later be rejected comes from the democratic requirement that domestic policy legitimise foreign policy. It does not result from voting rights. 3.5.2 Outlook on Europe The impact on Swiss political institutions of (potential) entry into the EU is a recurring theme in Swiss politics.44 It is indisputable that EU entry would mean giving up some degree of national autonomy in exchange for increased participation and influence at the European level. To some extent, it would amount to an exchange of sovereignty: bargaining away legal authority in return for influence over other countries’ policies.45 Whether the new scope of influence could, in this case, offset the old right to action remains an issue for political evaluation. The extent to which EU entry would force reform of institutional foundations is also debatable. Would EU entry cause government reform? Would Parliament need new tools to avoid being sidelined? Are today’s direct-democratic tools enough to stop the loss of legitimacy in foreign policy? Or does the direct-democratic legitimisation of domestic policy imperil even foreign policy credibility? An overview of scholarly positions on these issues enables us to distinguish between three essentially different value-related attitudes.46

42 Institutions and decision-making processes The traditional law school argues chiefly from a European legal viewpoint and aims for stable functioning of the legal system.47 From this perspective, any obstacles should be removed as soon as possible by designing the Swiss system to be ‘compatible with Europe’ on all essential points. The most important points concern limitations on referendum (if it involves enforcement of European law), the cancellation of popular initiatives out of line with EU policy, and government reform to offset the need for the executive to attend more EU meetings.48 The framework of NRP 42 opinions represented by Epiney and Siegwart and Epiney et al. have a less legalistic tone.49 They, too, focus on guaranteeing the acceptance of EU law as a consequence of entry, yet they take a more moderate position by acknowledging the ability of direct democracy to help establish identity. They recommend changes in the current system only when absolutely necessary, thus avoiding a fundamental restructuring of direct democracy. According to their line of thought, the right to referendum would be reduced only when to implement EU law would leave Parliament no room for its own adaptations. Even the cancellation of initiatives (declaration of nullity) out of line with EU policy could follow the same flexible approach as practised in the past, in their opinion. Yet, in such cases, they do not challenge the general principle behind declaring non-conforming initiatives null. Epiney et al. lay high priority on reforming the relationship between Parliament and the executive branch.50 They advocate creating parliamentary committees on Europe that would function as the starting point for considering EU proposals and would ensure coordination among specialised parliamentary committees on European policy matters. The government would be required to keep Parliament comprehensively informed in order to prevent it from becoming further marginalised. New means would also be introduced for joint decision-making of Federal Council policy at the European level. Representatives of the cantons also argue from a highly juridical perspective.51 However, in contrast to Epiney et al., they pursue a dual agenda. On one hand, they accept the overriding position of European law as a consequence of EU entry, yet they also stress the need for more internal institutional reforms. (As a footnote, the cantons aim to offset any loss of decision-making flexibility.) Advocates of a primarily reform-oriented approach see EU entry as a means to an end: a welcome catalyst for institutional reforms they consider long overdue, even for purely domestic policy reasons.52 They criticise the braking and consensusforcing impact of voting rights in their current form. The reforms they would like realised if Switzerland enters the EU are extremely radical and assume a total rebuilding of Switzerland’s political system. Germann demands the introduction of a permanent federal president or prime minister, in response to a continuing need for representation on the European Council.53 He also calls for expanding the number of federal councillors, to overcome the work burden caused by Council of Ministers meetings. In addition, he seeks a new concept of direct democracy that raises the hurdle for popular initiatives, as well as abolition of the optional referendum, a fundamental reform of federalism to reduce cantonal influence in federal legislation, and a medium-

Institutional bases 43 term transition from a concordance system to a competitive one. EU entry should provide the motivation necessary for these changes. Supporters of a notably pragmatic line, who calmly look forward to EU entry, take a diametrically opposite position.54 In response to institutional pressures arising from EU entry, they take a minimalist view, for various reasons. Yet all believe that the impact of a temporary contradiction between Swiss and European law would be far less serious than it appears from a legal standpoint. National law and European law may also conflict – particularly if the national law is enacted by a plebiscite. Many EU member states are years behind schedule in implementing regulations stemming from EU law, sometimes consciously opposing their incorporation into national laws. Adapting formal direct-democratic tools is, therefore, largely unnecessary. For this reason, Linder warns against forbidding the game of direct democracy, only because it may be lost in a showdown with the EU.55 This applies to referenda as well as popular initiatives requiring no new nullification criteria. Instead, Parliament and the executive branch should assume more political responsibility, making the most of the remaining room for manoeuvre. If they recommend rejecting proposals that run counter to EU law, they should at the same time inform the electorate of the underlying reasons. They can then formulate counterproposals on popular initiatives conforming to EU law or address initiative issues directly at the EU level. In the opinion of the ‘pragmatists’, it is also safe to assume that the Swiss people would reject most proposals incompatible with EU law. There is a price for emphatically self-confident maintenance of direct democracy in its present form, in that Switzerland cannot avoid financial sanctions arising from delayed implementation of EU law. Moreover, the interfering national law would seem more like a political protest against unpleasant EU regulations than a legally enforceable standard, for in a test case, Swiss courts would uphold an EU statute as the sovereign law. Representatives of pragmatism do not really reject governmental reform, but they do not see it as a necessary consequence of EU entry. Instead, they refer to the need for reforms as a consequence of globalisation and international involvement – an argument applied to possible reforms in popular voting rights as well. Not surprisingly, these various scholarly approaches arrive at differing conclusions. No group can realistically assert that EU accession would not have repercussions. Clear answers regarding the ‘Europe viability’ of the Swiss state model will emerge only if Switzerland actually enters the EU, after it has gained some experience. For this reason, if parliamentary committees play ignorant and constantly ask for new opinions on the institutional impact of EU accession, this tactic may serve only as a delaying tactic, not a means for gaining insight. Experts have already provided such studies in abundance, and the range of possible implications is well known.

44 Institutions and decision-making processes

Summary In Switzerland the formal foreign policy process is subject to an unusual dual centralisation. Foreign policy is largely a federal matter, with the Federal Council and its administration responsible for conducting it. Yet, in contrast to most other countries, Swiss foreign policy is strongly influenced by federalist, non-centralist, and parliament-oriented components. Cantons play a substantial role in federal foreign policymaking; they also conduct their own ‘low-ranking foreign policy’ with neighbouring local and regional nonSwiss entities. Enforcement of treaties affecting international law is regularly left to the cantons, in a manner similar to domestic policy. Meanwhile, in recent decades, Parliament’s right of joint decision-making has repeatedly been reinforced, leading to a balanced relationship between the executive and legislative branches with respect to foreign relations. This restricts neither the operational flexibility of the Federal Council nor the appropriate involvement, amendment and supervisory roles of Parliament. The federal constitution grants the people ultimate power when making and legitimising foreign policy. The Swiss electorate possesses decision-making rights greater than in most other countries (initiative and referendum rights for treaties affecting international law). Moreover, the electorate exercises direct democratic rights conceived for domestic politics (i.e. popular initiatives and referenda on laws), and increasingly applies them to foreign policy content. This is typical of the connection between foreign and domestic policy. On the one hand, reform efforts seek to maximise popular voting rights in the foreign policy sphere, i.e. to ensure in the future that all important foreign policy proposals really are subject to the optional or mandatory referendum. On the other, there are frequent misgivings that too much direct democracy makes the decisionmaking process unpredictable and cumbersome. It can also reduce the efficiency and credibility of Swiss foreign policy.

4

Foreign policy decision-making processes

When a vote on a foreign policy decision is pending in Switzerland, advocates as well as opponents play it up as a life or death matter. Take, for example, the vote on EEA entry in 1992. During the campaign, a few opponents labelled the federal government a traitor. Yet similar bare-fisted tactics have also been used to fight other referenda with foreign policy overtones. Prominent members of Parliament throw their political weight into the balance and use down-to-earth arguments to try and convince opponents. Parties and interest groups take positions on proposals in the hope of mobilising members and sympathisers. The mass media report quite often during these ‘foreign policy boom periods’. Newspapers daily print numerous letters to the editor and, for once, fail to mourn the drop in advertising revenue. But the brief times when foreign policy attracts the focus of public attention are an exception in the process of foreign policy decision-making. Most ‘business as usual’ foreign policy has a limited effect on public thinking,1 largely due to the special demands of foreign policy in general; this is hardly unique to Switzerland. Foreign policy is effective if it seems unified and coherent to the international community and if the government can react quickly in times of conflict. On the other hand, the structure of Swiss political institutions explains why foreign policy decisions lead to internal bloodletting from time to time. Referenda on international treaties and statutory referenda play a central role (see section 3.3). This tense relationship between the nature of foreign policy and the unique characteristics of the Swiss state system clarifies decision-making processes in Swiss foreign policy and the behaviour of players involved. The first part of this chapter provides some basic information on Swiss foreign policy matters since the 1970s. We then focus on major players in foreign policy decision-making: the government (and its administration), Parliament, parties and associations, NGOs, the news media and, finally, the electorate (the intensity of plebiscite campaigns in particular). The chapter closes with a summary of the essential characteristics of the decision-making process for Swiss foreign policy.

4.1 Basic data This section clarifies three characteristics of decision-making processes in Swiss foreign policy. First, these processes occur less visibly for the public than do

46 Institutions and decision-making processes domestic policy processes. Second, the executive (and its administration) is usually the most important authority, as many foreign policy proposals never reach Parliament. Third, it is not the DFA but the DEA that most often takes charge of foreign policy decision-making processes. Great significance is attached to the pre-parliamentary consultative procedure in the Swiss decision-making system,2 since it substantially preordains decisionmaking (see subsection 3.1). The consultative procedure gives those affected the opportunity to comment on proposals. Those players able to organise and to cope with conflict can exert their influence by threatening referendum, but the consultative procedure also creates something of a public forum. Quantitative surveys by Klöti et al. and Widmer and Serdült (see Figure 4.1) show the number of issues granted consultation each year between 1970 and 1997, listing them as either foreign or domestic policy proposals.3 Most of the proposals accorded consultations fall under the domestic heading. The authors report a slight increase in foreign policy proposals since the early 1990s, but at the same time acknowledge that ‘those foreign policy plans granted consultation are often precisely those with a close relationship to a domestic issue also in a consultation process’.4 They conclude that, because the executive branch can act on its own, foreign policy decision-making processes flow less transparently than those affecting domestic policy. Widmer and Serdült rate a total of 804 treaties affecting international law, from December 1981 to November 1985 and from December 1989 to November 1993, referring in each case to the decision-making authority (see Table 4.1).5 In roughly two-thirds of all cases, the Federal Council decided foreign policy issues on its own. In addition, about 10 per cent of issues fell under the authority of administrative agencies. Thus, in only a quarter of cases was Parliament the authority responsible for decision-making. Public vote decided only eight issues (1 per cent of all cases).6 (It should be emphasised that the exact ratios apply only for the two periods studied, but the apparent trend allows us to generalise.) Generally speaking, the DFA is responsible for Switzerland’s foreign policy. Therefore, the information in Table 4.2 from Klöti et al. seems surprising at first glance.7 In almost half of all issues, the leadership lies with the DEA, not the DFA.8 Moreover, the ETEC has primary responsibility as much as the DFA. But these findings must be clarified on two points. First, in more than 90 per cent of cases involving the DEA, the leading division was the former Federal Office for Foreign Economic Affairs (FOFEA, called SECO since 1999).9 Once again, this reflects the dominant influence of foreign trade policy in Swiss foreign policy. The image of a strongly business-oriented and apolitical Switzerland arises. Second, international cooperation is now required in more and more areas that previously affected only the domestic policy agenda. The need for trans-border regulation has emerged, especially with regard to the environment, transport and energy, prompting the ETEC to assume the leadership on many foreign policy issues.

1984

1983

Year

1986

1985

1982

1981

1979

1980

1978

1977

1976

1975

1974

1973

1972

1971

1970

Number of issues

Source: Widmer and Serdült (1999) ‘Schweizerische Aussenpolitik’, p. 26.

Figure 4.1 Consultative procedure at the federal level; number of issues per year

0

5

10

15

20

25

30

35

Domestic policy Foreign policy

1988

1987

40

1989

45

1990

50

1997 1996

1995 1994

1993

1992

1991

48 Institutions and decision-making processes Table 4.1 Decision-making authority for foreign policy issues (Dec. 1981–Nov. 1985 and Dec. 1989–Nov. 1993) Authority

Number

Percentage

Federal Council Parliament Administrative agencies Electorate (simple majority) Electorate and cantons (double majority)

509 179 108 4 4

63.3 22.3 13.4 0.5 0.5

Total

804

100.0

Source: Widmer and Serdült (1999) ‘Schweizerische Aussenpolitik’, p. 25.

Table 4.2 Foreign policy issues with a leading agency, grouped by departments Department

Number

Percentage

DEA DFA ETEC FDJP FDF DHA Integration Office Switzerland–Europe DDPS

354 94 88 58 58 40 40 3

48.2 12.8 12.0 7.9 7.9 5.4 5.4 0.4

Total

735

100.0

Source: Klöti, Serdült and Widmer (2000) ‘Aussenpolitik von innen,’ p. 13. Note: The Integration Office is a joint agency of the DFA and the DEA.

4.2 Is government lacking leadership? The Federal Council bears responsibility for Switzerland’s foreign policy and often uses its own authority to act on foreign policy issues. Hence, the Federal Council and its administrative agencies are the most important players shaping Swiss foreign relations. This applies particularly to daily micro-management of relations abroad, for which the Federal Council has exclusive authority. The executive branch defines agenda setting for foreign policy issues. As a rule, it initiates foreign policy projects and sets them on the domestic policy agenda. Influences from the rest of the political system typically are ‘detoured’ via the executive branch to foreign policy.10 During recent years, right-wing populist circles have repeatedly criticised the federal government and its delegated actors for poor negotiation in the international sphere. Yet scholars, too, attest to the Federal Council’s limited authority to act and to its passive behaviour. First, the government, a collective body, makes its decisions via a consensusoriented process. This is not necessarily conducive to active foreign policy. Second,

Foreign policy decision-making processes 49 the Federal Council must be cautious, thanks in part to the restrictions of direct democracy but also to the narrow definition of neutrality, which could be questioned. Finally, the organisation of the federal administration to some extent restricts the actions of the Federal Council. Ruloff et al. succinctly summarise the first two reasons for the Federal Council’s seeming passivity:11 Switzerland possesses a leadership in the Federal Council that is not necessarily keen on making decisions; it is not predestined on institutional and even constitutional grounds to react quickly to foreign policy challenges, especially if such decisions (e.g. change in the integration-policy setting) have far-reaching domestic policy effects. Under ‘normal’ conditions (i.e. if the international setting hardly changes fundamentally), the system’s immanent leadership weaknesses and the orientation toward rigid behaviour patterns match: the Federal Council serves as a collegial seven-member committee without a hierarchic leader while a sword of Damocles looms over its head in the form of referenda on foreign policy issues. We must elaborate somewhat on this citation: the Swiss Federal Council has no authorised prime minister, a fact that certainly does not encourage an active foreign policy role for Switzerland. Instead, it contributes to the government by playing a reactive role to changes in the international setting rather than acting with foresight. Moreover, since Switzerland is marked by restrictive federalism, federal councillors often represent not only the interests of their own departments, but also those of their parties, cantons or home regions.12 The Federal Council has difficulty finding consensus rapidly. The four parties in the Swiss government represent the broadest range of political variations (with the exception of smaller groupings at the left and right fringes), covering nearly the entire scope of political opinion. This complicates the search for consensus, which usually emerges from a compromise that permits no dissension.13 But the tools of direct democracy impact the Federal Council’s ability to shape foreign policy more than multi-party government does.14 Of course, many foreign policy issues are not affected, as they fall under the sole authority of the government or its administration. This applies particularly to everyday foreign policy affairs, but no longer to more sensitive foreign policy issues. The political elites and the federal government now try through lengthy negotiations to prevent a proposal from failing at the polls. According to Schneider, ‘embryo compromises’ often emerge at a pre-parliamentary stage or in the parliamentary committees even before proposals reach the plenary hall of Parliament.15 Ruloff et al. find that referenda on international treaties focus federal councillors’ attention mainly on the domestic arena (one could also include optional referenda on federal laws affecting foreign policy).16 The government knows the positions of interest groups, parties and the electorate on many proposals and regards them ‘as a component of defining foreign policy status’. According to Linder, however, cases often arise in which the Federal Council ‘leads with well-founded and long-term positions’.17 As an example, he mentions

50 Institutions and decision-making processes the 1993 report on Swiss foreign policy that redefined foreign and neutrality policy and formulated the strategic goal of EU entry. Yet in such cases the government usually finds itself alone, with no support from blocs, parties or interest groups (see also subsections 4.3 and 4.4). The Swiss practice of finalising foreign policy decisions after checking the electorate’s pulse is hardly unique. No government in a parliamentary and presidential system can repeatedly make unpopular decisions and expect to win the next election. Yet these governments have four-year legislative terms in which to pursue their policies. In contrast, the Swiss Federal Council, if it wants to avoid a shipwreck of specific foreign policies, must hear and respond to a wide range of interests, especially given that referendum democracy already prefers the status quo. Both the domestic agenda and the interests of negotiating partners at the international level restrict a government’s room for manoeuvre in foreign policy.18 Parliament and the interest groups therefore find themselves largely in a ‘take it or leave it’ situation regarding foreign policy proposals. Swiss economists Aymo Brunetti, Markus Jaggi, and Rolf Weder believe that explicit compensation of a proposal’s potential losers could be a way to increase acceptance of Federal Council policy and avoid rejection of the foreign policy proposal.19 Compensation for possible losses should keep them from launching an optional referendum or preventing the opposition from winning a mandatory referendum. However, political science studies show that citizens do not vote in their own economic interest primarily, even for what appear to be business proposals.20 Basic political convictions and goals carry more weight. A ‘yes’ to Europe depends on whether modernisation is victorious and whether Swiss political traditions are critically damaged by European integration. Neutrality, so narrowly defined since the Second World War, combined with the tools of direct democracy make up the third obstacle to consistent and active Swiss foreign policy. Tentative discussions about a new orientation have taken place since the end of the Cold War, gaining momentum in the 2002 campaign before the plebiscite on UN entry. Yet the majority of the population still sees neutrality not simply as a tool but as an exceedingly important national interest. The rightwing populist circles especially stirred up the fear that retreat from neutrality would threaten Switzerland’s existence – an after-effect of the neutrality practice pursued and conveyed until the late 1980s. The spirits of previous governments still, to some degree, haunt the current one.

