Seanad Éireann debate -
Wednesday, 21 Nov 2001

Vol. 168 No. 14

European Communities and Swiss Confederation Bill, 2001: Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister for Foreign Affairs (Mr. Cowen):

The European Communities and Swiss Confederation Bill, 2001, was published on 15 November. The purpose of the Bill is to give the force of law, once they are ratified, to seven sectoral agreements which have been signed between the Euro pean Union and Switzerland. The seven agreements cover the following areas: free movement of persons; air transport; rail and road transport; trade in agricultural products; mutual recognition in relation to conformity assessment; Government procurement; and scientific and technological co-operation.

The agreements were signed in Luxembourg on 21 June 1999 and will enter into force after ratification by all the parties. Switzerland ratified the seven agreements on 16 October 2000 following their approval by the Swiss people in a referendum. The ratification process is well advanced in the EU and it is expected that the necessary procedures will be completed in the near future. The seven agreements are linked in the sense that they can only come into force together and they will all come to an end if any one of them is terminated. This was at the insistence of the EU, which argued that the agreements satisfy the interests of both sides only as a complete package.

The Agreement on the Free Movement of Persons differs from the others in that it requires ratification by the 15 member states as well as the European Union and Switzerland. This is because it covers matters which come within the competence of member states. The other six agreements require formal ratification only on behalf of the European Union and Switzerland. However, as they include references to various EU directives and regulations which need to be adapted to take account of their future application to Switzerland, the Bill, when enacted, will ensure that all the necessary adaptations required to give effect to them are made. The Bill is modelled on the European Communities (Amendment) Act, 1993, which provided for the ratification of the European Economic Area Agreement.

As Senators will appreciate, the European Union's relations with Switzerland are of special significance. Switzerland is very close to the Union, not only geographically where it is surrounded by EU member states, but also economically and culturally. Figures published by EUROSTAT show that Switzerland is second only to the US as a market for EU exports. Swiss direct investment in the EU is second only to that of the US and represents almost half of the non-US direct investment in the EU. Switzerland is also the second largest recipient of EU direct investment after the US. Other statistics show that Switzerland is the country in Europe with the highest number of non-national EU residents, with a population of over one million, and it receives 95% of EU cross-border workers, with 150,000 EU citizens crossing the Swiss border to work every morning. Thus as the EU's most important European partner, there is mutual interest in a widening and deepening of relations.

While Switzerland had participated in the negotiations on the European Economic Area Agreement, the Swiss people subsequently voted in a referendum against participation in that agreement. Accordingly, the European Economic Area, following the accession of Sweden, Finland and Austria to the European Union, now consists of the 15 member states of the Union, together with Norway, Iceland and Liechtenstein. The result of the referendum in Switzerland rejecting the EEA Agreement also meant, in addition to the country not being able to participate in the EEA, that its request for accession to the EU, which had been transmitted in May 1991, had to be frozen and remains so to this day, although Swiss membership of the European Union remains a "strategic objective" of Government policy.

Accordingly, bilateral relations between the EU and Switzerland continue to be based on a number of existing agreements, including the 1972 Free Trade Agreement, a framework agreement on scientific and technical co-operation and a transit agreement. However, as both the EU and Switzerland recognised the need for a closer formal relationship, in their mutual interests they proceeded to negotiate the seven additional sectoral agreements signed in June 1999.

On the occasion of the signing of these agreements, the parties made joint declarations indicating an interest in negotiating agreements in a number of other sectors. Since June 2001, negotiations have been under way on co-operation against fraud; the environment; co-operation on statistics; and a liberalisation of trade in processed agricultural products. Further negotiations in areas such as trade in services, participation in Union programmes on training, youth and media, savings on taxation and co-operation in the area of justice and home affairs and the Schengen agreement are currently under consideration.

I shall deal briefly with the seven agreements which are the subject of this Bill and, first, with the Agreement on the Free Movement of Persons. This agreement will provide broadly for the free movement of persons between the EU and Switzerland. It aims for the granting on a reciprocal basis of the same living, employment and working conditions as those enjoyed by the respective citizens. It covers rights of entry, residence, access to employment, the right of establishment on a self-employed basis, access to education and the right to benefit from reciprocal social security arrangements. It provides for the mutual recognition of educational qualifications and the co-ordination of social security systems. All these rights are based on the principles of non-discrimination by nationality and equality of treatment. The agreement affords Switzerland a transition period to facilitate the liberalisation of its labour market. This agreement is intended to last for seven years when Switzerland will either renew it indefinitely or repudiate it.

As far as the social security aspects of this agreement are concerned, Ireland has a bilateral social security agreement with Switzerland which came into force on 1 July 1999 after the signature of the free movement agreement. The majority of persons covered by the free movement agreement are covered by the bilateral agreement, although the benefits of the EU agreement will be more beneficial as short-term benefits, and family benefits are included. The provisions relating to old age benefits are also more beneficial. However, having regard to the level of migration between Ireland and Switzerland, it is considered that the additional costs arising from the social security provisions of the free movement agreement will be minimal. Irish citizens resident in Switzerland will benefit from similar arrangements.

The Agreement on Air Transport provides essentially for the reciprocal liberalisation of aviation, on the basis of previous Community agreements. It covers air traffic rights for journeys between any point in the Community and any point in Switzerland, for carriers registered in either party. Two years after the entry into force of the agreement Swiss air carriers will be granted traffic rights between points in different Community countries.

Monitoring of compliance with this agreement, especially as regards the implementation of competition law, will be under the responsibility of the Commission and the European Court of Justice. In return, Switzerland will have observer status in the committees assisting the Commission to define the evolution of European air transportation policy. This agreement therefore creates a unified legal regime for air transportation, based on strict reciprocity between rights and obligations conferred within the EU and Switzerland.

We welcome this further liberalisation of air transport within Europe, with Irish carriers benefiting by being granted greater access to operate air services between Switzerland and the EU. Swiss carriers will be granted reciprocal rights two years later.

The Agreement on the Carriage of Goods and Passengers by Rail and Road deals in particular with the maintenance of the freedom of transit for road vehicles across Switzerland, at a reasonable level of charging. The 28 tonne limit for trucks circulating in Switzerland will be progressively raised to 40 tonnes, the European standard. It provides for the avoidance of traffic diversion from Switzerland into neighbouring countries, the reciprocal liberalisation of bilateral and transit road transport operations, the adoption by Switzerland of legislation equivalent to specified elements of the road and rail transport aquis communitaire, with a timetable for the progressive adoption of Community rules on vehicle weights and dimensions, and compliance by Switzerland with Community rules on state aids to road transport.

The Agreement on Trade in Agricultural Products is expected to improve significantly access for agricultural products to the EU and Swiss markets respectively, while abolishing tariff and non-tariff barriers to trade according to the principle of reciprocity. A large number of tariff concessions have been granted for plants and flowers, fresh or prepared fruit and vegetables, cheeses and milk products, meat products and wine. The agreement also seeks to facilitate trade through mutual recognition of legislation on plant protection, animal feedstuffs, seeds and organic farming. It includes veterinary rules designed to facilitate trade in live animals and animal products. In the case of live animals the legislation of both sides is deemed to be equivalent and for animal products trade will be based on Community legislation. The agreement also provides that Switzerland will apply the same rules as the Community to imports from third countries.

The proposed agreement will provide increased export opportunities for Ireland over a range of products. The section on trade in wines and sprits, which provides for mutual protection of protected names, will afford protection for Irish denominations such as Irish cream and Irish whiskey.

The purpose of the Agreement on the Mutual Recognition of Conformity Assessment is to establish mutual recognition of the results of tests of conformity to standards for most industrial products. Both parties will thus recognise reports, certificates, authorisations and labels of certification delivered according to their respective procedures. The effect is that products can be certified by recognised conformity assessment bodies in the European Union and placed on the Swiss market without having to undergo any further approval procedures, and vice versa. This will result in reduced costs and increased efficiency for obtaining product approvals and will facilitate market access. The agreement lists the various sectors to be covered, including machinery, toys, medical devices, telecommunications terminal equipment and a range of others.

The National Standards Authority of Ireland, NSAI, has been notified under EU procedures as a conformity assessment body, CAB, for many of the sectors mentioned in the agreement and NSAI supports any agreement that leads to better mutual recognition of certificates of conformity. As the NSAI is already accredited in a wide range of sectors, the implementation of this agreement does not pose any administrative or technical problems for it.

The right of fair access to Government contracts is most important and the Agreement on Certain Aspects of Government Procurement will help ensure this. It aims at ensuring harmony between the public procurement regimes of the European Union and Switzerland and to provide for greater reciprocal access to the public procurement markets. The agreement focuses only on certain aspects of public procurement as account has been taken of the already existing agreements in the framework of the WTO Government Procurement Agreement. Overall, an almost complete reciprocal opening of the respective public procurement markets will be achieved.

The Agreement on Scientific and Technological Co-operation will associate Switzerland with the EU's Fifth Framework Programme for Research, Technology and Development and the corresponding Fifth Framework Programme of Euratom. Up until now, research bodies established in Switzerland have only been able to participate in these research programmes on a project by project basis and without the possibility of launching a research project of their own. Under this agreement they will be allowed to take part on an equal footing with their EU partners. In addition, research bodies in the EU will in future be able to participate in research programmes and projects in Switzerland. The financial contribution by Switzerland to the budgets of the research programmes will be based on the ratio of Switzerland's GDP to that of the member states of the European Union.