4.3 Parliament: the playground for foreign policy? Parliament assumes an important role in foreign policy in a formal sense through its budgetary power and its authority to approve treaties affecting international law. However, for a long time members of Parliament regarded foreign policy as a rather exotic political area in which they could exert little influence: the Federal Council and its administrative agencies enjoyed too great an information advantage, they reasoned. Parliament has, in fact, spoken out on individual issues, especially when recognising new states and governments at the start of the twentieth

Foreign policy decision-making processes 51 century, and later on human rights issues. In general, however, Parliament confines itself to domestic matters. Only when increased international involvement meant that foreign policy had a greater impact on domestic issues did members of Parliament become more intensely occupied with foreign policy.21 Characteristics of the Swiss state system are especially well suited for ignoring the call postulated by realism theory (see chapter 1): that debate over distribution of political power among the parties does not essentially affect a country’s foreign policy. There are two reasons for this. First, the Swiss government does not need a parliamentary majority to give it the permanent support necessary to keep it in office. Since Switzerland does not employ the ‘vote of no confidence’ tool, Parliament can oppose government policies without worrying about the consequences. Second, this often occurs when members of Parliament (who always represent the interests of their parties, since the proportional representation election system demands this to a high degree) believe they can gain long-term political capital. The Zurich section of the SVP has conducted (more than anyone else) a recent permanentelection campaign, focusing on as many domestic and foreign policy topics as possible to gain potential votes. Yet parties near the fringe have long tried to manipulate Parliament as a megaphone for their own views. Fleury et al. have studied Parliament’s historic role in foreign policy; they conclude that extremist parties often try to mobilise other parties in Parliament by provoking them with radical positions.22 Both the political right and left have orchestrated neutrality for their purposes, in most cases demanding that it be maintained. The right used this argument against entering the EEA, described by the president of the Zurich SVP wing, Christoph Blocher, as a genuine annexation into the European Union.23 On the other hand, the Parliament’s left wing backed the 1972 initiative for increased arms control and an arms-export ban, justifying that it promoted credible neutrality. In general, the left wing linked neutrality with solidarity above all else, while the right wing used it as an argument to propagate as passive a foreign policy as possible. This differing interpretation of neutrality also contributed to the widening gulf between the parties. The right wing also frequently used costs as an argument against Switzerland increasing its international commitment. This occurred in 1976 with the IDA loan, and again in 1992 during debates on entry into the Bretton Woods institutions. What is striking is the change in party positions over time: the SP developed from an opposition party at the left edge of the spectrum to an establishment party, while since the 1980s, the SVP (though still a government party) increasingly shifted to an opposition course.24 With regard to Parliament’s influence on Federal Council policy, Fleury et al. found that it was particularly influential in two areas: Parliament accelerated the drafting of the development aid law of 1976, as well as the introduction and continuing development of the referendum on international treaties. Moreover, Parliament’s 1982 report moved the Federal Council to clarify its policy on human rights issues.

52 Institutions and decision-making processes It is difficult to assess how members of Parliament exerted specific influence on the formulation of foreign policy.25 Diplomatic moves on human rights issues often occur in secret, shutting out the public in the hope of ensuring success. When expanding diplomatic representation, and when ratifying the social charter and the UN Convention on the Rights of the Child, Parliament acted as a brake, even if members’ motives varied. Nonetheless, the push to enter the Council of Europe (as well as the UN) came from Parliament. These diverse and partly contradictory attempts by Parliament to influence Swiss foreign policy suggest an initiative originating from party blocs or individual players, not Parliament acting as a legislative institution. Parliamentary foreign policy (like other policy areas) more often emerges from permanent committee rooms than the floor. The drafting committees usually have already done enough legwork to gain a majority in floor votes. Meanwhile, chairs of the foreign policy committees set themselves up as leaders of a sort-of parallel foreign policy.26 The best-known example for this may be the long-time chairman of the National Council’s foreign policy committee, Ernst Mühlemann (FDP), who was often referred to as the ‘shadow foreign minister’.

4.4 The influence of parties and associations Parties and associations form the most important link between the administration and the electorate. Their relative influence on Swiss policy has also been studied.27 The literature attributes a comparatively strong influence to legislative-oriented associations, especially in the business sector. This subsection discusses how this relates to foreign policy, first discussing the parties’ influence, then that of the associations. 4.4.1 Parties The parties contribute relatively little to the formulation of foreign policy. They usually confine themselves to work at the parliamentary level (see section 4.3) and to campaign activities during plebiscites (see section 4.7). In federalist Switzerland, parties at the national level are very weak organisationally. They lack financial resources and sometimes have difficulty finding a unified line on controversial foreign policy issues.28 Thus, voting recommendations from parties at the cantonal level quite frequently diverge from those of the national parties.29 Parties also have poor links to international networks and suffer from a lack of access to information. Finally they must attend to questions on issues at every level (federal, cantonal and local), unlike the associations, which usually represent special interests. This stretches their limited resources even more. The parties’ overall weak position appeared stronger recently with fiercely, emotionally staged voting struggles on foreign policy proposals (UN, EEA, ‘blue helmets’ and arming Swiss troops for peacekeeping missions abroad). Yet Kriesi et al. found that the parties held back during voting campaigns and were less committed than action committees and other extra-parliamentary elites.30 Pressure groups close to the parties (such as the Campaign for an Independent and Neutral

Foreign policy decision-making processes 53 Switzerland [CINS] for the SVP and the Swiss Business Federation [Economiesuisse] for the FDP) funded a major share of the campaigns. This can be problematic, as one often can only assume the identity of financial donors, i.e. which interests lurk behind the campaigns and how much cash they provide (see section 4.7 for greater detail). One way to channel the flow of funds better would be to make donations public or to finance parties better.31 In summary, the parties have only a slight influence on foreign policy. While some prominent party representatives use foreign policy issues to try and raise their images, parties tend to take a firm position only if it promises them success in the domestic policy debate on power distribution. 4.4.2 Associations Various studies by NRP 42 focus on the role of associations in Swiss foreign policy. Viewed historically, a nearly non-existent federal administration32 enabled associations to gain important influence in a Swiss foreign policy marked by private interests. It is no accident that business associations play a vital role, especially representatives of export-oriented commerce. At the beginning of the federal state, individual traders conducted negotiations at the international level. But, at the end of the nineteenth century, the Swiss Federation of Commerce and Industry (Vorort)33 and the Swiss Farmers’ Union largely determined federal foreign policy (which, essentially, was foreign trade policy). Switzerland took an active role in multilateral forums until the 1930s.34 Although negotiations occurred between states, they often involved Swiss delegation members who represented private associations and who allied themselves in a broad-based network on behalf of the Federal Council. Between 1930 and 1950, as the bilateral negotiating style dominated, these associations not only took a direct part in the negotiations but also often assumed leadership of the Swiss delegation. Some argue that, from time to time, the association’s strong position also secured domestic policy legitimacy for foreign policy.35 In most cases, leading business representatives were also members of the National Council, the Council of States, or a cantonal government. Since the end of the Second World War, as the UN system expanded, multilateral negotiation forums increased at the cost of bilateral ones.36 Association influence on Swiss foreign policy has weakened since 1950. This ‘downgrading’ of business representatives led to their efforts to ‘replace the declining possibility of direct and specific joint decision-making in foreign policy negotiating processes by the simplistic veto in plebiscites’.37 Klöti et al. take a relative view of associations’ influence on legitimising foreign policy in the 1950s and 1960s.38 According to them, foreign policy took place largely ‘out of the public eye’. No foreign policy plebiscites were held, so foreign policy needed no direct domestic policy support. The issue of legitimacy did not arise. Consequently, in Switzerland and elsewhere, purely domestic policy fields took on an increasing international dimension. International consultations led by government representatives featured topics such as health, culture and education,

54 Institutions and decision-making processes with repercussions in the domestic policy arena. More and more offices and federal agencies became concerned with foreign policy, and association representatives found themselves facing a variety of contacts in administrative agencies. This contrasted with earlier days, when the FOFEA (now called SECO) and the former Federal Policy Department (now the DFA) were concerned primarily with foreign policy.39 This development complicated efforts by the associations for consistent, permanent lobbying for their concerns. A study on Swiss transport policy shows only a limited possibility for influence via international umbrella organisations. For ‘in international diplomacy, in contrast to domestic decision-making processes where state influence is often weak, formal power positions of state actors such as decision-making authority, law and the legitimacy to conduct negotiations play a central role’.40 The International Labour Organisation (ILO) proved an exception. Since 1919, representatives of government, employers and workers had tried jointly to exert influence on the domestic policy design of member countries when formulating and implementing social welfare standards. According to Senti, when forces open to change collaborate they can develop new arguments to support their programmes in Switzerland.41 Yet, the dominant role played by associations defies generalisation – in domestic politics as well. Labour unions, women’s organisations, etc., have much less influence to exert and are also poorly integrated.42 This follows from Olson’s argument that specific short-term owner interests (the ‘haves’) can organise better than the general long-term interests of the so-called ‘have-nots’.43 The ‘haves’ are also better equipped for conflict because they can say ‘No’ more emphatically and thus are more influential.44 This casts new light on the focus of Swiss foreign policy in foreign-trade policy: although political elites also advocate concentrating on business affairs, they yield mainly to the interests of powerful associations. In summary, we find that the associations’ influence on Swiss foreign policy has indeed declined over time. Yet, major associations can still influence the consultation process, in part because non-permanent committees of experts, which have an audience before the administration drafts a bill, sometimes include association representatives. They can also threaten a referendum in a way similar to domestic policy proposals. In this regard, associations (especially for business groups) have increased their influence in ways the parties have not.

4.5 Democratic legitimisation through NGO involvement? In contrast to the associations, which represent the rather narrow, short-term special interests of their members, NGOs have considerably more general, longterm concerns. At the national level, NGOs often take on issues not pursued by a specific lobby. These topics therefore do not appear on the domestic policy agenda at all, often falling through the loosely knit network of organised interests and gaining little attention in political debate.

Foreign policy decision-making processes 55 The NGOs are gaining similar importance at the international level. They represent positions that find little or no room in the agendas of nations as they try to jockey the best position they can in the international community. Examples include human rights and environmental issues, as well as the gap in wealth between the Third World and the industrialised nations. Freymond and Boyer have studied the influence of NGOs on human rights and environmental issues in negotiations between states.45 They find that most NGOs confine themselves to the same traditional means of exerting influence they use when addressing domestic policy: sensitising campaigns, petitions, popular initiatives and cooperation with other NGOs. Only a few NGOs try to influence Switzerland’s foreign policy directly – mostly large, internationally networked NGOs like the World Wide Fund For Nature, Greenpeace and the Swiss Coalition of Development Organisations.46 Important here are personal relationships and informal contacts to office directors or division heads, meetings in seminar and workshop formats, gatherings when preparing international negotiations, and participation in official delegations. Freymond and Boyer soundly conclude that relationships between NGOs and the Swiss administrative agencies function better than in other countries, in part perhaps because of Switzerland’s long tradition of dealing with non-governmental players.47 But these relationships were primarily with traditional players in the social welfare partnership: umbrella organisations serving business associations and labour unions. Cooperation between the federal government and the NGOs as non-profit-oriented collectives began to intensify only at the end of the 1980s. Before they could exert influence on state foreign policy, NGOs had to determine how they ranked their options for action. Did they prefer to act outside the system, thus preserving their independence and credibility both in and out-of-house? Or would they try instead to influence from within the given institutions, assuming an advisory role in the various committees and cooperating with the authorities? This involvement – especially in connection with an official negotiating delegation – runs the risk of ‘taming’ per se. Individual NGOs, like Switzerland as a whole, must weigh the pros and cons of autonomy and joint decision-making. NGOs faced the question of whether it made sense to institutionalise cooperation with administrative agencies. They pursue varying, even diverging goals, access different information (something that could actually benefit NGOs) and rely on different resources. We believe a democratic theory argument speaks for intensified NGO involvement, especially in the foreign policy sphere. An increasing number of problems can no longer be resolved at the national level but require cooperation between governments internationally. At the national level, possibilities for citizen influence are institutionalised and guaranteed by parties and associations – with the shortcomings of a pluralistic society, obviously. But at the international level policy lacks democratic legitimacy, as governments rely on representatives of administrative agencies and multinational enterprises to determine policy. If NGOs were considered representatives of civil society, their intensified involvement in formulating and implementing foreign policy would contribute to

56 Institutions and decision-making processes improving its democratic legitimacy. NGOs could thus assume a function similar to that of the new social movements at the domestic level. According to Linder, this would correct inequities in a consociational democracy48 by including on the political agenda issues typically neglected by parties and associations.49 Freymond and Boyer criticise the involvement of NGOs in the foreign policy decision-making process, simultaneously demanding that members of Parliament be present to assure transparency and legitimacy.50 This recalls the 1960s academic debate in the USA on pluralism. According to Bachrach and Baratz, one should see both faces of power, never forgetting that the power to define may itself be more important than the authority to decide.51 Yet recent international conferences on globalisation that involved only government and business representatives were met with vehement protests – evidence that a problem exists. In response, organisers of the World Economic Forum in Davos, for example, have broadened the guest lists for future forums and included representatives of NGOs.

4.6 Foreign policy as a ‘foster child’ in media coverage The place of the media in democracies is often described as the fourth estate or fourth power: the media exercise control over political decision-makers by deciding what information is conveyed, and how. Published opinion reflects public opinion, but it influences it at the same time. The gap between German and French-speaking Swiss is evident in their opinions on foreign policy and in the votes they cast, seen particularly in the 1990s. In contrast to Swiss-German voters, the electorate in French-speaking cantons spoke in a clear, strong voice in favour of opening Switzerland to the world. Could media coverage be one reason for this difference? Nyffeler studied foreign policy coverage in the press, asking what value the news media places on foreign policy.52 Her survey of journalists reporting on current affairs concluded that foreign policy rated low in comparison with other Swiss policy areas: foreign policy ranked eighth, behind policy on social welfare, economics, the environment, transportation, land-use, energy and finance.53 These findings confirm the following quotation from Blum and Gysin: Indeed the Swiss news media are not really impeded in regard to foreign politics, yet now as in the past they report on this policy area in an extraordinarily hesitant manner: foreign policy, rated low by journalists and hardly noticed in coverage, still ekes out a shadow presence in the media. The media also neglects the foster child of Helvetian politics. If they do consider it, they do so superficially and with a lack of fantasy. The topic of foreign policy isn’t even worth an entire page a week for the newspapers.54 According to Nyffeler’s survey, reporters in both German and French-speaking Switzerland identify themselves as left leaning, with above-average education when compared to the rest of the population. Both characteristics are well known to

Foreign policy decision-making processes 57 correlate with openness in foreign policy,55 leading to an expectation of such coverage. Both German and French-speaking journalists agreed on the nature of their professional roles: that is, to retrieve and report information. But the question remains – where do journalists obtain their information? According to the questionnaire, both groups depend on several sources: wire service dispatches, their own files, interviews with experts, and background provided by DFA press conferences. Major media (news agencies, well-financed daily newspapers with wide-ranging resources, and public-law radio and television stations) delegate their own staffs to work with this material. But smaller newspapers rely on agency dispatches and the so-called leading media. Other differences arise between German and French-speaking regions. While journalists in German-speaking Switzerland orient themselves to purely Swiss-German media (the Neue Zürcher Zeitung or NZZ, Tages-Anzeiger (Zurich), SwissGerman TV and Radio), journalists in the French-speaking area rely first on French newspapers (Le Monde and Le Monde diplomatique, followed by the NZZ, Tages-Anzeiger, and Le Temps, Geneva). This difference in orientation provides at least a hint as to why the French-speaking media address topics the German-speaking journalists do not. And it helps to explain why voters perceive and assess Swiss foreign policy differently, depending on where they live.