While this agreement is not expected to have significant implications for Ireland, it is likely on implementation to increase the number of EU research projects, currently standing at around 60 projects, with both Swiss and Irish involvement.

All these agreements will be supervised by joint committees, in which decisions will be taken by unanimity. The joint committees will only have decision making powers if this is expressly stated in a particular agreement. Each party is responsible for the application of the agreement in its own territory.

Section 1(1) is a standard feature defining "the Act of 1972" as meaning the European Communities Act, 1972. It lists the formal titles of the seven agreements. Section 1(2) is also a standard provision which will enable the 1972 Act to be read as including any amendments that have been made to that Act between 1972 and 2001.

Section 2 of this Bill amends section 2 of the European Communities Act, 1972, by inserting a new subsection, after subsection (2) of that particular Act. The new section provides that from the coming into force of the seven agreements between the EU and Switzerland, their provisions and the Acts to be adopted by any institutions established by those agreements will be binding on the State and that they will have the force of law in the State.

This section of the Bill, when enacted, will enable the European Communities Act, 1972, to be used for the future development of the seven agreements and, depending on the precise terms of any development under the Agreement on the Free Movement of Persons, to be used also for the future development of that agreement.

Section 3 will have the effect of converting all existing instruments, for instance EU directives and regulations listed in the seven agreements, and which at present only apply to the member states of the EU, to apply to Switzerland. Section 4 is a standard feature which gives the short title to the Bill, the collective citation, and provides for a commencement order to be made by the Minister for Foreign Affairs.

The entry into force and successful application of these agreements will constitute an important step in the development of formal relations between the EU and Switzerland and will form the basis for the future development of relations to the mutual benefit of both sides. I commend the Bill to the House.

Mr. Connor:

I too commend the Bill to the House and give it a warm welcome. I support it fully and the only criticism I offer is the tardiness of the Government and the Minister's Department in having this legislation prepared to go through. It is almost two years since the Swiss approved this agreement by plebiscite. The negotiations for it started as far back as 1992 and then it was put to all 15 members of the European Union for ratification. We find ourselves second last – only Belgium has yet to ratify it and they might beat us yet as the matter is currently before the Belgian parliament. All in all it is to be welcomed.

Switzerland is very much a part of European culture and the European way of life. It sits directly in the centre of western Europe. Ethnically it is made up of French speaking people, German speaking people and Italian speaking people. In every way it represents a great cross-section of European cultures. It has enjoyed 300 years of independence.

Earlier I spoke at length to the Swiss ambassador, Mr. Pfister, who is present in the Visitors' Gallery. He delivered an address to the Institute of European Affairs recently in which he raised many issues regarding Switzerland's relationship with the EU. A total of 61% of Swiss exports go to EU member states while 71% of its imports come from EU member states. The level of trade between Ireland and other EU member states is similar with perhaps Ireland exporting more to the EU.

I have often wondered why Switzerland is not enthusiastic about joining the EU but following the initiatives pioneered by Jacques Delors in the early 1990s a debate opened in the country regarding membership of the Union. The first step in this regard involved Switzerland joining the European Economic Area. A plebiscite was held and the proposal was rejected. Many of us who believe very much in the European ideal were disappointed because it was felt the Swiss Confederation would eventually accede to the EU if it joined the European Economic Area.

I am a great believer in enlargement and it was hoped that Switzerland would join the Union when Austria, Sweden and Finland joined some years ago. However, Switzerland would be a major loser upon taking up EU membership. I refer to a number of points made by Mr. Pfister during his address to the Institute of European Affairs. He said Switzerland would be a net contributor to the EU budget because of its high level of development and prosperity. It would have to contribute 4 billion Swiss francs per annum while it would receive approximately 1 million Swiss francs in return. That is a large sum in terms of the Swiss Confederation's budget. One can understand how difficult it would be to sway public opinion in favour of EU membership.

The standard rate of VAT in Switzerland is 7.5% but on taking up membership of the EU it would be obliged to raise it to 15%. That would create significant difficulties for a government in any country, no matter how prosperous. The agriculture industry is small but powerful in Switzerland and the rural way of life is close to the hearts of its people. Its countryside is beautifully preserved and the Alpine landscape is among the most beautiful in the world.

Swiss farmers are the most subsidised in the world but there has been a move to reduce the level of subsidisation. The ambassador stated Switzerland invented the concept of direct payment rather than direct intervention to underpin farmers' incomes. Direct income support has been part of Swiss agricultural policy for many years. However, Swiss farmers would lose out if they adopted the EU farm support model because the level of supports would be reduced. It would be almost impossible to sell EU membership to the agricultural community.

Euro-scepticism is more prevalent among the German speaking population of Switzerland while there is almost a complete absence of scepticism about EU membership among the French speaking population. There are historical reasons for that. However, according to recent opinion polls, accession to the EU is more popular among younger people than older people in all communities, irrespective of their linguistic or ethnic backgrounds.

While I welcome the liberalisation of agricultural trade, there are not many products that Ireland could trade with Switzerland, which is self-sufficient in terms of food production. The Swiss consume everything they produce whereas we export almost 80% of our beef, sheep and dairy produce. Nevertheless there must be opportunities for both countries under this liberalised trade regime as technical barriers which interfered with agricultural trade have been removed.

I also welcome the agreement on the free movement of persons and the granting to Swiss citizens of all the rights that I, as an EU citizen, would enjoy if I moved to France or any other EU member state. It is a move in the right direction towards greater integration as Swiss people will enjoy the privilege and freedom to live in other EU member states without facing work permit problems and so on. That is bound to lead to much greater movement of people between various European countries.

A former neighbour of mine had moved from Switzerland to County Roscommon and for many years she sought freedom to work here. She had many skills and she applied to become a citizen of the State having lived here for ten years. I made representations to the Minister for Justice, Equality and Law Reform. The Department of Foreign Affairs has always been much more helpful in such cases than the Department of Justice, Equality and Law Reform. However, the person we had to convince at the end of the day was the Minister for Justice, Equality and Law Reform and we did not succeed. The current Minister for Justice, Equality and Law Reform is not very fond of foreigners, no matter where they come from.

Mr. Lanigan:

That is not true.

Mr. Connor:

My good neighbour has now returned to Switzerland because she became frustrated with all the problems in trying to get work permits and so on. This Bill would have given her the freedom to work in this country. That was my direct experience of someone coming from a European country which was not a member state of the European Union having great difficulty trying to make a living in a country she loved and wished to make her home. Nevertheless, she found a hostile attitude and environment in terms of providing a living for herself.

I also welcome the liberalisation of civil aviation. Regrettably, it has come too late for one of the great international air carriers, Swissair, which is now effectively bankrupt. No doubt it suffered because Switzerland could not participate in the liberalisation of air transport in Europe which has been taking place for approximately 15 years. This resulted in new private airlines competing with many of the great national flag carriers such as Sabena which did not adapt in time to the realities of the marketplace and now find themselves bankrupt. Companies who became fettered to companies like Swissair found themselves dragged down with them. Our own national airline suffered as a result of the emergence in this country of Europe's largest and most successful private airline, and good luck to it.

Those who have benefited from the liberalisation of air transport have been the flying public or consumers on whose side most people in this House are. I live close to Knock airport and during the summer one of the Swiss airlines, Crossair, operated three return flights a week bringing tourists from Switzerland to the west of Ireland. Liberalisation will assist this type of trade.

I live in and represented in the other House an area which depends very much on tourism. One of the great problems in this regard has been access, a problem which is further exacerbated by technical barriers. Because of aviation policy and other irritatingly technical reasons, a carrier cannot operate charter flights into small regional airports in another country. This section of the agreement, by and large, deals with that issue, which I welcome.

I welcome the overland transport provisions. Nowadays we transport directly a lot of merchandise to countries such as Italy. Much of this merchandise is transported through Switzerland and the Alpine passes. Much fresh meat was transported to Italy from this country until the BSE scare began over a year ago. This was transported through France but when it reached the Swiss border there were certain technical barriers and a greater level of bureaucracy and paper work purely because one was entering a non-EU country and exiting from it into, say, Italy which is an EU country.

It is interesting that Switzerland is taking the opportunity of this agreement to re-organise its transport, in particular its railway system. It intends to work in close co-operation with its European neighbours such as Italy, France, Germany and Austria to develop a whole new rail infrastructure which will use the Alpine passes. There have been a number of accidents on the road system through the Alps, many of which turned out to be catastrophies. It is very interesting that the Swiss Government wants a reduction of 50% in heavy goods transport through these passes in the next number of years. In fact, it wants to reduce this traffic to 650,000 per annum which will make it expensive and inconvenient for the huge volume of heavy goods vehicles using these routes. Some of the tunnels were constructed in the 1980s, while some are of the 1950s and 1960s vintage and no longer have the capacity to cope with the current levels of traffic.

I am pleased that the new transport policy operated by the Swiss Government and the Swiss cantons will focus on rail, forcing heavy goods vehicles on to the railways. Large trucks travelling through the Channel tunnel do not have to load their containers on to a railway carriage. The whole truck goes on to a carriage and is transported through, which is the way to operate. This minimises accidents, increases speed efficiency and so on, which is a far cry from what is happening in this country. We are proposing to take freight from our railways and put it on to our already choked and totally inadequate roads system. Could we take a more retrograde step?