4.7 Disputed voting campaigns While foreign policy is hardly the media’s favoured topic, it does give short-term attention to campaigns before foreign policy plebiscites. The high degree of conflict within elite political circles makes coverage more attractive as it leads to very intense, polarised debates. However, the vote on Switzerland’s entry into the EEA showed that the debate switches eventually from editorial coverage to advertising campaigns and letters to the editor, and that these become increasingly influential.56 This subsection takes a look at these means of persuasion. Kriesi et al. studied the importance of advertising campaigns during foreign policy plebiscites as opposed to domestic policy proposals.57 Foreign policy proposals are distinguished by very intense, conflict-oriented advertising campaigns, as well as by extremely weak use of political parties.58 This resulted in most foreign policy plebiscites attracting an above-average voter turnout during 1971–2001 – as well as since 1848!59 Opponents of Federal Council proposals (i.e. usually those players who reject Switzerland adopting a far-reaching foreign policy) are very active, with an argumentative style that dominates the advocates, as evident in recurring VOX polling analyses surveying the electorate’s voting motivations. The support for campaigns to open the country is often too weak to counter opposition campaigns. Moreover, advocates of Federal Council proposals cannot shake the strength of those demanding the status quo, since advocates always argued reactively (against the opposition campaign or the status quo). At the same time, they fail to stress the advantages of the proposals relevant for citizen decision-making: neutrality, popular voting rights and costs. Hence, Federal Council foreign policy proposals suffered

58 Institutions and decision-making processes at the polls in the late 1980s and early 1990s. This was not due to political manoeuvring any different from that used in domestic politics. Rather, the elites’ arguments stressed reason – a strategy with no chance when up against promoters of a ‘fortress Switzerland’ course: populism, the myths, metaphors and other symbols rooted in Switzerland’s political culture. During recent years, advocates’ campaigns have addressed the opening of foreign policy with an increasingly emotional tone. Whether this contributed to victory in the last four plebiscites with clashes between advocates and opponents of a foreign policy opening (introduction of kilometre charges for heavy goods vehicles in 1998,60 bilateral treaties with EU in 2000, arming Swiss soldiers for peacesupporting missions abroad in 2001, UN entry in 2002) remains to be seen. It is also possible that advertising by the Zurich section of the SVP and the CINS went too far in opposing the arming of Swiss troops in civil deployment abroad. The Federal Council criticised the slogan ‘Sacrificing Swiss sons for foreign disputes?’ with the image of a military cemetery or a Swiss cross disfigured by pistols, saying it misrepresented the proposal by overstating its scope. The proposal concerned the arming of volunteer soldiers for operations supporting peace, not the deployment of Swiss soldiers abroad. The then-President of the Confederation, Moritz Leuenberger, addressed this point at a rail union convention in Berne: ‘These days we are experiencing a voting campaign which teaches us that fairness and a sense of proportion can no longer be taken for granted in our country’.61 It is not important whether the audience understood this subtle allusion to Max Weber, referring to a sense of proportion as one of any politician’s three crucial qualities. The decision-making process raises issues about both campaign disinformation and Federal Council corrections. For one thing, democracy is sustained by debate, argument and rebuttal. It must orient itself to facts and correct manipulative statements. On the other hand, intervention by the authorities is legitimate only if it consistently occurs in such cases (i.e. not just when slogans distort reality against their own personal convictions). Neither point applies to foreign policy alone, but surely both are valid here, too.

Summary Most of Switzerland’s foreign policy decision-making processes occur in seclusion, unnoticed by the public. The Federal Council and administrative agencies conclude this routine business on their own. Due to the increasing international dimension of more and more policy areas, not only the DFA but also other departments and agencies – particularly the SECO – play important roles. Parliament debates more important decisions. And a plebiscite takes place on proposals that affect basic change in policy. Here the government acts as the link between Swiss polity and the international setting, between the domestic and foreign arenas. Like other governments, the Federal Council is limited in its flexibility, both by restrictions in the international setting and by dependence on domestic policy approval. Yet the need for this approval can also exert pressure on its negotiating partners to make greater

Foreign policy decision-making processes 59 concessions. In this way, Switzerland is no different from other democratically organised states. Yet organising the government as a collegial body is specifically Swiss, as is the inclusion of members representing all-important parties when making and enforcing a joint decision. This sometimes puts the Federal Council in a ticklish position. While other governments know that a majority in Parliament will support their policies, members of the Federal Assembly occasionally can play an opposition role, even though their party is represented in the government. Nonetheless, the fact that the Swiss Parliament has less influence than other parliaments over foreign policy lies partly in the lack of a Swiss ‘vote of no confidence’ that could cause a government to fall. It is also due to the close bonds between state and private actors, which grant an important role to associations in the preliminary law-making process. The influence of associations is indeed more restricted in foreign policy than in domestic policy affairs, but their contacts to administrative agencies and their role as ‘experts’ enable them to assert their interests. Organised interest groups can use the statutory referendum to call into question decisions by both government and Parliament. This sharing of tasks and the marked role of Swiss federalism also make it easy for NGOs to gain access to administrative agencies, better than in other countries. In Switzerland, as in other European countries, the electorate can speak out on important foreign policy decisions. But while other governments determine for themselves whether to hold a plebiscite, the Swiss constitution requires a popular vote – or at least the possibility of one – for mandatory and optional referenda as well as for statutory referenda. Since at least the 1990s, the electorate has split into two opposing camps: those for increased ‘openness’ (i.e. greater involvement in European affairs) versus those favouring Switzerland acting as a ‘lone wolf’. This results in especially hard-fought plebiscite campaigns with foreign policy proposals heavily dominated by pressure groups. Media coverage throughout the country only helps keep the two opposing groups apart, especially since the media in French-speaking Switzerland orients itself first to the French press. The topics chosen by French-speaking media, their interpretation and presentation of the issues all tend to differ. Thus, the way a voter perceives and judges Swiss foreign policy depends in part on where in Switzerland he or she lives.

Part III

Policy fields

5

Policy toward Europe

‘Policy toward Europe’ refers to all Swiss relations with European countries. Since the European integration process is of special importance for Switzerland, integration policy takes priority. The first of three sections in this chapter focuses on history, based largely on Federal Council reports, providing an overview of the most important stages of integration policy. It also describes the development of neutrality policy as it relates to integration policy. The second part, based on selected case studies, addresses the impact of current integration policy on Swiss autonomy and the country’s influence on the EU. In the third part, we discuss differentiated integration and the institutional effects of EU entry.

5.1 Development of Switzerland’s policy toward Europe 5.1.1 The start of the integration process At the founding of the Organisation for Economic Cooperation in Europe (OECE, now called OECD), Switzerland had to decide how to shape its relationship with Europe after the Second World War.1 The Federal Council explained its basic readiness to embrace European and worldwide solidarity, with the following conditions: (a) no change in neutrality policy; (b) preservation of autonomy in economic policy; and (c) maintenance of autonomy in trade policy.2 The Federal Council fundamentally rejected any surrendering of sovereignty that could affect the credibility of neutrality. In particular, this meant that Switzerland would not subjugate itself to majority rule or enter a customs union. None of these conditions precluded membership in the OECE, and Switzerland became a founding member in 1948. The Federal Council of 1949 regarded membership in the Council of Europe as inopportune on neutrality grounds. Switzerland viewed the Council of Europe (which originally saw itself as a starting point for a ‘United States of Europe’) as clearly political in content and as a non-universal organisation in terms of membership.3 The Federal Council also rejected the Soviet Union’s invitation to take part in a conference on European security in 1954, saying it lacked universality.4

64 Policy fields Swiss participation in the European Organisation for Nuclear Research (CERN) in 1953 seemed less controversial with regard to neutrality, according to detailed investigations by the Federal Council.5 Specifically, this concerned allaying fears that the military could make use of research results, particularly in the event of a military conflict. The Federal Council justified its position in the 1946 Petitpierre Doctrine, where it distinguished between ‘technical’ or economic organisations on the one hand, and political or military ones on the other. (Swiss Foreign Minister Max Petitpierre developed the Petitpierre Doctrine in connection with Switzerland’s possible entry into the UN.) While nothing stood in the way of Swiss participation in UN specialised agencies, the country wanted distance from the ‘political’ mother organisation. At the same time, Switzerland took a comprehensive view of neutrality’s so-called fore-effects, which intended to guarantee the credibility of wartime neutrality even in peacetime as an integral part of neutrality policy. Following the precepts of universality, Swiss neutrality policy expanded in the 1950s. It presumed intent to maintain diplomatic relations with as many states as possible, while also requiring universality as a criterion for Swiss membership in so-called international political organisations. Such organisations would have to include as many nations as possible – or at least the most important ones – before Switzerland would consider participating.6 The political and economic or technical criteria were never precisely defined. On the supranational level, at the outset of the European integration process these terms did not even begin to grasp the essential characteristics of international organisations. The idea underlying this process – a technical (i.e. economic) integration leading to political union – did not correspond with the Swiss notion of international organisations at that time. The challenge posed by institutions of the EEC lay primarily in the quality of the bond that membership presupposed. (The EEC began operations in 1958.) The founding of the European Coal and Steel Community (ECSC) in 1952 affected Switzerland. Two-thirds of the coal imported by Switzerland, and fourfifths of the steel, came from the ECSC’s six member countries. Moreover, Switzerland closed bilateral trade agreements with these six states, granting most-favoured-nation treaty status.7 Although Swiss entry into the ECSC was out of the question (Switzerland lacked the basic industries involved), it still pursued the development with concern.8 The Federal Council justified Switzerland playing a spectator role in the case of the EEC, but this justification was not based on technical and political criteria. In its 1960 message on Swiss participation in the European Free Trade Association (EFTA), the Federal Council stated frankly that the independence of the Swiss people barred Switzerland from EEC entry, as the EEC envisioned establishing a European super-state.9 Yet it admitted that the implicitly strong political dimension of the unification process would wipe out the autonomy between foreign trade and foreign policies, making the policies indivisible. This formed not only a foundation for the political union of EEC member states; it also presented a means for them to realise their common political goals in Europe.

Policy toward Europe 65 Swiss entry into such an organisation – with open political character and a restricted circle of participants linked by a partial ceding of national sovereignty – would erode Swiss neutrality and independence, even if Switzerland could maintain neutrality obligations during wartime. There was a narrow interdependence between autonomy in foreign trade and foreign policy in that ceding one sector could greatly complicate maintaining the other. Such a step could shake international trust in the status of Swiss neutrality. In contrast, the EFTA (conceived as an industrial free-trade area) corresponded completely to Switzerland’s notion of passive integration. A parallel customs reduction in the industrial goods sector could limit the integration between the EEC and the EFTA states. The EFTA could even serve as a potential base for a subsequent multilateral bridge to the EEC. 5.1.2 Détente at the outset of the 1960s The relationship of Switzerland to its European surroundings loosened up in the early 1960s. In addition to political and technical criteria, a separation emerged between supranational and international organisations. From this vantage point, entry into the Council of Europe also seemed possible. This step represented no cause for concern with regard to neutrality law, according to the Federal Council’s 1962 report, since the Council of Europe represented neither a military nor a political alliance. Furthermore, membership in a regional organisation did not violate neutrality per se, as evidenced by membership in CERN.10 In referring to neutrality policy, the government stressed that the character of the Council of Europe had changed: the goal of a common European foreign policy had moved to the background. Now the Council of Europe played an important role in relations between member states of the EEC and EFTA, and had become an important meeting place. Viewed overall, the disadvantages of entry had declined with regard to neutrality policy, and the organisation’s importance to Switzerland had increased. Thus, entry would not reflect a Western-leaning interpretation of neutrality policy; rather, it should occur because of a change in the Council of Europe’s emphasis. Thus, the extensive neutrality policy was preserved in its basic form. The Council of Europe’s ‘soft’ integration form and its distance from foreign and security policy issues had prompted Swiss entry. Neutrality remained an omnipresent factor in Swiss foreign policy, particularly in its integration policy. It became little-questioned dogma that would form a pillar of Switzerland’s self-image as a state.11 Neutrality also was reason to preserve Switzerland’s wide room for manoeuvre while maintaining its distance from collective organisations and controlling bodies. This would permit Switzerland to make optimum use of economic and financial resources under its own authority, to its own advantage. An astounding episode in Swiss integration policy occurred during the same period. As a consequence of Britain’s application to enter the EEC, the three neutral EFTA states (Austria, Sweden and Switzerland) sought to negotiate acceptance as

66 Policy fields associate members. But the EEC ruled out a customs union and a general trade policy toward third nations. Nevertheless, the EFTA neutrals strove for as much inclusion in the EEC’s Common Market as they could. With assumption of the economic content of the EEC founding treaties, Switzerland’s attempt at association introduced a concept completely new to Swiss integration policy: it sought a comprehensive and positive integration that was based not only on the lifting of trade barriers but that also assumed policies aimed at sharing an integrated European market.12 The plan involved numerous hurdles in both content and the institutional sense. Difficulties surfaced – especially in the competition and agricultural policies, but also with regard to freedom of movement, since Swiss associations affected by liberalisation turned against adapting European regulations. Two institutional questions arose: under what conditions must the associated states adapt future EEC law? And to what extent could they influence the form of this law? It quickly became apparent that the EEC would not accept an associate partner’s right of joint decision-making. And it was unclear whether the EEC would accept complete freedom in adapting its laws.13 The plan ended abruptly in January 1963, when French President Charles de Gaulle vetoed British entry to the EEC. General relief reigned in Switzerland, and not simply because Britain would now remain in the EFTA and strengthen it vis-à-vis the EEC. In addition, domestic policy hardly supported the association plan, and related problems would temporarily disappear from the agenda. 5.1.3 Institutionalisation of relations during the 1970s and 1980s At the start of the 1970s, the Federal Council again discussed the question of Swiss membership in its message on the free trade agreement with the European Community (the EC, as the EEC had renamed itself). The Community had always stressed (particularly in the context of expansion talks) that entry assumed readiness to accept Community treaties, including political goals, without reservations. This covered Community law enacted to date, as well as plans already defined for the future. ‘We were not ready to envision a regulation on this basis’, the Federal Council stated. ‘The reasons are well known: Maintaining a credible and predictable neutrality policy, concern over preservation of our domestic structure. . . . Hence Switzerland strived from the outset for a mid-way solution between entry and remaining on the sidelines.’14 The special form of participation in European integration efforts, as embodied in the free trade agreement, allowed Switzerland, as a neutral country, to preserve its freedom to manoeuvre on political and foreign trade issues. Thus, the agreement corresponded to a middle-ground solution, in keeping with the policy pursued by Switzerland since the 1950s. The free trade agreement affected neither the will nor the ability of Switzerland to continue its unrestricted policy of permanent neutrality: ‘The fact that the Community has offered to conclude an agreement of this sort,’

Policy toward Europe 67 the Federal Council added, ‘may in fact be viewed as recognition of interest by European states in continuation of our policy.’15 At the end of 1972, some 72.5 per cent of the Swiss electorate and all twenty-six cantons accepted the free trade agreement as the first European policy proposal. Despite broad-based support by the Federal Council parties during the voting campaign, numerous loud voices rose in opposition on the left and right wings of the political spectrum. They used largely the same arguments that would arise twenty years later in the EEA plebiscite regarding Switzerland’s imperilled independence and the danger of additional foreign workers.16 After completing the free trade agreement, Switzerland tried to expand bilateral cooperation with the EC in other areas. But this in no way covered all topics proposed by Switzerland. Most important, negotiations in the service sector proceeded only gradually. The EC wanted to conduct near-simultaneous negotiations in areas in which several EFTA countries sought to close sector agreements. The EC and EFTA decided in 1984 to intensify their cooperation in the so-called Luxembourg Process. This was based on a sector approach, at the same time strengthening multilateral components. Yet the acceleration and intensifying of European integration soon overtook the Luxembourg Process, a result of the signing of the Single European Act (SEA) in 1986. Its goal to realise the EC internal market by the end of 1992 was established by treaty. In 1988, the Federal Council published its most comprehensive report on Switzerland’s relations to the EC to date. Then as before, neutrality played a central role in shaping Swiss integration policy: ‘In the economic area,’ it said, ‘Switzerland, as a neutral state, should agree to no obligations that could result in it no longer being able to fulfil its duties emanating from neutrality law in case of war.’17 However, the Federal Council underscored for the first time that the relationship between neutrality and independence deserved special attention in shaping ties between Switzerland and the EC. Since total autonomy and absolute sovereignty were unrealistic, further distinguishing and intensifying interdependence could become a requisite means of strengthening independence. The Federal Council was aware that Western European third states not belonging to the EC could find the setting for European cooperation increasingly more complex. Yet it asserted that forcing European neutrals (who did not want to cooperate) to choose between entry and acceptance of substantial disadvantages would not be in the Community’s best interest. The Federal Council held that ‘. . . the credibility of traditional neutrality policy that we conduct autonomously and according to our own discretion could be placed in question by entering the EC and assuming the political goals related to it, as the Community presents them today’.18 The government thus concluded: To the extent that permanent and armed Swiss neutrality serves to maintain Swiss independence and conversely to the extent that Switzerland preserves that degree of independence indispensable to conduct a credible neutrality

68 Policy fields policy, it contributes to political stability and balance in Europe. . . . There is no reason under these conditions for a new orientation in Swiss foreign policy, as would be required by entry into the EC or, under certain conditions, by creating new institutional links between Switzerland and the EC.19

5.1.4 The EEA-entry campaign and the return to bilateralism In a January 1989 speech before the European Parliament, European Commission President Jacques Delors suggested that EFTA states no longer seek EC entry through a sector approach, but through a new, all-encompassing strategy. He suggested a stronger, institutionally structured association with common decisionmaking and administrative bodies. His proposal sought to give the EFTA states an alternative for EC entry, since the EC had decided in principle on ‘deepening’ rather than expansion at that point.20 The proposal would essentially be based on Community law, along the same lines as the 1961 association effort. But, alongside obligatory adoption of EC law, the EFTA states would be able to assume a joint role in decision-making when further developing and applying Community law. It soon became clear that the project would fall short of expectations. The Commission insisted on a ‘two-pillar architecture’ consisting of one EC pillar and one EFTA, without joint decision-making structures. Yet, it was joint decisionmaking that the EFTA states and, in particular, Switzerland had demanded.21 The EC remained tough on both the material exception and the institutional issues. Nor did it want to guarantee the EFTA states access to the committees that apply EC law (the so-called ‘comitology’). If an EFTA state refused to adopt future EC law, the related legal standard would be abandoned for the entire EEA. The European Court of Justice (ECJ) supplied the fatal push to the only remaining common body, the EEA Court of Justice. The EEA court should have had the option to interpret EC legal acts adopted for the EEA that the ECJ had to consider, but the ECJ found this restriction on EC decision-making autonomy unacceptable. With that, it laid its finger on one of the fundamental areas of tension in the relationship between third states and the EC: homogeneity versus autonomy. The EEA aimed for homogeneity in the legal sphere, under the aegis of EC decision-making autonomy, but also under the auspices of equal entitlement for EFTA states. But all three principles could not be realised simultaneously; if both sides were to decide autonomously, a homogeneous result could not be guaranteed. And yet, if the legal sphere were not homogeneous, it would lead to discrimination against third states. As long as the EC committed itself to its own absolute autonomy in decision-making, it would be impossible for a third state to avoid discrimination in a political area or to preserve its own decision-making autonomy regarding equal entitlement. This basic problem – already identified by the Swiss government in its association attempt during the 1960s – was obviously renewed with the EEA.