The Swiss Government, which is in tune with the needs of the modern world, is taking the opportunity offered by this agreement to re-organise its transport system and orientate its heavy goods traffic towards the railways. Because of its location, a large volume of trade passes through Switzerland, which is taking advantage of this agreement. I would like the Government and the Minister, who is a pragmatic man, to take that lesson.

I am pleased to welcome the Bill, which my party supports. It is a pity we did not deal with the issue long ago. I hope that it will have a free passage through the Dáil next week. Perhaps in the meantime Belgium will have completed the process. I hope this agreement will be fully in operation by 30 November or by the end of December at the latest and that it will lead to closer co-operation between Switzerland and the European Union and closer trading co-operation between Switzerland and Ireland. There is the potential for closer and friendlier relations.

I hope this historic step is seized upon by the Swiss people and that it will be a move towards greater integration within the European Union. When the next debate on enlargement begins – the debate Jacques Delors began around 1990 opened the debate in Switzerland – perhaps the Swiss will take the option to join the European Union. After 1 January, every country surrounding Switzerland will be using the euro currency. While it operates a very strong internationally recognised and traded currency, nevertheless it will create major difficulties given that 79% of its exports will be from countries that use a single currency.

There are many persuasive arguments why Switzerland should become a member of the European Union. I am sure the ambassador, who was here today, agrees. I hope ultimately that his Government will also agree and that the people, who enjoy the unique popular sovereignty that operates there, requiring all major questions to be put to the people, agree too.

Mr. Lydon:

Although this is a short Bill, it is important and has profound implications for the way Switzerland and the European Union deal with each other. If we look at the reasons behind the framing of this Bill and why the agreements are necessary, we need to look at how Switzerland orders her affairs and how she behaves. For many decades, Switzerland has enjoyed economic and political stability which is due to the status quo being maintained among the political parties. There is an emphasis on stability and consensus at Government level and in labour relations. There have been practically no strikes in Switzerland since the 1930s. I wish other countries could follow that example. Switzerland, in the way political business is carried out with frequent referenda, is an example of democracy par excellence. In order to understand the importance of these agreements and how they were initiated, we need to examine the way she conducts her affairs with the European Union and the rest of the world. One of the main principles guiding foreign policy in Switzerland is that of neutrality which dates back to the 16th century and has been recognised since the Congress of Vienna in 1815. Although Switzerland is in the ‘cockpit of Europe' and was surrounded by many countries at war during the First and Second World Wars, her neutrality has never been violated nor has she ever entered into any military alliances.

In 1997 Switzerland joined the Partnership for Peace, which belies some of the rubbish that was talked about when we were debating our membership of that organisation. We were told around the time of the referendum on the Treaty of Nice that it would infringe our neutrality and that we would be marching with NATO. It shows that a country which is really neutral can be comfortable joining an organisation like that. We have fortunately come to that view now but some of the scaremongering, particularly during referendum campaigns, should be seen in the light of a progressive country and the way it conducts its affairs.

Switzerland operates a principle of solidarity. She believes that she is morally obliged to help countries with humanitarian aid and contribute to world peace and stability. Although Switzerland is not a member of the UN, interestingly a large number of UN organisations is stationed there. There will be a debate in 2002 as to whether the Switzerland will join the UN.

The principle of universality is also central. Switzerland maintains diplomatic relations and dialogue with every country regardless of the government of that country. The Swiss are therefore more interested in talking than fighting, which demonstrates the old adage of ‘jaw-jaw instead of war-war'. She also operates the principle of availability, making her good offices available to help solve the problems of other countries.

Switzerland was a founder member of the European Free Trade Association and since 1972, when she signed the agreement with the EEC, the government has maintained European membership as a long-term objective. She has not become a member yet, not just because the vote was against membership, but also because the Swiss have a different way of doing business. They base co-operation on the basis of treaties with member states of the EU. They have a number of bilateral agreements with other countries but within the EU they have almost 100 different bilateral trade agreements that deal with the movement of goods and with goods generally.

Given the three traditional obstacles to full EU membership, Switzerland's neutrality, federalism and direct democracy system, membership of the European economic area was identified in the late 1980s as a golden mean solution which requires neither involvement in a common foreign and security policy with regard to third countries, nor a common monetary policy with EU partners. Moreover it would not be necessary to adapt Swiss legislation. However in December 1992 the EEA option was rejected in a referendum by 50.3% of the electorate. It was a close margin, something we have been subjected to in some referenda here. Since that referendum defeat the Swiss Government has focused its attention on bilateral, sector-by-sector negotiations which is why these negotiations are so important, not just for the EU but for Switzerland particularly.

It is also important for us because we trade extensively with Switzerland, making it Ireland's 12th largest trading partner and 10th largest export market. She is Ireland's fourth largest non-European Union trading partner after the US, Japan and Singapore. The balance of trade is heavily in favour of Ireland, with the value of Irish exports to Switzerland five times higher than imports from there. In the past year, Ireland has overtaken countries such as China, Sweden and Spain to become one of the ten largest exporters to Switzerland.

Two-way trade between Ireland and Switzerland has increased steadily in the past decade and reached a new peak of £1.9 billion in 2000. Irish exports were valued at £1.6 billion in 2000, a year-on-year increase of 29%. Swiss exports to Ireland were valued at £3.2 million, a year-on-year increase of 44%. It is worth noting that Swiss multinationals are among the largest exporters of chemicals and pharmaceuticals to Switzerland. Nevertheless, the balance is in our favour and we welcome bilateral relations with Switzerland, particularly in relation to trade.

These trade negotiations are important because the Swiss economy is highly international, integrated and capitalises on an open-trade regime for industrial products. Tariffs on manufacturers are generally low and in principle there are no quantative restrictions, anti-dumping, countervailing or safeguard actions. However, in a number of sectors, market entry has long suffered from private or informal barriers which can be attributed to a legacy of weak anti-cartel legislation, specific and protective technical regulations, certain investment restrictions and exclusive rights under intellectual property legislation.

The agricultural sector in Switzerland is strongly protected and enjoys the world's highest subsidies. This, together with the weak competition for a range of goods and services, means high consumer prices, well above the levels of neighbouring countries.

We know well that the banking community has special arrangements in Switzerland. There are special laws on bank secrecy and non co-operation in the prosecution of fiscal crimes. About one third of the world's offshore private banking market is controlled in Switzerland. Nevertheless, Swwitzerland is a country with which we do an enormous amount of trade and we are eager to see this legislation go through. It is important that it does so quickly because there are about seven agreements, most of which can be agreed by the European Parliament on behalf of the European Union, but the agreement on the free movement of persons has to be ratified individually by all the member states in the EU.

It has been asked if there will be an influx of Swiss people into Ireland as a result of this legislation but I do not believe there will. It will make it easier for Swiss people and Irish people to tranfer from one country to another or to take up residence or employment in either country, but I do not expect the numbers to be significant. There will be no significant cost to social security benefits because the majority of these are covered by the regulations in the freedom of movement agreement and already covered by the bilateral social security agreement between Ireland and Switzerland which came into effect in 1999.

There is a way in which we can expect to improve significantly the access for agricultural products to both parties' markets by abolishing tariff and non-tariff barriers to trade. A large number of tariff concessions have been granted for cheeses, milk products, beef products, fresh and prepared fruit and vegetables and wine products. The section on wines and spirits will provide protection for Irish denominations including Irish cream and whiskey, while the section on veterinary rules will require Switzerland to apply the same rules as apply in the community to imports from third countries, which is important from a food safety point of view.

There has been reference both in the House and outside to the implications of agreements on air transport for Ireland, particularly Aer Lingus. Most national flag carriers in Europe are facing difficulties. However, the agreement will merely ensure fair rules of competition are applied to all. The aim is to apply liberalisation in a reciprocal manner to both European Union and Swiss carriers on the basis of the Community accueil. Following the introduction of this agreement any support for Swiss airlines by the Swiss authorities will need to be examined and approved by the European Commission's competition authorities in the same way as for European member states. This will be new for Switzerland and the purpose is to level the playing pitch for all.

Aer Lingus no longer flies directly to Zurich, but operates a co-share arrangement with the Swiss airline Crossair. This service is important, given the growing number of Swiss visitors to Ireland and the potential for developing the Swiss market for Irish tourism. The agreement will provide greater access for Irish carriers to operate services between Ireland and Switzerland should they wish to do so.

I do not want to go through all the details of the agreement. However, the agreement on land transport will allow immediate access for 40 tonne vehicles to the main Swiss economic centres. If I were a Swiss person, this is the only part of any of these agreements that I would be worried about. I would say to the Swiss that they are crazy to let these huge trucks roll through their beautiful countryside. Apart from that, we should move to ratify these agreements and pass this Bill very quickly because the Swiss government is really to have this settled by 1 January 2002. I believe we are one of the last countries to ratify this and we should do so immediately. We have good relations with Switzerland, which we wish to maintain. We hope to continue to trade with her and these agreements can only enhance that.