Policy toward Europe 69 On 22 October 1991, one day after the close of negotiations, the Federal Council recommended that Parliament ratify the EEA treaty. At the same time, it downgraded this to a mere transitional stage and declared Swiss EC entry the ultimate goal of Swiss integration policy. The Federal Council explained this in its message about approval of the EEA treaty: It is a fact that the EEA treaty does not respect the fundamental of equality among parties to the treaty in all respects and especially fails to envision joint decision-making. Viewed in principle, the treaty reflects the European reality of today and the driving power that the EC represents in the ongoing process of rebuilding in Europe.22 Immediately after acceptance of Switzerland’s entry into the Bretton Woods institutions (the World Bank and International Monetary Fund, see subsection 8.4) in spring 1992, the Federal Council delivered to Brussels Switzerland’s application for membership in the EC. A bold step in view of the EEA-entry plebiscite ahead, this action followed the logic of the integration policy strategy announced the previous October. It would be clear to all that the EEA negotiations had not led to the desired results, and that entry into the EC would best serve Switzerland’s interests in the medium term. But the Federal Council lost courage. During its campaign prior to the EEA plebiscite, the government no longer wanted to link EEA and EC entry. It presented the EEA as a logical next step along the ‘third way’ that also opened a long-term prospect for Switzerland, completely independent of EC entry.23 In December 1992, only a narrow majority of the electorate, but most of the cantons, rejected the EEA treaty. Voter turnout reached 79 per cent. After the EEA rejection, the Federal Council proposed acceptance of bilateral and sector-based negotiations. The foreign policy report published in 1993 confirmed that EU entry24 was a strategic foreign policy goal.25 The application had been in Brussels for nearly two years but was considered ‘frozen’. The EU accepted negotiations with Switzerland in seven sectors: agriculture, public procurement, technical trade barriers, air transport, research, free movement of persons, and land transport. These talks continued until 1998; Switzerland needed more time than Sweden, Austria and Finland for their entry negotiations. Using the principle of proportionate parallelism, the EU had assured that progress within the seven sectors would be achieved at the same pace. This prevented the draft agreements from individual conclusion, but only as a total package. In contrast to the bilateral approach of the 1970s and 1980s, administrative bodies also received positive or active integration elements: Switzerland assumed EC law in sub-sectors, but not just for lifting barriers, as in negative or passive integration. In May of 2000 some 67 per cent of the electorate voted to accept the bilateral agreements. The Federal Council offered a strong defence of the proposal, calling it the most important step for integration policy since acceptance of the free trade agreement of 1972. It was a custom-made solution for Switzerland, the Federal Council stressed, but not necessarily a first step toward EU membership.

70 Policy fields The following spring, the electorate and majority of cantons rejected the popular initiative ‘Yes to Europe’ that sought to obligate the Federal Council to initiate EU entry negotiations immediately. Then, in July 2001, even before the first series of bilateral agreements took effect in mid-2002, talks began on a second series of bilateral negotiations. This involved the so-called ‘left-overs’, i.e. issues that were not treated during the first series, such as services, pensions, processed agricultural products, environmental policy, statistics, education and the media. The EU also wanted to take on the areas of taxation on interest payments and combating customs fraud, while Switzerland preferred to deal with the areas of justice and police, as well as asylum and migration (particularly the Schengen and Dublin treaties). The Federal Council barred banking secrecy as a topic for negotiations. 5.1.5 Dual challenge for the negotiating process As in other countries, leaders of Swiss negotiating teams are challenged on two fronts: first, to achieve negotiating goals at the international level and second, to achieve necessary approval nationally.26 Yet in Switzerland this dual challenge is stronger than elsewhere, thanks to the broad possibilities inherent in direct democratic decision-making (see chapters 3 and 4). ‘Dual’ success requires that external room for manoeuvre is accurately analysed and that this information is communicated effectively at home. Working within the NRP 42 framework, Dupont et al. compared the integration policies of Switzerland and Austria during the 1990s.27 Despite a comparable position at the outset, the two countries reacted differently to the challenges that arose at the end of the Cold War and to further development of the integration process. While Switzerland for a long time held firmly to the so-called ‘third way’ – a compromise between the ‘lone wolf’ approach and EU entry – Austria decided early-on in favour of EU membership. In reference to economic policy goals, Dupont et al. regard the Austrian strategy as clearly more successful. Austria managed to revitalise its economy, while Switzerland’s economic flexibility remained static vis-à-vis the EU. For Dupont et al., this difference in behaviour is explained by the governments’ desire (even their need) to develop an integration policy that both corresponded to home conditions and accounted for goals abroad as well. A ‘coherent’ policy would do both. Swiss authorities broadly misjudged the situation at the end of the 1980s when they overrated the options of a ‘third way’. When they realised this during the EEA’s exploratory and negotiating phases and adopted a policy better adapted to the foreign situation, they failed to prepare the public adequately for the shift, thus destroying the framework of domestic options. Conversely, in Austria the government unmistakably came out early-on in favour of EU entry. Such firm policy laid the groundwork for the electorate’s approval in 1994. We believe, however, that the Dupont group accounted too little for the special conditions affecting Swiss integration policy, particularly direct democracy.

Policy toward Europe 71 The preservation of these special features was the clear goal of Swiss integration policy, according to the Federal Council’s 1988 integration report and its 1990 information report.28 Thus, from the outset, conditions in Switzerland differed sharply from those in Austria, more so than the Dupont group assumed. However, this point does not undermine the central points of their conclusions.

5.2 The impact of standing on the sidelines During the years that followed the ‘No’ to the EEA, a number of sector surveys sought to illuminate the economic effects of Switzerland remaining on the sidelines. Aside from a few areas (such as the mechanical engineering industry), these surveys never found definitive, noteworthy negative outcomes. Remaining on the EEA sidelines certainly meant a few added hurdles (e.g. in public tendering or product licensing), but it had almost no proven and quantitatively significant negative impact on the economy (with two exceptions: the textile economy and the machinery industry). Various studies conducted within the NRP 42 framework show Switzerland’s inability to dissociate itself from the influence of EU decisions and policies. However, these effects – and even Switzerland’s ability to influence the EU – depend greatly on the policy sector and current Swiss responses and capacities. The following models illustrate this, using the example of policy affecting cartels, currency and transport, and the position of legal entities from third states in the European Court of Justice. Switzerland accepted EU influence passively during the de-cartelisation process of the 1980s and 1990s. The public need to harmonise Swiss law on competition with that of the EU is reflected in a comparable view on competition and a similar legal structure. The European influence appears most clearly in the car-sales sector, while it is much less demonstrable – if at all – in the banking and insurance industries. Within the car-sales sector, strong similarities appear between the approaches of Swiss and European authorities and informal arrangements of a vertical or horizontal nature, while the banking sector reflects at least a methodological parallelism. In the insurance sector, increasingly intensive competition activated the Swiss Cartel Commission, which led to dissolution of the related Swiss cartel. Stoffel and Deiss recommend that Switzerland, to achieve closer cooperation, enter future exchanges partnered with European competition authorities.29 Switzerland cannot shield itself from exposure to currency policy influences from the Euro zone. The Euro strengthens the impact on Switzerland of economic booms in surrounding European countries, since a greater synchronisation of economies follows. According to Genberg, Switzerland’s entry into the common economic and monetary union could mean greater macro-economic stability.30 However, giving up monetary autonomy would be costly for Switzerland – for example, if so-called ‘outside shocks’ forced adjustments in the exchange rate. Based on Switzerland’s negotiations with the EU on land transport, Maibach et al. show that if the Confederation has clear goals, specialised know-how and

72 Policy fields negotiating skills, it can influence the EU from the outside.31 Take, for example, Switzerland’s success in interweaving the change in its own transport policy system (from weight limits to one based on price) as a central point in negotiations with the EU. Switzerland would not have succeeded had it not had its own concepts regarding transport policy or if it had not developed negotiating strategies in earlier years. A network analysis of transport negotiations showed that Switzerland knew how to link the technical and diplomatic levels. All participants knew how direct democracy affected Switzerland’s negotiating position, and that helped to strengthen it. Both Switzerland’s flexibility in its negotiations with foreigners and its edge in achieving domestic policy concessions were largely predetermined. Moreover, Switzerland’s status as a direct democracy strengthened the negotiating delegation’s legitimacy, both at home and abroad. One research team asked how enterprises and individuals from third states upheld their legal status in legal procedures before the ECJ (the EC’s proper court and court of first instance) and the European Commission, as the Commission may rule in connection with administrative procedure.32 The study was based on a survey of enterprises from third states concerning their impressions of procedures before the bodies mentioned, on interviews with representatives of attorneys’ offices that specialise in EC law, and on talks with representatives of these bodies. Statistical assessments of the ECJ’s jurisdiction supplement the surveys. The majority of enterprises surveyed felt fairly treated. Yet enterprises from third states – including Switzerland – underestimated the Commission’s powers over legal entities not domiciled within the Community. Serious problems surfaced, particularly in the case of anti-dumping law, where handling by the Commission and Council was not viewed as compatible with the spirit (and, in some cases, the wording) of related GATT/World Trade Organisation (WTO) law. Furthermore, the calculation raised suspicion that some half of all retaliatory tariff cases against third states restricted competition. But the overall impression gives a fairly positive picture. The EU cannot be blamed for treating enterprises from third states – and especially Switzerland – worse than its own.

5.3 Options for the future 5.3.1 Economic and political interests Europe is by far the most vital region for Switzerland, and, for geographic and economic reasons, Europe remains Switzerland’s most important trading partner.33 However, one must be cautious about suggesting that the EU and Switzerland are mutually dependent. Switzerland does rank as the EU’s second most important trading partner (after the United States), but when measured by total EU trade volume (including trade between member states and with third states), trade with Switzerland amounts to just a few percentage points. For Switzerland, however, trade with the EU is vital (see subsection 8.2). Political reasons compound the EU’s importance to Switzerland. In general, the EU

Policy toward Europe 73 represents a community of cultures and values similar to that of Switzerland. In its 1993 foreign policy report, the Federal Council identified noteworthy overlap of EU foreign and security policy interests with those of Switzerland.34 The 1999 integration report confirmed this.35 Even without entering the EU, Switzerland has numerous legal tools for shaping its relationship with the Union. Some of these are autonomous (e.g. adaptation of EU law), while others require treaties. With regard to content, the 1998 bilateral agreements were a success – in particular, the agreement on freedom of movement. This offers a sort of laboratory in which to introduce, under controlled conditions, complete but step-by-step freedom of movement for people. If something fails to work – even unilaterally – the emergency brakes can still be applied. Yet, these forms of cooperation with non-EU-members show little potential for development. This especially affects Switzerland’s ability to shape and influence decision-making within the EU institutional framework.36 In the case of the airtransport agreement, EC law prevails, giving the Community exclusive control of standards, thus disqualifying Switzerland from a role in further developing related standards. Switzerland also has an interest in cooperating with the EU’s second pillar (common foreign and security policy, or CFSP, and European security and defence policy, or ESDP) and third pillar (justice and home affairs). The third pillar concerns domestic security needs, which have intensified since the terrorist attacks in New York and Washington in September 2001. Switzerland would like a role in EU foreign policy, particularly in developing civil crisis management and related peace-building capacities. In the past, however, the EU has closely guarded participation in these sectors; it is questionable whether a third country like Switzerland would ever gain fair access to such a core political area of the EU without also having to make the basic financial and market concessions. Or is there a compromise between complete entry and the bilateral approach? 5.3.2 Differentiated integration as an alternative Differentiated integration is not to be confused with the ‘remaining difference’ that exists when guidelines, legal acts or policies leave member states room for manoeuvre, or when the Community and Union have not been active in certain areas in the past.37 Differentiated integration refers to a situation in which states within the association have differing rights. Two forms are possible: ‘Orthodox’ differentiation concerns temporary exceptions granted by the EU out of more-or-less objective grounds; EU bodies monitor these. They offer almost no difficulties but do not solve states’ differing views on the pace of integration, a problem solvable only through heterodox differentiation. ‘Heterodox’ differentiation applies to exceptions permitted by the Union for subjective reasons. One must distinguish here between ad hoc exceptions, involving treaty revisions for individual states, and contractual regulations, which apply to all states (intensified cooperation).

74 Policy fields The 1997 Treaty of Amsterdam raised hopes since it involved flexible forms of intensified cooperation, showing that there were more than just rigid legal categories based on an all-or-nothing principle and promising either standard EU membership or none at all. One should not conclude, however, that the new options created opportunities for partial legal orders, territorially differentiated legal acts, or even the basis for breaking into existing structures (particularly supranational ones). The differentiated member-states’ approach evident in the Treaty of Amsterdam is pragmatic, rather than a piece of a rearranged EU concept.38 In preparing the Amsterdam document, various states asserted that intensified cooperation could not take place in the Common Market. Restrictive procedural rules confirmed this view, but the document was introduced anyway. Areas of exclusive EC responsibility are taboo; common policies cannot be restricted; discrimination among member states is forbidden; trade cannot be the basis for exceptions; competition cannot be constrained.39 No heterodox differentiation exists in the internal market, and orthodox differentiation is permitted only reluctantly on a take-it-or-leaveit basis.40 A study of existing or potential forms of heterodox differentiation within the EU shows that clear limits exist for this sort of differentiation with regard to the logic of market creation, the specialities of Community law, the interplay of EU bodies, the member states’ obligation to act in solidarity, and the EU’s identity. These result directly from the organisation’s basic structural principles.41

5.4 Entry as the only future alternative Switzerland stands to benefit from bilateral negotiations with the EU, as shown by a series of recent treaties. These treaties clearly are further-reaching than they would have been under the bilateral approach of the Luxembourg Process in the 1980s. Inherent in the bilateral approach are a few basic problems that, for structural reasons, would largely be present in any renewed EEA approach (as we described earlier). The only remedy is stepped-up institutional and political involvement in the EU. Because there is no future for this sort of differentiated integration, the only remaining medium or long-term alternative is EU entry. The Federal Council came to similar conclusions in its 2000 foreign policy report reconfirming the goal of Swiss entry into the EU.42 But the Swiss government formulated conditions for initiating entry negotiations. First, Switzerland must assess its experience in implementing the first seven bilateral treaties. Second, it must devote more study to the impact of entry on the Swiss political system and various Swiss policies. Finally, it required broad domestic support. The following section presents a few findings from NRP 42 that help to clarify the last two conditions.

Policy toward Europe 75 5.4.1 Impact on Parliament and direct democracy Swiss membership in the EU would lead to a shift in weight from the legislative to the executive body. The government would have to compensate for this, to strengthen the Federal Assembly’s influence on Federal Council activities within the EU framework (see also subsection 3.5). Epiney et al. propose the following:43 1 2

3

4

establish a European affairs committee in each chamber; obligate the Federal Council to provide detailed information on EU developments to Parliament or the European affairs committees; this would require changes at the legal level (law governing business conducted between the National Council and the Council of States); if authorised, grant the European affairs committees special rights to deliver their opinions directly to the Federal Council. (Arranging this would require legal grounds, as opposed to the authority of other committees); obligate the Federal Council to consider the opinions of either the European affairs committees or the whole chambers. This implies an obligation to justify disagreements with the chambers’ opinions, necessitating a constitutional amendment.