Dr. Henry:

I welcome the Minister to the House and I welcome the Bill. I will spare him going through all of it as Senators Connor and Lydon have done that very ably. However, there is one section of the Bill that I find particularly interesting as a doctor and as someone involved in medical research. That is the agreement on scientific and technological co-operation.

I do not completely agree with the Minister when he said: "While this agreement is not expected to have significant implications for Ireland, it is likely on implementation to increase the number of EU research projects, currently standing at around 60 projects, with both Swiss and Irish involvement." I hope this agreement might have a very strong implication for Ireland. I ask the Minister to address the implications of the patenting of human genes. I have already failed to get the Tánaiste, whose Department covers patenting, to deal with this. The Minister for Health and Children did not seem to understand what I felt was the importance of this for us.

Ireland and Switzerland both have large pharmaceutical and biotechnology industries. I hope the biotechnology industry, which we are developing here, will not be like our computer companies, which ended up being sub-contractors for various American firms who, when there was any contraction in the market, frequently went back to base with consequent loss of jobs here. Our biotechnology industry is extraordinarily important, as is that of Switzerland.

However the Swiss authorities have taken a more serious look at the question of the patenting of human genes. This happened because of the influence of the American biotechnology and pharmaceutical industries. They succeeded in persuading the US Supreme Court that anything under the sun could be patented. As the Minister is aware, for something to be patented, it has to be an invention; it has to be original and not obvious; and it has to have industrial application. Very many scientists, including those working in America, feel that human genes are not inventions. They are part of our shared history and are discoveries. One just sees the coding of a section of DNA sequences. Firms within the United States of America have succeeded in patenting huge numbers of these sequences without there being any application for these genes at the time. The European Union looked at this for about ten years and agreed to the patenting of human genes in 1998.

Although I feel there are very serious ethical and moral issues involved, there are also the technical and industrial aspects of this. Any research in these countries is stymied by the fact that tests cannot be promoted because the patents are held by American companies. For example, in Ireland we do significant work on breast cancer genes and we have to send tests from Irish women to Myriad Genetics in Salt Lake City, where it costs $1,800 to have the tests carried out. However, both the French and Swiss feel they have tests in this area which are far more reliable, better suited to the genetics of the European population and which can be procured for about a third of the price. This is important to us because our health service has to pay for these genes. However, it is also important because it stymies research here into the development of any tests in this area. It also impedes progress in the treatment of patients here because the patient's clinical considerations are not taken into account side by side with the tests which have to be sent to Salt Lake City.

Some countries decided not to take this lying down and the Swiss were to the forefront. The Swiss and French have brought cases to the Euro pean courts over this. First, their genetic associations objected and this was followed by support from their governments. Some of the major scientific institutions in France such as the Institute Curie led the opposition to this development. The human genome is our shared history. It is not something that any pharmaceutical or biotechnology company should be allowed to put forward as an invention.

I strongly applaud the Swiss for what they have done in this area. They have been supported by Belgium, Holland, Denmark, Germany and the UK, but my requests to our Government to join in the repudiation of this approach to human genetics has not met with any success in either the Department of Enterprise, Trade and Employment or the Department of Health and Children. Now the European Parliament has joined the objections. I urge the Minister to persuade the Government to join the Swiss and French to stop this outrageous practice.

When there was an anthrax problem in the US recently, the Americans very rapidly broke Bayer's patent on the antibiotic Cipro. It was then manufactured by pharmaceutical companies throughout America with great alacrity. We, in Europe, should not allow this to go on. In these scientific areas in particular, I am very pleased that we will have the Swiss as partners in many of the projects. They have a very good record in this area and I look forward to their future involvement.

Unionists like me have attended the national forum on Europe. When the Minister is concluding, he may be able to allay some of my confusion about some of what we heard there on Monday. For example we had the Danish MEP, Jens-Peter Bonde, and the debate that day was on enlargement of the European Union. He said that the Treaty of Nice protocol on enlargement does not in any way mean that the European Union cannot enlarge. That included using the "big bang" theory now being put forward by the European Commission that ten countries could be admitted by the end of next year. I do not know whether it is proposed that they will be brought in on some basis, like making agreements with them as was done with Switzerland. It seems very confusing. He said that the Nice treaty was irrelevant regarding enlargement and I began to wonder why on earth we had that debate. The Minister will be relieved to hear that I was one of the 35 "Yes" voters. Only another 34 people have to admit that they voted "Yes", and if the Minister admits he was another one, the total will be 36.

This is something that needs rapid clarification. Applicant countries must be extraordinarily confused by the major statement in the European Commission report on enlargement last week. I read the report and did not find Ireland mentioned once – maybe I skipped over it but it seemed more concerned with the Turkish part of Cyprus than Ireland. There was talk about the Commission producing a new road map for enlargement and that eight or ten countries would be ready to join by the end of next year. I had thought that only five could be admitted under the Amsterdam treaty. The Commission points out that the Gothenburg European Council invited the candidate countries to translate the Union's economic, social and environmental objectives into their national policies. Why would they ask that unless candidate countries can come in with the greatest possible speed? This seems to be what they were saying.