The structures of direct democracy would remain basically intact, with Switzerland maintaining its current means of legitimising democracy. However, the preconditions of European Community law would restrict the application of direct democracy, thus requiring isolated adjustments. In case of referenda (mandatory or optional), if the European law were inflexible, the Federal Council would be empowered to enact the measures necessary to avoid invalid referenda. As for the popular initiative, the Constitution should list Community law as a material barrier for the right to instigate an initiative.44 Analysis of the impact of EU entry and related proposals for changes affecting Switzerland are not detached from general questions on the Union’s democratic legitimacy. If greater integration leads to a stronger democratising of the EU, Switzerland would inevitably have to ask itself whether this compensates for the transfer of direct democratic or legislative authority from the federal to the European level. 5.4.2 Impact on federalism In addition to the EEA debate, questions also arose regarding intensified participation in foreign policy conducted at the cantonal level. The cantons criticised the federal government for presenting negotiation results as a fait accompli directly affecting several areas of their authority.45 In the case of EU entry, these questions would become even more urgent, even if the cantons were allowed to be directly involved in the EU Committee of the Regions. Three of the research projects carried out under NRP 42 concluded that the partial loss of cantonal autonomy to shape decisions stemming from international agreements would have to be offset by focusing on cooperation. The Federal

76 Policy fields government, which is responsible for monitoring implementation of international agreements, also depends on the cantons’ readiness to carry them out. The model of federalism defined exclusively by strong self-determination must change; it must be supplemented by adequate options for cantonal participation in the foreign policy decision-making process at the federal level, presupposing a readiness for dialogue between the federal government and cantons, as well as between the cantons themselves. Even if the cantons received ample opportunities for influence, the ultimate responsibility for foreign policy must remain with the federal government. The cantons’ role in implementing international law must be unified, but the federal government must still make full use of the cantons’ implementation knowhow.46 The federal government should also consider the cantons’ trans-border cooperation (low-ranking foreign policy), not only as cantonal regional policy that addresses trans-border problems, but also as part of its own foreign policy, particularly regarding integration. Such a foreign policy – fine-tuned through cooperation between federal and cantonal governments – should lead to an increase in shared synergies and cantonal identification with the effort to strengthen federal foreign policy, thus requiring feedback on foreign policy for those operating at the domestic level. Raising cantonal involvement in federal foreign policy is an appropriate development and adaptation of Swiss federalism to a changing world.47 5.4.3 Impact on Switzerland’s foreign and security policy Goetschel studied the influence and autonomy of four countries (Denmark, Austria, Sweden and Switzerland) regarding human rights policy, disarmament control, non-proliferation and crisis management.48 The four pursued comparable goals but rated their autonomy and influence very differently. In areas in which Switzerland was able to achieve its goals as often on average as the other three nations, this was due to its pursuing the same plans (and, thus, navigating the same water) as the EU. However, in terms of size and voting weight, the Swiss clearly influenced policy formulation less than the other three countries. And, according to self-ratings, even Swiss autonomy was no greater than that of the other three. EU entry would therefore give Switzerland increased foreign and security policy power: the Swiss would gain influence without any notable loss of autonomy (see also subsection 6.5). 5.4.4 Domestic policy support and control of integration policy Lutz and Schlange studied the attitudes of advocates and opponents to EU entry.49 They found that the two groups based their views not on different information, but on two different models of Switzerland and the EU, whereby political elements overshadowed economic ones.

Policy toward Europe 77 The models vary less with regard to special strengths and values attributed to Switzerland than to the role played by the Swiss leadership, the possibilities Switzerland would gain as an EU member to influence policy, and how they judge the EU’s political goals and their consequences. Both sides are convinced they are right, and both want to win. Yet they have common interests; in particular, neither wants the entry decision to be based on insecurity and the fear that Switzerland has no alternative if it wants to survive economically. This raises the question of how and where a shift in domestic public opinion on integration policy could occur. Without delving into scenarios depicting economic pressures, economists studied the political effects of anticipated economic fallout if Switzerland approaches the EU for possible entry. They worked from the basic assumption that, although such an approach could lead to overall economic improvement for a small country like Switzerland, it would also entail structural adaptations and subsequent losses in some areas. They then identified the winners and losers (by sector) of Switzerland opening itself to Europe.50 An analysis of the EEA plebiscite of 1992 supported the notion that those who stand to lose economically if Switzerland further approaches the EU carry greater weight than those advocating it: the nay-sayers vote systematically against reaching out to Europe, while advocates are not as committed to their views. This could result in a ‘No’ at the polls, despite the overall advantages of the policy being considered. The analysts thus propose economic compensation for the potential economic losers.51 According to political science studies, economic motives are secondary in decisions on European proposals; basic political convictions are more critical.52 (This includes membership in political ideology groups and attitudes toward Swiss traditions and myths.) Foreign policy plebiscites show that the arguments of those opposing outreach tend to address the motives of those voting ‘No’ better than do the arguments of advocates for those voting ‘Yes’.53 Thus, broad domestic support, the third condition set by the Federal Council for acceptance of entry negotiations, is surely the most important one to fulfil – but it is also the most difficult.

Summary Switzerland’s neutrality policy has overshadowed its policy toward Europe since the end of the Cold War, making Swiss participation in the EEC or the Council of Europe out of the question. The change in the international political landscape at the outset of the 1990s, and the deepening integration process that accompanied it, posed new challenges for Switzerland. Swiss experience with the EEA pointed to two sets of difficulties: first, that of negotiating treaties with the EC, in which Switzerland’s possibilities for institutional joint decision-making stood in balance with the treaty content and, second, the difficulties Swiss authorities faced in maintaining political consistency at home while also presenting and making necessary corrections to the Confederation’s foreign policy.

78 Policy fields Switzerland’s decision to remain on the sidelines is hardly measurable in economic terms; it is equally difficult to assess the potential economic gains and losses of EU entry. The effects are clearer in the political and legal arenas, where EU influence is more easily determined. EU entry provides the only viable alternative to bilateral policy in the medium and long term. Bilateral policy is developing in such a direction as to anticipate step-by-step the political effects of EU entry – for example, free movement of people or transport policy. Hence a future proposal for entry may lead to discussions that focus above all on institutional and political issues, such as federalism and direct democracy. Besides assessing the effects of entry on these institutions, the debate would also need to address means of compensation at the European level.

6

Peace and security policy

The federal government has the constitutional duty of preserving the independence and security of the country (Art. 2, § 1 FC) as well as contributing to its peaceful coexistence with other nations (Art. 54, § 2 FC). Traditionally, peacebuilding is a task of foreign policy while preserving independence always fell under the domain of security policy, to which foreign policy would contribute so-called ‘outreach components’. The changing international scene brought independence and peacebuilding closer together. The Federal Council’s 1999 report on security policy summarised the two tasks under the heading ‘security through cooperation’. Peacebuilding and crisis management figure here as the most likely strategic tasks for Switzerland’s security policy.1 Such a link would have been less likely in an official security policy paper during the Cold War, although the terms ‘peace’ and ‘security’ overlap in many ways; even the tools for implementing them are linked. The following subsections examine the most important aspects, followed by a review of how Swiss security policy has developed. An overview of various concepts and activities in peacebuilding includes both disarmament and arms control policy. The chapter closes with the central challenges for future peace and security policy, as well as suggestions for policy design.

6.1 What does security mean? And what does peace mean? A motto repeated during the Cold War asserted that people seek peace and states seek security. While people clung to utopias, states secured their survival as political collectives within an anarchic international setting.2 Scholars, politicians and officials who called themselves ‘realists’ granted no intrinsic significance to the concept of peace.3 Likewise, they seldom questioned the security concept that accompanied it, thus avoiding discussions that referred to the higher interests of national security.4 Yet, security is hardly value-neutral.

80 Policy fields 6.1.1 Security Borrowing from Lippmann, we define security as the protection of important material and immaterial values from certain threats.5 The content of security policy depends on both the units to be protected (‘security subjects’) and the perceived threats. Security subjects may include the individual, the state or higher aggregated collectives, such as regions or even the world. Accordingly, the focus can be individual or human security, or it can be state, regional or global. Traditionally, threats were defined as events with potential military repercussions. Since the 1980s, however, economic, social, ecological, or even political and cultural changes have also intensified. Depending on the security subject, the core values to protect from military threats include the physical safety of individuals, national territorial integrity, and the absence of regional or global military conflict. Analogous to this, ‘globalisation’, ‘Chernobyl’ or the ‘clash of civilisations’6 represent threats for economic, social, ecological, or political and cultural security. Hence, security considerations reflect not only the reaction to an objective international threat, they also define which political, epistemological and ethical values are relevant. Therefore, identification of threats and staging threat scenarios is not a politically neutral process. Indeed, a threat’s perceived potential for harm may not relate directly to its actual potential, as in the USA’s fear of the Soviet Union at the founding of NATO.7 Theories, reports and white books on security policy say much more about the core values that society considers worth protecting. The more open and broadbased the drafting process, the better society’s viewpoints can be understood.8 6.1.2 Peace If ‘security’ refers to the lack of certain threats, ‘peace’ characterises the condition in which the causes of threats have been lifted. Peace presumes more than merely preventing outbreaks of violence; it also means removing the causes of potential violent outbreaks. This includes striving for just international and inter-societal relations, as well as for tackling conflicts non-violently. A peace-oriented approach to policy aims to transform conflicts peacefully, not to prevent them from springing up. Thus, war should be eliminated as a means of settling inner and inter-societal conflicts. Ethically, peace is an all-embracing goal, but in practice, it is a distant one, a ‘regulator’ based on the hope that it spares use of violence when the civilisation process reaches inter-societal and international levels.9 In practice, then, peace is especially important as a process: the task of bringing about peace always has limits. 6.1.3 National peace and security policy If discussion focuses on state peace and security policy, by definition it turns primarily to the state as a player, but other objects determine security, too.

Peace and security policy 81 Individual insecurity or even regional threats can lead to state insecurity. The core of state peace and security policy centres on the absence of war and other forms of violent conflict. But since the end of the Cold War, the spectrum of threats has spread continuously to include more than just military ones. State peace and security policy does not generally address the social, economic, and ecological problems that may overlap with security but do not fall under its auspices. Policy makers are interested in these issues only when they are considered causes of military or other forms of violent conflict. Peace and security policy should not be mistaken for so-called internal security, yet certain aspects of human security can be relevant to state security: serious human rights violations endanger democracy and increase the risk of war, for example. And mining of land prevents economic and political reconstruction of war-torn areas and thus is detrimental to consolidating peace.

6.2 Development of Switzerland’s security policy 6.2.1 The Cold War era and the 1973 report From the end of the Second World War to the end of the Cold War, the Federal Council believed it had only a few opportunities to influence the international setting, though it is crucial for Swiss security policy. Switzerland could make only limited contributions to the general order of peace and security, it maintained, so Swiss security policy should confine itself to preserving independence. As a result, Switzerland’s existence as a predictable and stable state was its contribution to European security.10 Only in 1973 did the Federal Council formulate a security policy strategy that included the concept of ‘comprehensive defence’.11 In the context of the Cold War, threats (arising from various war scenarios) and pessimism (regarding the potential for international cooperation) marked the government’s image. Its focus remained fixed on military defence of Switzerland. In addition, it introduced the so-called ‘active outreach’ component of security policy, whereby foreign policy would be responsible for issues within the framework of comprehensive defence. Yet in practice the government took few serious steps in the policy arena, working rigorously to expand the army instead. Swiss security policy thus remained mainly concerned with military and defence policy until the end of the Cold War. Switzerland’s participation in the Conference on Security and Cooperation in Europe (CSCE) was its only effort to cooperate on institutional security policy with foreign countries. The Swiss remained outside the two military alliances – the North Atlantic Treaty Organisation (NATO) and the Western European Union (WEU) – as well as the collective security framework of the United Nations.12 While neutrality ruled out entry into a military alliance, it could not justify keeping the UN at arm’s length. Switzerland’s distance from the UN resulted from a foreign policy steeped in a highly restrictive and exaggerated understanding of neutrality that began at the end of the Second World War.13

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Box 6.1 Collective security and collective defence A collective security organisation seeks to avoid the use of military force but to protect the territorial integrity of member-states. Its membership structure is universal, and all states within a region – or throughout the world – should belong to it. To achieve its goals, the organisation makes mediators, arbitration courts and courts of justice available for the peaceful settlement of conflicts. If a state attacks another member militarily, the other members can collectively impose economic and, if necessary, military sanctions against the aggressor. Participation in such sanctions is mandatory for all member states. Sanctions involve international police measures that are not regarded as acts of war by international law, and neutrality law is not applicable. Examples of collective security organisations are the League of Nations and the UN. The Organisation for Security and Cooperation in Europe (OSCE) pursues similar goals, but lacks the tools needed for sanctions. A collective defence organisation aims to secure protection for member states from military attacks by third states. It is a military alliance, limited or made exclusive by its membership structure, and member states have a mutual, mainly military duty to assist other members. In case of attack, the so-called ‘alliance situation’ applies, and the members discuss retaliatory measures among themselves. European examples of collective-defence organisations include NATO and the WEU, as well as the earlier Warsaw Pact of East Bloc states.

This did little to alter the fact that Switzerland, according to Mantovani, was clearly regarded as a Western country during the Cold War: ‘During the Cold War,’ he wrote, ‘Switzerland found itself so obviously in the western camp that those there could only wish all neutrals or neutralists would have been oriented to the Swiss example.’14 For US President Kennedy, for example, there was no problem in Switzerland remaining neutral, as long as it did not oppose his intent to create a smooth-working Western economic community to prevent a recession in the West.15 An exception to Switzerland’s security policy abstinence was the CSCE process, beginning at the start of the 1970s. It emerged from the détente policy between the superpowers and the inner-German dialogue. The participation of all Western and Eastern European states, the lack of legal obligations and the purely consensual working approach allowed Switzerland to take part as well.16 6.2.2 The 1989 political turnaround and the 1990 report Political turns in 1989–90 accelerated changes in Europe. The Western European integration process took another qualitative step forward with the Maastricht Treaty. The fall of the Iron Curtain, together with the end of the divide on the

Peace and security policy 83 European continent, defused Switzerland’s most important neutrality-based excuses for remaining outside cooperative efforts at the security policy level and in international politics. The Federal Council accounted for this development in its 1990 report on security policy, extending the security concept to non-military threats and basically opening the possibility of Swiss troops taking part in security policy cooperation in Europe.17 It was the first official position on security policy that applied a suitable policy to identify opportunities – not just dangers – for Switzerland.18 The report did contain much ‘old’ thinking, however, suggesting that Switzerland should also ‘defend’ itself against so-called new threats in the economic, ecological and social areas. As in the past, Switzerland’s military combat and defence tasks dominated the report. The potential of conducting peacebuilding projects appeared as little more than an afterthought to the conventional roles of the army – a verbal admission of the changing European setting. Dividing the past from the future of security policy may have made sense as a basis for discussion, but the report offered no guidelines for further-reaching reforms. Iraq invaded Kuwait at this time. The use of a broad-based coalition of states against Iraq, legitimised by the UN, required Switzerland to decide whether it would demonstrate its solidarity. The Federal Council did join in enforcing UN economic sanctions,19 but it refused to allow the international coalition’s military aircraft to fly over Swiss territory. This was a contested decision, and after the Gulf War the government appointed a commission of experts to review neutrality’s role in the new international setting. In its 1992 report, the commission stressed the instrumental importance of neutrality, but said it was no end in itself. Rather, its significance stemmed from whether it helped Switzerland achieve its foreign and security policy goals. It was conceivable, the commission asserted, that nation-state sovereignty could better be attained via intensified international cooperation than by remaining systematically on the sidelines.20 This idea found its way into the Federal Council’s 1993 foreign policy report, which earmarked a clearly more active Swiss role in international events, including EU and UN entry. The government justified its shift in opinion by noting that Switzerland’s foreign and security policy interests now differed less than ever from those of its European neighbour states; as a rule, then, the Swiss should act in solidarity with them in international organisations. Neutrality’s place as a foreign policy tool was downgraded; standing neutrally on the sidelines would occur only in cases of emergency.21 Yet the government and its agencies had more difficulty enforcing these strategic goals than it did writing and approving them. 6.2.3 1996: openness or muddling through? The year 1996 was especially eventful for Swiss security policy. Switzerland assumed the presidency of the OSCE, and it entered the NATO Partnership for Peace (PfP) initiative. The Swiss could not predict the challenges that accompanied

84 Policy fields its assuming the OSCE presidency. During that year, the Dayton peace accords on Bosnia-Herzegovina presented the OSCE with its greatest operational task to date. The OSCE support group also played a decisive role in Chechnya’s peace process. According to Federal Councillor Flavio Cotti, the OSCE chairman and then-head of the DFA, in assuming this task, Switzerland wanted to show (among other things) that ‘in view of the fundamental strategic changes during recent years, a small and neutral country can also act in solidarity and openness in contributing within the framework of the new challenges’.22 The Swiss experience as OSCE president showed that: (a) a traditional country regarded as a small state in Europe’s institutional structure also had considerable options for action; (b) foreign and security policy traditions should be reviewed in light of the changed international setting; and (c) diplomatic ‘good offices’ are sought when supply and demand are in balance, not primarily because of old traditions.23 Switzerland publicised its OSCE presidency, but kept preparations for its participation in the NATO PfP quiet, in closed session. Fearing a negative response, the Federal Council even wanted to avoid parliamentary debate. When public discussion nonetheless developed, the government stressed the compatibility of Swiss neutrality and participation in the PfP so much that it led to a rekindling of the debate – long believed resolved – on the course of neutrality.24 NATO’s heads of state launched the PfP cooperation programme (customtailored to the individual partners) in January 1994, during the course of the military alliance’s post-Cold War outreach and reform. Though mainly directed toward potential member states in Eastern Europe, it also opened new options for neutral and unallied states to cooperate with NATO. In its PfP presentation document in October 1996, Switzerland emphasised its activities in the training sphere and its presentation of seminars and conferences, but stressed that it wanted to remain neutral and did not wish to enter NATO. 6.2.4 Security through cooperation: the security policy report of 2000 The 1999 security policy report contained important steps for further development. While the 1990 report assigned security policy the task of addressing threats caused by power politics, the 1999 report described it as ‘. . . that area of state activities which aims to prevent and defend against the threat and use of force of strategic magnitude’.25 The report mentioned three security policy goals: self-determination not influenced by force; protection of the population and its basic needs; and contribution to stability and peace in the international setting. In response, the Federal Council derived three sequential, strategic missions, ranked according to the likelihood of need: peace building and crisis management; prevention and management of existential dangers; and defence. In contrast to the 1990 report, in 1999 the goal of contributing to stability and peace beyond national borders assumed considerable significance. Priorities for security policy had clearly shifted from national military defence to international

Peace and security policy 85 outreach, and, based on the probability of need, peacebuilding and crisis management became the most important strategic tasks. Accordingly, a review of Swiss army priorities took place, with the emphasis shifting from defence to support for peace and overcoming crises in connection with peace support operations (PSO).26 Switzerland discarded its strategy of dissuasion, an ever-present feature of its Cold War-era policy that relied on a credible military defence to deter attacks from potential invaders. The cooperative element (included in the 1990 security policy report as a mere sidebar reflecting old thinking) actually was the motto of the 1999 report: national and international cooperation should be Switzerland’s strategy for pursuing its security policy goals. At the same time the importance of foreign policy (first mentioned in the 1973 report as a tool for security policy) increased substantially: peacebuilding became a central pillar of security policy. In 2001 the electorate approved a partial revision of the federal law on the military’s organisation, thus creating the legal basis for arming Swiss soldiers for deployment to UN and OSCE peace support operations.

6.3 Peacebuilding Peacebuilding aims for the peaceful transformation of potential or pre-existing armed conflicts, covering the entire conflict cycle from prevention and crisis management to consolidating peace and encompassing both civilian and military elements. It gained prominence as the central plank of the 2000 foreign policy report subsection, ‘Prevention of violent conflicts and reconstruction’.27 6.3.1 Prevention, crisis management and peace consolidation During the East–West conflict, ‘prevention’ essentially meant warding off global conflict or a Third World War. Highly technical military early-warning systems, atomic deterrence and high-level tools of crisis management (i.e. the ‘hot line’ between Washington and Moscow) were meant to prevent direct confrontation between the two blocs. Elements of arms control and détente policy supplemented prevention. The numerous post-Cold War military conflicts forced politicians and analysts to face facts: the tools that might have prevented military conflict previously would no longer suffice under the new conditions – particularly the inner-state conflicts that have, by far, accounted for the majority of post-Cold War military disputes. Neither global power structures nor unequal wealth distribution are the primary causes of violent conflict. The evidence points instead to local or regional tensions intricately linked with economic, political, historic, social and ecological factors. The idea of prevention assumes that questionable social problems and developments, and their related potential for violence, can be recognised and redirected early on. ‘Conflict prevention’ refers to actions, policies or institutions aimed at averting the escalation of inner-state or international conflicts into substantial

86 Policy fields violent conflicts. At the same time it seeks to point out ways to reduce conflicts before violence flares.28 Prevention requires skill in recognising conflicts early. This presumes earlywarning mechanisms that, once again, require insight into the genesis and dynamics of conflicts.29 Successful prevention usually demands that players involved change their perceptions about the conflict, thus defusing it and clearing the way for settlement.30 Development cooperation is especially important for so-called structural or longterm prevention (see also chapter 7), and it calls for much more than just renaming development cooperation ‘crisis prevention’. Crisis prevention becomes credible only when governments commit to it in the long term. This requires resources, staff and the systematic evaluation of development cooperation projects assessing conflict dimensions in the areas involved. Coherence must also be addressed.31 Crisis prevention is a cross-sectional task – for prevention to succeed, it must be compatible with other policy areas, such as foreign trade, agriculture and the environment. ‘Crisis management’ includes the political and military tasks and activities that third nations assume after the outbreak of violent conflict in order to reduce or end the violence. This includes diplomatic shuttle missions and also the dispatch of troops (with or without a UN mandate) to force an end to fighting between belligerent groups. ‘Consolidating peace’ refers to the peacebuilding phase that follows violent conflict. Measures such as rehabilitation, reconstruction and reconciliation, linked to military, political, economic and social welfare activities, should contribute to stabilising peace. Depending on the type of conflict and its international scope, third parties could be helpful for reconstructing civilian police, the judiciary and administration, and for preparing elections, providing humanitarian aid, protecting human rights, resettling refugees, disarming, demobilising and reintegrating combatants (regular and irregular forces). It is unclear whether states, international organisations or NGOs would be best suited for these tasks. To date, only a smattering of empirical case studies look at time frames and the various phases of peace consolidation, and there are absolutely no systematic comparisons and analysis patterns.32 6.3.2 Switzerland’s peacebuilding policy In the interest of solidarity, Switzerland has tried since the nineteenth century to make its offices available for mediation, to counter its hands-off policy (imposed by neutrality obligations) toward other states’ conflicts. The activities of these ‘good offices’ attempt to bring parties in conflict closer together, or at least to help defuse fiery relations. These services exert no political influence or pressure, striving instead to assume protective power mandates, provide conference space or offer arbitration assistance.33 More broadly, these services also include Swiss expertise in international law, particularly international humanitarian law. Switzerland’s strengths have long

Peace and security policy 87 focused on technical aid to support peaceful relations. But examples of successful Swiss mediation in open conflicts are not very numerous,34 and peacebuilding (as presented above) now extends far beyond the original passive offering of conference localities and ‘postman services’ to the belligerent parties. A survey of Swiss ambassadors (performed within the framework of NRP 42) concluded that, in comparison to serious prevention, Swiss foreign policy focuses too heavily on post-war stabilisation, when both elements merit equal attention. Domestic policy concerns (financial and migration policy issues, as well as preexisting positive or critical stances toward certain international organisations) often determine prevention services.35 According to those polled, Switzerland’s lack of multilateral support and involvement (as it was neither a member of the UN, at the time of the survey, nor the EU) negatively impacts the country’s peacebuilding efforts. But respondents cited few specific examples. They also asserted that Switzerland’s special institutional and historic position did not significantly impact Swiss prevention policy. On the one hand, Switzerland has great freedom in its choice of resources and target areas. On the other, it can make less use of this freedom in specific cases today, as its ‘good offices’ are so seldom sought out.36 Survey respondents also negatively rated Switzerland’s lack of international coordination, its prioritised policies, project policy monitoring, and weak influence on peace policy processes. The SDC recently took inventory of its violence-prevention and peace-consolidation activities in seven countries (Angola, Bosnia-Herzegovina, Mozambique, Nicaragua, Niger, Rwanda and Sri Lanka) between 1979 and 2000.37 In the area of development cooperation, its study confirmed a concentration on post-conflict reconstruction in contrast to genuine prevention services. At the same time it found a pronounced fragmentation of activities. Even within the SDC, coordination of planning and execution seldom occurs. Conversely, the SDC seems aware that development cooperation is never politically neutral and that policy must be harmonised among the players – especially the NGOs – in order to optimise the political potential.38 In addition to this stocktaking, the Federal Council has recently taken other measures that should help give Switzerland’s peacebuilding policy more influence and visibility. 6.3.3 Peacebuilding measures The Federal Council’s ‘Concept for Peace-Promotion Measures’ for 2000–03 suggests that Switzerland exploit its comparative advantages in this area: the ‘creation of democratic structures and the establishment of the rule of law, the nurturing of free media, the constitutional regulation of the problems of minorities, [and] the monitoring of human rights – in addition to economic aid’.39 Federal Council priorities zeroed in on (a) preventive diplomatic, confidencebuilding mediation activities; (b) promoting democratic structures, the rule of law, protection of minorities, and the ability to resolve disputes within civil society; (c) activities and measures contributing to promote human security; and (d) building up the range of tools and skills available for peace promotion.40

88 Policy fields Regarding the latter, the Federal Council proposed continuing current multilateral activities. Since the mid-1990s Switzerland has provided the OSCE with several missions and office leaders. It suggested bringing together existing pools of expertise (election observers, human rights observers, civilian police officers, etc.) for a corps of civil peace experts for OSCE and UN missions – an idea now implemented. In the bilateral sphere, the Federal Council envisioned creating capacities for long-term and systematic analysis of conflicts. This task includes building up contact networks with players both inside and outside the conflict areas. It also requires structured relationships between administrative agencies, NGOs at home and abroad, and local partner groups. As part of these efforts, the DFA’s Directorate of Political Affairs founded a ‘Center for Peacebuilding’ (KOFF),41 headquartered within the Swiss Peace Foundation (swisspeace) and supported by important Swiss relief agencies and NGOs. The Federal Council’s latest foreign policy report reflects numerous suggestions from the peace-promotion concept, and the Council announced its intention to make an essential, clearly visible contribution to the prevention of violent conflicts.42 6.3.4 Human security The Commission on Global Governance introduced the term ‘human security’ in its report, ‘Our Global Neighbourhood’, referring to the ability of individuals to live anywhere in the world free from physical harm, fear and arbitrary use of power.43 There is nothing new in the ‘human security’ concept per se; it essentially involves human rights, international humanitarian law, international criminal jurisdiction, efforts to prevent the spread of mines and small arms, and the struggle against the use of children as soldiers. The link between these areas (often separated in conventional analysis) underscores that dimension of security that focuses on the individual and stresses its importance as an indicator of peace. Prioritising human security also provides the basis for stronger involvement of non-governmental players such as NGOs and transnational enterprises in security policy concerns. With regard to early warning of crises, the status of a country’s individual citizens provides extremely valuable information.44 Measures to protect the individual during war-like disputes form the core of international humanitarian law – an area in which Switzerland is particularly duty-bound as the depository state of the Geneva Conventions. More specifically, Switzerland and the UN General Secretariat have tried in the so-called Interlaken Process (1997–99) to reduce the adverse effects of certain sanctions on civilian populations. It aims to impose differentiated ‘smart sanctions’ in the future.45 Switzerland also takes part in the Human Security Network, which collaborated with non-governmental players and supplied an important impetus for the UN Conference on Small Arms.46

Peace and security policy 89 Finally, Switzerland has taken a leading role in the anti-mines campaign staged by NGOs and various countries. This especially affects destruction of its own remaining mines.47 In December of 1997, Switzerland was one of the first states to sign an agreement forbidding the use, storage, production, and transfer of personnel mines and calling for their destruction. The Swiss ratified it the following year. Switzerland also conducted efforts to codify trade and transfer of small arms (i.e. conventional weapons that can be carried and operated by a person or team: pistols, combat weapons, machine guns, grenades, etc.). These efforts are directed against the proliferation and abuse of such weapons. Since the end of the Cold War, most conflicts have been staged almost entirely with small arms. Switzerland teamed with France at the UN Conference on Small Arms in July 2001, launching an initiative on tracing and marking weapons. It pursues preventive efforts, calling on states to set enforcement criteria and abide by them. The two countries specifically propose to trace small arms through information exchanged between states, as well as by weapon markings and registration.48 6.3.5 Contributions in the military sector Switzerland’s history and its neutrality policy have always made military services outside its national borders a sensitive subject. Swiss military observers have been available to the UN since the end of the Cold War, and Swiss medical units have already served the UN twice, in Namibia and the Western Sahara. After the electorate voted against the deployment of armed units (UN blue helmets) in 1994, Switzerland confined itself to sending a military logistics unit of about fifty people (yellow caps) to the OSCE mission in Bosnia-Herzegovina from 1996 to 2000. In 2001, voters approved revising the federal law on organisational aspects of the military, enabling Switzerland to participate in armed contingents during peace support operations mandated by the UN or OSCE, beginning in 2002. However, participation in acts of combat to enforce peace is forbidden. Swiss soldiers would carry arms only for self-protection and to help fulfil the task at hand. The Federal Council also wanted to test if and by what means Switzerland could contribute to future EU missions connected with the so-called ‘Petersberg Tasks’.49 According to the EU treaty (Art. J 7), these missions entail rescue operations, humanitarian and peacekeeping tasks, and the enforcement of peace and peacebuilding measures. In connection with the NATO PfP initiative, Switzerland took part in some 250 activities in 1999 and offered an additional 25 others, particularly addressing the strengthening of international humanitarian law, civilian–military cooperation, disaster relief, and modern information technologies.50 The decision to take part in the 1998 NATO Planning and Review Process (PARP), in connection with the PfP, improved relations with NATO and formed a basis for possible future military cooperation.

90 Policy fields

6.4 Disarmament and arms control policy Disarmament and arms control benefit both security and peace. They assume at least a minimum of trust among the states working together to agree on common security conditions. These assumptions were missing during the 1920s and 1930s. During the Cold War, disarmament and arms control measures were established in various areas involving arms of mass destruction, largely due to the nuclear threat, but they also applied to conventional weaponry. The responsible Swiss federal authorities gave very low priority to arms control processes during the Cold War. Even international initiatives were viewed somewhat sceptically – as soon as negotiations on arms-control requirements affected Switzerland. Brem et al. studied Swiss participation in international disarmament and arms control efforts from 1960 to 1999, mainly in the four sub-areas of chemical, biological and toxic weapons, as well as anti-personnel mines and small and light arms.51 At the outset of the 1990s, attitudes toward arms control and disarmament changed, as Switzerland realised (in connection with the chemical weapons convention) that monitoring requirements affected its business activities. Yet, active participation in the convention also proved useful for security policy, as it improved data acquisition and protected interests while serving as a proving ground for other foreign policy activities (negotiating experience, cooperation in multilateral networks, etc.).52 Consequently, Switzerland no longer contented itself with simply signing related agreements but began to take an active role in the negotiation process. Switzerland often participated in related efforts at the technical level. As a highly industrialised country, it possessed specific know-how that could contribute to the creation of new arms control treaties and institutions. For example, the Swiss took part in setting up the inspectorate of the Organisation for the Prohibition of Chemical Weapons (OPCW). With active support from the chemical industry, more than a hundred international inspectors were trained in Switzerland.53 The Confederation managed to depoliticise some sensitive questions by proposing practical, technical solutions. Swiss experts also supported other member states in implementing arms control agreements. Another NRP 42 study slightly tarnished this otherwise positive exchange, noting room for improvement in the implementation and enforcement of certain agreements related to military export controls.54

6.5 The challenge of change Uncertainty accompanies change. Since they are linked to changes in basic values, transition phases in foreign and security policy can be especially prolonged; their success requires consistent effort.55 It is hardly surprising, then, that Swiss peace and security policy at the turn of the twenty-first century seems a bit unclear and inconsistent, both conceptually and in practice. Since the end of the Cold War, development of Swiss security policy has been characterised by (a) decreasing practical relevance of neutrality, (b) increasing

Peace and security policy 91 importance of international cooperation, (c) expansion of the Swiss concept of security and (d) increased linkage of other political spheres within the peacebuilding framework. Swiss policy on international intervention in the Kosovo conflict illustrated the country’s foreign and security policy uncertainty in the new European setting. 56 This profoundly affected treatment of neutrality. Despite undisputed common political interests with surrounding European countries, Switzerland attempted on numerous occasions to pursue an independent policy that deviated from the other states, using neutrality as its justification. In April 1999 the DFA declared that Switzerland, too, would take part in the UN war-materials embargo (imposed since March 1998) against the former Yugoslavia. The department argued that neutrality did not apply when enforcing UN sanctions. Yet exactly one month later, the Federal Council decided against complete support of intensified EU sanctions, particularly the ban on petroleum delivery. Switzerland did participate in a first series of EU economic sanctions against the Federal Republic of Yugoslavia, although it, too, was not covered by a UN Security Council resolution.57 Switzerland took the middle road when assuring over-flight rights, permitting flights over its territory for humanitarian purposes but not for NATO aircraft involved in combat. From the perspective of international law, Switzerland could use logic to justify its neutrality during the Kosovo war.58 A UN Security Council resolution applied only in case of an arms embargo. Thus, it followed that Switzerland was free to choose whether to take part in other sanctions, according to its own desires. But, viewed politically, Switzerland had from the outset taken a position unmistakably in favour of NATO intervention in Kosovo.59 By holding to the first series of EU economic sanctions, Switzerland had already shown itself fundamentally prepared to join economic sanctions outside the UN’s auspices. The sudden change to a purely legal argument – one that in legal terms equalled NATO’s collective international campaign with the Serbian side – was somewhat disturbing. This example illustrates the tension that arises when the international setting changes but foreign policy tools such as neutrality are applied under the same ‘old’ rationale. International intervention in Kosovo was an unconventional war in both its goals and in the way it was conducted. Therefore, application of neutrality according to conventional reasoning yielded no satisfactory answer.60 Basically, political issues cannot be answered via purely legal approaches. This is especially true when the methods used are based on an outdated view of the international setting. Switzerland’s new concept of security policy appropriately prioritised international cooperation. Yet only when there is a strong distinction between collective police actions and conventional wars between states can international cooperation be reconciled with the concept of neutrality. Nor should neutrality keep Switzerland from political involvement in European cooperation efforts. At present, Switzerland is represented in every European forum it could join without needing a federal plebiscite. It is most intent on coordinating security policy

92 Policy fields with the EU’s common foreign and security policy. EU members appear increasingly united in current security policy issues, in international organisations and at international conferences. EU importance is likely to grow, especially in civil and military peacebuilding. Yet, given its role as an institutional outsider, Switzerland waives its right to play an active, constructive part when defining interests and policy in Europe. Swiss interests may indeed be identical to the EU’s – the country may one day feel as if it is in the same boat – but this is not the same as Switzerland being a member state, with the influence membership wields.61 Finally, broader understanding of security and threats still has not resulted in a corresponding redistribution of ways and means. The scope of Switzerland’s security policy – originally limited to the military defence arena – did broaden, thanks to the previously described conceptual reorientation and the emergence of a peacebuilding policy. But only since 2000 has the country authorised a notable budget for civil peacebuilding (now roughly SFr. 40 million).62 Yet this development must be kept in perspective. First, the operational costs of peacebuilding have risen considerably (e.g. the costs of de-mining). Second, SFr. 40 million is still very modest when contrasted with Swiss military spending, which is about a hundred times higher. The portion of the army’s total budget earmarked for peacebuilding is even more critically out of balance when compared to the related staff budget. Thus, although the 1999 security policy report urged priority for international cooperation and crisis management, we still await action. This is nothing new for Swiss security policy. The 1973 and 1990 reports also detailed partial acceptance of alternative views on security policy, and they, too, lacked follow-through.63 (After the Cold War, only a close inner circle participated in creating Swiss security policy. These select few made sure the focus was on values defined by domestic politics and the special characteristics of the Swiss political system, not primarily on strategic analysis of international conditions.) In view of the changing international scene, a comprehensive peace policy would necessitate an official concept for security policy, plus a link between the peace and security policy viewpoints. This could serve as Switzerland’s guideline for developing a sustainable security policy.64 A comprehensive peace policy calls for (a) weighing probable causes of violent conflicts; (b) a massive shift from military to civilian resources for peace and security policy; (c) a greater emphasis on international peacebuilding within the military; and finally (d) clear recognition of how peace and security affect Europe’s regional dimension (as opposed to purely national concepts). In addition to ensuring adequate distribution of resources, this would help to improve coherence between the defence department’s military and security policies, the DFA’s peacebuilding policies, and development cooperation. At least in terms of prioritising, such coherence65 would form the basis of a credible policy and would complement proposals by the Commission on Global Governance on human security, a stronger UN framework, prevention, and civil peacebuilding: the core components of a future-oriented security policy.66

Peace and security policy 93

Summary Switzerland’s security policy had a clear central task twenty years ago: military defence of the country. Over time, the defence concept expanded to cover comprehensive defence, including the non-military arenas. The end of the Cold War accelerated this departure from a pure defence mindset. Increasing interest in international peacebuilding and international cooperation accompanied the expanded security concept, and Switzerland broadened its resources and activities in both areas. Switzerland also excelled internationally in disarmament, arms control and human security. Yet, while the conceptual development of security policy (and its related approach to peace policy) is positive, it has never been matched by a satisfactory redistribution of financial and staff resources. The army’s defence role still dominates security policy in every respect, though when potential threats are outlined, the chance of a military attack on Switzerland rests at the bottom of the list. Special interests dominate army reform efforts, which pay too little attention to discussions on the future of Swiss security.

7

Development policy

This chapter emphasises selected aspects of Swiss and international development policy. We first discuss the concept of development and show how its meaning has changed over time. In the second part, we explain the reasons behind Switzerland’s commitment to development cooperation. The final sections focus on Swiss policy in this area from the standpoint of development goals at the international level, primarily organisation, content and public acceptance. We have intentionally omitted some important sectors since we have dealt with them elsewhere in this book (peace and security policy dimensions in chapter 6, aspects of foreign trade in chapter 8 and, in chapter 9, issues affecting conflicting goals and the coherence of Swiss foreign policy).

7.1 Development policy and development Development policy covers all measures ‘that aim at bringing about normatively defined change in the situation within developing countries at both national and international levels’.1 Hence, development policy is based on a politically defined goal that outlines what the measures should achieve; it is heavily influenced by normative thinking and never apolitical. This explains why actors committed to development policy cannot agree on a definition for ‘development’. Notions of how development can and should be stimulated have already triggered much controversy, and opinions still differ greatly.2 In its 1980 final report, the Independent Commission on International Development Issues, chaired by former German Chancellor Willy Brandt, concluded: ‘Development never will be, and never can be, defined to universal satisfaction. It refers, broadly speaking, to desirable social and economic progress, and people will always have different views about what is desirable.’3 This definition is equally relevant today. For lack of an international agreement on content goals (‘the desirable’), ‘development’ instead describes a complex process in current North–South relations that contradicts itself and varies according to the spirit of the times.4 In the 1950s, development meant modernisation – in keeping with the ideal of the Industrial Revolution – and aimed at overcoming the ‘primitive’ social orders in developing countries (modernisation theory).5

Development policy 95 Development meant economic growth. Dependence theory emerged as a countermovement at the end of the 1960s, presenting continued underdevelopment as the result of ‘unjust’ international economic relationships. As a solution it proposed redistribution and dissociation from the world market. The slogan for the 1970s was ‘redistribution with growth’. Proponents linked growth-oriented development strategies with redistribution plans, and combating poverty, satisfying the population’s basic needs, and promoting just development were the new major goals of development policy. But many representatives of local elites did not at all support turning away from national industrialisation policy. They feared that future development funds would pass them by, landing instead directly in the people’s hands. Growing concern over the ecological effects of development policy marked the 1980s, with the notion of ecologically and socially sustainable development gaining popularity. By the conclusion of the world summit in Rio de Janeiro, the catchphrase ‘sustainable development’ entered vocabularies worldwide at the start of the 1990s. At the same time, even the redistribution approaches were de-emphasised due to their lack of success in practice, just as earlier modernisation-theory strategies had been. By contrast, the world looked to the economic ‘tiger’ states of Asia as examples of success strengthened by growth-oriented policy. However, the triumph of liberal development approaches focused solely on the economy did not last long. The Asian crisis at the end of the 1990s showed that achieving economic success in the long term required accounting for social redistribution and consideration of participatory dimensions (democratisation, gender equality, empowerment for those in the lower social strata, and good governance). Two patterns appear in the unfolding of the development concept from the 1950s to the present. First, the strong role of the state as the development engine (both in modernisation and redistribution theories) has slackened considerably. Today’s development policy concepts focus instead on the individual and the local community – even when the state assumes an important role (see below), especially in the concept of good governance. This ‘individualising’ of development policy recognises that sustainable development is possible only in cooperation with local organisations and with consideration of local cultures’ peculiarities. Second, the realisation that developing countries are hardly a homogenous group required broadening the uniform, general definition of development. As Schläppi and Kälin note: On the contrary, a rapidly growing number of states with sharply differing framework conditions assembled behind this banner due to the decolonising process. A few very large countries stood next to many small ones, old nation states beside young countries hardly consolidated within their borders, countries rich in natural resources beside those poor in them. The countries of the ‘South’ differ significantly in their economic and social structures, their human resources, and their political systems.6

96 Policy fields Thus the diversity of needs and problems identified in developing countries demands development strategies customised to local conditions.

7.2 Why provide development aid? If foreign policy refers to the pursuit of interests abroad (see chapter 1), then what reasons has Switzerland for investing some US$ 1 billion in development policy? Many of the Swiss accept the view that the Third World amounts to an endless drain on resources. On the other hand, Switzerland goes to great pains to give the impression that solidarity is of special importance to its foreign policy. In the long term, the legitimacy of Swiss development policy depends on whether the following two questions may be answered in the affirmative: Are there good reasons for Switzerland to make publicly financed development aid available? Is the development-cooperation budget used effectively? The first question is relatively simple to answer. Switzerland – like all other wealthy countries – has an immense interest in advancing the development of the poorest countries. Arguments addressing this include: •

•

•

•

Morality and solidarity-related motives. It was European countries who profited (directly or indirectly) from the North’s colonial policies toward what are today’s developing countries, whether this meant access to raw materials, the forced recruitment of a workforce, or more space for Europeans looking to emigrate and colonise.7 Though Switzerland never developed a colonial empire, it too profited indirectly. Development policy measures recognise wealthy states’ common responsibility toward developing countries. Economic motives. Developing countries indicate an increasing need for consumer and investment goods, which benefits Swiss foreign trade. In addition, the Swiss domestic economy benefits from public development aid. In a study commissioned by the SDC, Forster and Pult (using 1988 figures) calculated that some 75 per cent of Swiss outlay for development cooperation directly impacted demand in Switzerland.8 About 15,000 jobs in Switzerland depend directly or indirectly on public development aid.9 Security and migration policy motives. Fewer migrants and asylum seekers leave developed countries than underdeveloped ones, meaning a lesser burden on Swiss migration policy. This results from the economic gap between North and South, which in addition to political tensions is a leading reason for migration.10 It is commonly assumed that increased development in politically unstable and poor regions of the world leads to domestic stability and predictability. On the contrary, ongoing differences in North and South living conditions threaten to greatly intensify political conflicts between them. The North–South cleavage could become successor to the (now-dissolved) East– West conflict.11 Humanitarian and human rights policy motives. In its ideal form, development parallels a country’s improvement in human and social rights. Thus a country like Switzerland, which lays great value on enforcing international law in these areas, must take a keen interest in Third-World development.

Development policy 97

Percentage share of world GNP

What have development efforts accomplished to date? The answer depends on one’s point of view. It can certainly be asserted that the main goal of development policy – bringing the social and economic living conditions in the South into line with those of the North – is not achievable today. The gap between average incomes in the world’s richest and poorest countries has risen sharply during the last ninety years, from 16:1 before the First World War to 64:1 today.12 This points to a continually widening gulf in the income discrepancy between rich and poor and may be linked (with great disappointment) to stagnation among political institutions, which has been visible since decolonisation (especially on the ‘troubled continent’ of Africa). Using economic growth to measure the efficiency of development cooperation hardly improves the picture. An empirical study by Weder concludes that development aid per capita has a slightly negative correlation to economic growth.13 This may be blamed on false assumptions when choosing countries worthy of support, says Weder. Selection is based all too often on strategic considerations of financial donors, not the political potential and desire of local governments for political and economic reforms. Former colonies, states that toe the donor’s political line in international organisations, and countries in strategically important positions regularly receive more funds than others. Yet, despite this sombre picture, some positive signs point to improvement for developing countries over the last twenty years. Individual countries such as India and China, as well as regions such as Southeast Asia and Latin America, actually have made great development progress. Viewed worldwide, the number of people in absolute poverty declined between 1987 and 1998, from 28 per cent to 23 per cent. (Although presented as a worldwide figure, this upturn occurred mainly in the regions mentioned above.) In terms of worldwide gross national product the proportion of developing countries has risen sharply since the 1970s (see Figure 7.1). In response to criticism

100.0 75.0

59.9

58.7 53.4 41.3

50.0 25.0

28.4

27.0

0.0 Long-term trend before 1950

1950

1973

1998

Time axis Africa, Latin America, Asia (excluding Japan)

Western Europe, North America, Japan

Figure 7.1 Development by percentage of the world’s gross national product (developing and industrialised countries) Source: Maddison (2001) The World Economy: A Millennial Perspective. Paris: OECD; own calculations.

98 Policy fields Table 7.1 Development of UNDP Human Development Index (HDI), 1975–99

Western Europe & North America Latin America & Caribbean Africa Asia (excluding former USSR/Japan)

HDI, 1975 Average

HDI, 1999 Average

HDI Change 1975–99 Percentage

0.885 0.653 0.387 0.532

0.960 0.741 0.478 0.663

+ 8.5 +13.5 +23.4 +24.5

Source: UNDP (2001) Human Development Report 2001. New York: Oxford University Press; own calculations. Note: The HDI varies between zero and one (highest development stage).

that development includes other factors of social and political change besides purely economic ones, the UN Development Programme (UNDP) created the so-called Human Development Index (HDI), which should be viewed as an all-inclusive development index. Using the HDI since the 1970s as a yardstick, developing nations have made crucial – if partial – progress (see Table 7.1). The success of development efforts to date cannot be judged wholesale. Yet it is striking that so many of the most desperate cases occur in Africa, particularly in countries south of the Sahara. Indeed, twenty-eight of the thirty least-developed states (i.e. with the lowest HDI values) lie in Africa.14

7.3 International development goals and the concept of good governance The four large international development institutions – the UN (especially the UNDP), the OECD (in the form of its Development Assistance Committee or DAC), and the Bretton Woods institutions (IMF/World Bank) – released a joint document in 2000 specifying their top-priority development policy goals through 2015 (see Table 7.2). These pertain to the general struggle against poverty, improving the education sector, promoting gender equality, improving health care systems, and furthering sustainable use of environmental resources.15 The concept of good governance has played a central role in achieving these goals since the early 1990s. The World Bank was the first institution to recognise that ‘effective economic and political management is impossible if government and administration act arbitrarily and without transparency, and nobody needs to assume accountability’.16 Development agencies consider the maintenance of good governance principles today as central to successful social, political and economic development. Principles of good governance include: rule of law, efficient and effective management in the public sector, classification of economic and finance policy responsibilities (accountability), measures to contain corruption, reduction of excessive military spending, and development-oriented allocation of public funds.17

Development policy 99 Table 7.2 International development goals 1 Reduce by half between 1990 and 2015 the proportion of people living in extreme poverty

As growth increased globally in the mid1990s, poverty rates fell – rapidly in Asia, but little or not at all in Africa. Income inequality is a barrier to progress in Latin America.

2 Enrol all children in primary school by 2015

Although enrolment rates continue to rise, they have not risen fast enough. On current trends, more than 100 million school-age children will not be in school in 2015.

3 Make progress towards gender equality and empowering women, by eliminating gender disparities in primary and secondary education by 2005

Getting more girls through school is essential but not enough. The gender gap may be narrowing, but girls’ enrolments remain persistently behind those of boys.

4 Reduce infant and child mortality rates by two-thirds between 1990 and 2015

For every country that cut infant and under-5 child mortality rates fast enough to reach the goal, ten lagged behind, and another one moved backwards, often because of HIV/AIDS.

5 Reduce maternal mortality ratios by three-quarters between 1990 and 2015

Skilled care during pregnancy and delivery can do much to avoid many of the half million maternal deaths each year. But the proportion of births attended by skilled personnel rose slowly in the 1990s.

6 Provide access for all who need reproductive health services by 2015

Contraceptive use is one indicator of access to reproductive health. With progress in access to reproductive health services, the rate of contraceptive use is rising in all regions.

7 Implement national strategies for sustainable development by 2005 so as to reverse the loss of environmental resources by 2015

Despite their commitments at the Rio Earth Summit in 1992, fewer than half the world’s countries have adopted strategies, and even fewer are implementing them.

These principles, which not only obligate state actors but parts of the private sector and civil society as well, also serve as a precondition for participatory development, democratisation, and promotion of human rights. Yet implementing the principles of good governance succeeds only when country-specific social, cultural, and economic structures and values are considered.

7.4 Structure and content of Swiss development policy Swiss development policy is typified by both horizontal and vertical task distribution. Horizontal distribution results from the rough subdivision of development aid since

100 Policy fields SDC Executive

Development Policy and Multilateral Cooperation

Cooperation with Eastern Europe and CIS

Thematic and Technical Resources (e.g. conflict prevention, good governance)

Bilateral Development Cooperation

Humanitarian Aid

Figure 7.2 The most important SDC sections

the early 1960s into (a) technical aid, headquartered in the DFA’s SDC, and (b) economic aid offered by the DEA’s SECO. Even today a division of labour occurs between the SDC and the SECO; SDC outlays alone account for about 80 per cent of the bilateral aid resources. This justifies a brief glimpse at the inner structure of Switzerland’s federal development aid agency.18 Viewed vertically, the distribution of tasks clearly shows the SDC’s primary involvement in strategic planning and on-site project coordination, while private aid organisations (e.g. Intercooperation, Swisscontact, Helvetas, Caritas and Swissaid) often assume implementation of individual projects. Hug and Mesmer showed the close relationship cultivated by private relief agencies and the federal SDC, even as a sign of historically grown ‘pluralistic corporatism’:19 Swiss public development aid has always built on the activities of private organisations, developing a mutually dependent bond over the years. Swiss development policy has long operated from a technocratic view typical of neutral states, maintaining that development aid functions best without political meddling, and needs only technical know-how and sufficient money.20 Although (or perhaps because) Swiss development aid goals were largely free of geo-strategic considerations, the Swiss avoided political discussions with recipient countries on sensitive topics such as human rights or good governance. Only after the end of the Cold War was Switzerland ready at the international level to integrate these and other ‘political’ elements into the development cooperation programme. On the other hand, the goals of the development aid law of 197621 remain marked by political restraint typical of that era. It would have been useless to search for statements on promoting good governance or human rights, and on treatment of minorities, equality between the genders, and democratisation. The SDC’s current operating policy is oriented only indirectly toward the 1976 goals, as evident in the ‘2010 Strategy’ outlining the SDC priorities.22 Switzerland chooses the geographic orientation of its development aid according to the nature of the need (poverty and vulnerability to crises), a region’s comparative advantages, Switzerland’s foreign policy interest, and the political conditions in the

Human rights Corruption Conflict prevention Public spending, including fiscal policy and state institutions – Global governance – The media as a fourth power – Culture

– – – –

Vocational training Finances Basic infrastructure Knowledge and technology

– – – –

– Economic growth – Small businesses (production and services) – Agricultural production and marketing

– Natural disaster prevention – Migration and reintegration of victims of conflict – Food aid – Management of manmade environmental catastrophes

– Division of labour between state/civil society/private sector – Rule of law – Local government and administration/ decentralisation

– Conflict-focused cooperation – Emergency aid – Rehabilitation and reconstruction

Priority areas

Supplementary or specific areas

Priority areas

Priority areas

Income generation and employment

Supplementary or specific areas Supplementary or specific areas

Good governance

Crisis prevention and management

Table 7.3 SDC development priorities

– Education for disadvantaged people – Health care – Land-use rights and land reform – Knowledge and technology – Appreciation and development of culture – Social networks

Supplementary or specific areas

– Poverty and distribution – Empowerment – Gender equality

Priority areas

Increase of social justice

– Agricultural production and ecology – Protection of natural resources from pollutants – Energy efficiency – Mountain ecosystems – Fight against desertification

Supplementary or specific areas

– Biodiversity – Soil and water

Priority areas

Sustainable use of natural resources

102 Policy fields developing country involved (good governance, democracy and human rights).23 This leads to the question of whether and how application of political conditionality should influence Swiss relations to a developing country (see subsection 9.4). Geographically, Swiss development aid focuses above all on African countries south of the Sahara, which receive almost 25 per cent of bilateral aid funds. Three other regions receive lower priority: Southern and Central Asia (13 per cent), and Latin America and Eastern Europe (12 per cent each). Due to the Kosovo crisis of 1998–9, of all countries Yugoslavia by far received the most aid (9 per cent of bilateral funds), followed by Bangladesh, Mozambique, India and Tanzania (4–5 per cent each). Development cooperation constitutes only about 75 per cent of bilateral aid. The rest flows into multilateral funds such as the Bretton Woods institutions and various regional development banks. No consistent picture emerges when distinguishing between ‘conventional’ development aid and humanitarian aid over the years. The portion of humanitarian aid fluctuates between 10 and 30 per cent of the bilateral development budget and depends greatly on current political events. Cooperation with Central and Eastern European countries and the Community of Independent States (CIS), which benefited from support funds after the political events of 1989, represents a special case. Due to the extraordinary circumstances lasting until 1996, the DFA Political Division I – not the SDC – coordinated Eastern European aid. Even the legal basis for Eastern European aid was not created until 1995. The SFr. 1.65 billion credit line paid previously was still based on an ad hoc situation. An NRP 42 study examined the degree to which Swiss and European aid to the former Eastern bloc was geographically congruent.24 The geographic and political orientation of the aid package was of particular interest as it moved in different directions over the years, despite a high degree of geographic consistency at the outset. While the EU increasingly aimed its support programme at countries likely to join it in the short or long term, Swiss aid to a large degree supported states still outside the EU waiting room. This commitment is less altruistic than it might seem at first glance, however, as some of these countries number among those led by Switzerland in the Bretton Woods institutions (see chapter 8).

7.5 Scope and acceptance of Swiss development policy Switzerland boasts about its humanitarian tradition, with the Red Cross and the Swiss Humanitarian Aid Unit often serving as advertisements. In terms of resources allocated for development policy, however, Switzerland is not an international leader, as shown in Table 7.4. Although the Federal Council has set an intermediate goal of 0.4 per cent of GDP,25 Switzerland has clearly represented the interests of the North in opportunities stemming from North–South relationships – especially those affecting foreign trade.26

Development policy 103 Table 7.4 Official development assistance (ODA) in international comparison (1998)

Denmark Norway Netherlands Sweden Luxemburg France Belgium Finland Switzerland Ireland Canada Japan Australia Great Britain New Zealand Germany Portugal Spain Austria Italy Greece USA

ODA In million US$

ODA In % of GDP

1,704 1,321 3,042 1,573 112 5,742 883 396 898 199 1,691 10,640 960 3,864 130 5,581 259 1,376 456 2,278 179 8,786

0.99 0.91 0.80 0.72 0.65 0.40 0.35 0.32 0.32 0.30 0.29 0.28 0.27 0.27 0.27 0.26 0.24 0.24 0.22 0.20 0.15 0.10

Source: OECD (2000b) Examen en matière de coopération pour le développement: Suisse. Paris: OECD.

The Swiss population accepts the country’s ‘humanitarian tradition’ with reservations. In a 1999 survey by the GfS Institute,27 for instance, 73 per cent of those polled said they were satisfied with the level of spending on development cooperation – or they wanted it reduced. Some 79 per cent believed that development aid funds should be reallocated to needy people in Switzerland. So far, Swiss development policy has only twice been exposed to direct democracy. In 1976 the electorate rejected a Swiss loan to the International Development Association, and in 1992 the proposal to enter the Bretton Woods institutions received only a relatively close majority. However, the Bretton Woods proposal was anything but a clear-cut development policy proposal; both the far right and left opposed it politically, including groups engaged in development policy.28

Summary There are good reasons to pursue a development policy, both from the viewpoint of solidarity and from vested national interest. Highly developed states are usually less involved in war-like conflicts and represent more stable sales markets and markets of origin for foreign trade. Their citizens are also less likely to migrate in large numbers.

104 Policy fields There is little consensus on the measures and strategies for achieving international development. Among development theories, two main lines of conflict emerge: economic liberalism versus redistribution, and state versus individualcentred focus. Every approach can boast successes but must also admit failures; single-minded development approaches clearly do not adequately address the multi-layered and heterogeneous needs and problems of developing countries. The SDC and the SECO coordinate most Swiss development aid (horizontal distribution of tasks), with operational tasks in the field often left to private development NGOs (vertical distribution of tasks). This arrangement shows forms of ‘pluralistic corporatism’. In terms of content, five goals drive the SDC: crisis prevention and transformation, good governance, promoting income and job creation, raising social justice, and the sustainable use of natural resources. Geographically, Africa receives more than any other region by far. The events of 1989 firmly established Eastern Europe and the CIS in the SDC programme as well. Yet Switzerland can hardly take excessive pride in its ‘humanitarian tradition’ or ‘solidarity’, given its relatively mediocre support of development aid (when compared internationally) and the electorate’s critical stance toward development policy efforts.

8

Foreign trade policy

From the standpoint of Realpolitik, foreign trade policy forms the starting point and traditional core of Swiss foreign policy. Preservation of commercial interests stands out as a field of especially active and successful participation, while other areas in the neutrality policy context . . . are characterised by a low-profile tradition of servile restraint.1 Switzerland’s post-war concept of neutrality left an indelible mark on the role of foreign trade policy. When debating entry into an international organisation, the Swiss must time and again weigh the undesirable loss of sovereignty against the desirable improvement in foreign commerce. This pattern is evident not only in the specific case of European integration (see subsection 2.3 and chapter 5), but also in the seemingly epic entry discussions on the GATT, the Council of Europe and the Bretton Woods institutions. For decades the government told the electorate that Switzerland based its foreign trade policy on four pillars: bilateralism, small-state identity, free-trade orientation and neutrality; the following sections more closely examine the viability of these pillars. This chapter also provides general information and a realistic picture of Swiss foreign trade policy.

8.1 Fundamentals and concepts Foreign trade policy dictates how a country shapes and regulates its cross-border business.2 As evident from the list of foreign policy tools below (see Figure 8.1), this definition should be interpreted in its broadest sense. Foreign trade goals take high priority in Swiss foreign policy, but not due to any legally based hierarchy. The foreign policy goal of promoting Swiss welfare does appear (alongside other goals) in the Constitution but is based purely on national motives. Art. 101 FC defines the federal government’s foreign trade authority: Article 101 Foreign Trade 1 The Confederation shall safeguard the external interests of the Swiss economy.

106 Policy fields 2 In special cases, it may take measures to protect the domestic economy. It may, if necessary, depart from the principle of economic freedom. The Swiss preserve business interests abroad in two ways: by shaping optimum market entry conditions for Swiss enterprises abroad and by strengthening Switzerland’s international competitiveness.3

Multilateral tools a) Europe: b) Global:

• • • •

EFTA membership OECD membership WTO membership Membership in UN organisations (UNCTAD, UNIDO, UNCED, ILO) • Membership in the Bretton Woods institutions (IMF, World Bank) • Conclusion of most-favoured nations treaties outside Europe (within EFTA framework) • Membership in G-10 group of states (in ternational financial issues)

Bilateral Tools a) EU: • Various treaties (bilateral agreements, free -trade agreement) b) Liechtenstein: • Customs and currency union c) Economic cooperation agreements (general expansion of trade and economic cooperation; anchoring of WTO principles) d) Investment protection agreements (protection against arbitrary treatment and expropriation) e) Dual taxation agreements (avoidance of international dual taxation and regulation of taxation conflicts) f) Mutual recognition agreements (removing trade barriers through transparent technical standards) g) Swiss Import Promotion Program (SIPPO) (simplifying access to Swiss markets for developing countries) Autonomous Tools a) Export promotion:

• Export and Investment Risk Guarantee (ERG/IRG) • SOFI (Swiss Organization for Facilitating Investments) advises small and medium-sized enterprises on investment plans in developing countries • SDFC (Swiss Development Finance Corporation) makes risk capital available for investments in developing countries • OSEC (Swiss Organisation for Trade Promotion) provides information and advises the SME on sales opportunities abroad • Trade missions b) Business location promotion and tourism marketing c) Export controls and sanctions**

Figure 8.1 Most important tools of Swiss foreign trade policy Note: ** Since UN entry in 2002, Switzerland is no longer autonomous in applying binding Security Council sanctions (see also subsection 8.6).

Foreign trade policy 107

8.2 Switzerland’s economic involvement Analysis of Swiss foreign trade policy often assumes that the Swiss economy – and thus the welfare of the entire population – depends largely on export revenues. ‘Every other franc is earned abroad’ is often quoted4 but somewhat exaggerated,5 as Table 8.1 shows. Despite popular opinion, Switzerland’s economic involvement abroad is no stronger than that of other medium-sized European states (Table 8.2). The Swiss economy does have its own unique features, however. For example, Bernegger mentions Switzerland’s high degree of foreign direct investments, as well as its development of an international finance and investment centre.6 The high number of foreign direct investments by Swiss enterprises also helps to explain why, since the early 1990s, there have been more employees in Swiss enterprises abroad than domestically. According to Henneberger, in all the world only Switzerland can claim this.7 The agricultural and raw material sectors play a relatively small role in Swiss foreign trade. This is another important characteristic of Swiss foreign trade, though hardly surprising for a highly industrialised country that is increasingly more service-oriented.8 Dependence on exports, based on total sales, amounts to between 60 and 90 per cent in the most important industrial sectors; in the services sector it is far below 50 per cent.9 Switzerland receives top ranking worldwide in patent registrations per capita, suggesting that the goods exported are primarily research and developmentoriented products: Switzerland cannot and does not compete on wage costs – it has probably the highest in the world – nor on reserves of primary products. What it does compete on the basis of, and what justifies those wage costs, is the high degree of technology, creativity and other forms of human ingenuity incorporated in its exports of goods and services.10 Table 8.1 Switzerland’s foreign trade quota over the course of history (in percentage of gross national product)

Import quota Export quota Involvement index*

1840 1887 1913

1925/ 1937/ 1950 27 38

1963

1988

19981

18.5 44.6 16.0 35.8 34.5 80.4

28.3 21.9 50.2

33.0 25.0 58.0

29.3 26.4 55.7

36.2 39.7 75.9

46.1 33.0 79.1

19.2 14.8 34.0

24.9 21.1 46.0

Sources: Tanner (1990) ‘Die Schweiz und Europa im 20. Jahrhundert: Wirtschaftliche Integration ohne politische Partizipation’, in Bairoch and Körner (eds), La Suisse dans l’économie mondiale. Genève: Droz, p. 414; Vogel (1966) Les conditions de la politique commerciale de la Suisse. Montreux: mimeo; WTO (2000a). International Trade Statistics 2000. Geneva: WTO; World Bank (2000) World Development Indicators 2000. Washington: World Bank; own calculations. Notes: * Sum of import and export quotas (according to Armingeon, Klaus (1996). ‘Integriert und isoliert: Die Schweiz im Prozess der Globalisierung’, in Klaus Armingeon (ed.), Der Nationalstaat am Ende des 20. Jahrhunderts. Bern: Haupt, p. 13. 1 Including services.

39.7 44.6 66.3 81.7 36.7 40.4 45.2 36.2 97.8 29.1 27.3 27.4 11.2 11.9

36.2 46.3 61.3 76.1 35.2 32.4 39.7 35.4 89.5 28.1 24.9 29.0 13.5 10.3

(% of GNP) 1998

(% of GNP) 1998 75.9 90.8 127.6 157.8 72.0 72.8 84.9 71.6 187.3 57.2 52.2 56.4 24.7 22.2

1998

Involvement Index*

28,092 2,163 19,516 15,005 8,733 6,116 11,796 7,931 4,080 5,133 5,068 11,237 4,186 2,316

(per capita in US$) 1999

Foreign direct investments: outward stock

10,296 2,884 13,709 17,049 7,019 3,181 7,644 7,138 11,884 2,751 3,095 6,676 4,023 307

(per capita in US$) 1999

Foreign direct investments: inward stock

1.4 1.4 3.4 2.9 0.7 0.6 1.4 0.9 1.1 8.6 5.2 5.4 14.3 5.9

In % 1998

Portion of world trade1

Notes: * Sum of import and export quotas (according to Armingeon (1996): 13). 1 Goods and services. 2 Including Luxembourg.

Sources: WTO (2000a) International Trade Statistics 2000. Geneva: WTO; World Bank (2000) World Development Indicators 2000. Washington: World Bank; UNCTAD (2000) World Investment Report 2000: Cross-border Mergers and Acquisitions and Development. New York: United Nations; own calculations.

Switzerland Austria Netherlands Belgium2 Norway Finland Sweden Denmark Ireland Germany France Great Britain USA Japan

Imports1

Exports1

Table 8.2 Indicators for Swiss foreign trade in international comparison

Foreign trade policy 109 Switzerland is clearly intensely involved in the world economy. Yet in which markets has it become most deeply integrated? And what sort of exchange does it cultivate with developing countries? The following paragraphs focus on the geographic orientation of Swiss trade. Table 8.3 shows the most important supply, sales and investment markets for Swiss foreign trade, broken into world regions and country groups. EU states clearly dominate Swiss foreign relations in every sector – no surprise, given geographic and cultural proximity, as well as the stream of goods regulated on a free trade basis (beginning in 1960 with EFTA and since 1973 with the EC/EU). The consistency of the European market is noteworthy. In the years between the world wars and since 1965, annually some 70 to 80 per cent of Swiss exports have gone to European countries.11 Progress in economic integration and planned EU expansion to East Europe may further consolidate Europe’s strong position. The Central and Eastern European countries (CEEC) have in various ways been assimilated rapidly into the European free trade system.12 Both Switzerland and the EU have guaranteed the CEEC generous reconstruction aid. Since the mid-1990s the EU has concentrated primarily on candidates for EU entry. By contrast, Swiss aid tends to target states that have struggled with major difficulties (e.g. countries in Southeast Europe, the Ukraine, or Russia). During the same period, the entire Asian market leapt forward, with its share of Swiss exports rising from 10 to 18 per cent between the Second World War and the mid-1990s.13 For an export-oriented country like Switzerland, enhancing its position in growth markets is of crucial importance. From time to time critics claim that Switzerland orients its foreign trade policy too rigidly to the Old World and too little to East Asia and the NAFTA zone. Kneschaurek, for example, suggested that Switzerland concentrates too much on the European market, asserting that it can no longer remain there due to high wage costs and its failure to join the EU and EEA.14 He recommended a reorientation to markets in the Pacific Rim. The Federal Council seemed to agree with these conclusions to some degree, announcing a shift to markets outside Europe in its 1995 report on foreign trade policy.15 Since then, Switzerland has signed EFTA free trade agreements with Mexico, Turkey, Israel, the Palestinian National Authority, Jordan, Morocco, Singapore and Chile. Agreements are pending with Canada, Tunisia, Egypt, Lebanon and South Africa (Status: 2003). Yet, suppose that similar agreements outside Europe also make both political and economic sense – what are the limits of such a strategy? Borner et al. have used theoretic simulation models to estimate development of Swiss trade outside Europe and to suggest which trade policy strategies Switzerland ought to use to address potential challenges.16 The authors’ calculations present a clear picture: Europe will remain Switzerland’s most important trade partner by far, even if regions outside grow in importance. The more uncertain and protectionist global trade conditions become in the future, the more persuasive their forecast.17

100.0

Total

100.0

79.3 7.6 6.9 6.2

100.0

47.3 27.0 6.0 19.7 100.0

68.3 24.7 4.5 2.5 100.0

59.6 1.2 1.9 37.3

inward

Migration (1998)

100.0

59.0 19.0 1.9 20.1

outward

100.0

69.1* 12.9 13.5**