The Minister made a statement that the Nice treaty had to be ratified before that could take place. Perhaps when replying he will clarify that. Otherwise, judging from what one reads from the Commission, it appears there will be accession treaties all the way. Is an accession treaty necessary for admission of each country? If so, legislation like will be before us for quite some time.

I congratulate the Minister on the Bill.

Mr. Lanigan:

I will not delay the House too long on this legislation. It is short legislation with important implications and most of what needs to be said about it has already been said. Senator Connor mentioned the delays in our ratifying this agreement and said that the target date is January 2002. If there is a delay in its implementation, the blame can be put on the Swiss. They rejected entry to the EU, and had they joined this process would not be necessary. We are drip-feeding measures into our legislation which are of mutual benefit. In the form of democracy peculiar to Switzerland, entry to the EU can be turned down if, for example, they do not want their trade or agriculture to suffer. They do this on a step-by-step basis and then come to us seeking mutually beneficial agreements. We should not be blamed for delays caused.

Mr. Connor:

The Senator is making a very poor point.

Mr. Lanigan:

I was not speaking to the Swiss ambassador, as the Senator was. I am speaking to the House.

Mr. Connor:

There is a poverty of facts.

Mr. Lanigan:

The points I make are as relevant as those made by the Senator. This will not make much difference to the free movement of persons. Maybe one person was affected and there have been reciprocal problems for Irish people trying to work in Switzerland. There will not be a huge difference in the numbers of people who will move from here to Switzerland or vice versa. If there is to be movement it should be free and reciprocal arrangements in employment should be sorted out.

We constantly hear about Swiss neutrality. Neutrality has been beneficial to Switzerland, but I am not sure if it has benefited other countries. I have most difficulties with the secrecy in the Swiss banking system. Were it not for this mooted secrecy, maybe a more open society would have existed sooner rather than later in Europe after the Second World War. Switzerland was used by the Nazis to launder money. They were neutral during the war but the amount of money they syphoned off through Nazi gold is not something of which to be proud.

We must look again at this issue. In Ireland we try to find where the proceeds arising from tax evasion have gone but find it virtually impossible due to secrecy in offshore banking systems. That also applies in Switzerland. We must realise that money is at the root of most terrorist acts. If money is deposited in secret accounts in Switzerland and used by terrorist organisations, that must be addressed by the international community. One of the reasons it cannot address this matter is that Switzerland is not a member of the United Nations and is therefore not under its rule – the rule by which 99% of countries want to abide. We are told that it might join the UN in 2003, but I suggest that some canton will have a reason to oppose joining when it comes to a referendum.

Mutual recognition in terms of conformity assessment is important but it will not have to be of major consequence in Government procurement. I am not sure if we have applied to enter major contracts in Switzerland. I know that the outlook for trade between Ireland and Switzerland is good and that trade has been good in the past. I believe that we exported about $969 million worth of goods to Switzerland and imported $170 million worth. The trade is to our benefit and bilateral agreements should further increase that trade.

As regards airlines, the pitch will be levelled as the Swiss adopt a similar policy to airlines to that adopted by the EU. The fact that Switzerland exports a large amount of materials to Europe and imports the majority of its goods from Europe is not surprising given its central location and the difficulties it has in exporting – goods must be exported by road, rail or air. Switzerland is inaccessible in ways, despite being strategically well placed, and it has to export and import a huge proportion of goods.

The legislation is necessary. There may have been recent changes in the laws of secrecy in Swiss banks, though I have not come across any. If there have not been, then it is time that we as members of the EU and the UN put on as much pressure as possible to make certain nothing untoward is happening in the banking system in Switzerland. It took from the end of the last war to the mid-1990s to get any sort of reaction from the Swiss banking system and Government regarding the repayment of money stolen from German Jews during and immediately after the war.

Minister for Foreign Affairs (Mr. Cowen):

I thank Senators for their contributions. It is important to have this debate in the context of the developing relationship that exists between Switzerland and the EU. The fact is that Switzerland is a respected member of the international community and one that has for many years developed bilateral and other relations with institutions like the EU in a way which is to our mutual benefit. I welcome the fact that today we seek to proceed with the passing of this Bill as part of the necessary placing on a legal basis the seven sectoral agreements which were agreed between the EU and Switzerland to facilitate the greater development of that relationship, including in economic and social terms. I thank Senators for their contributions.

I have met the Swiss Foreign Minister, Mr. Deiss, on a number of occasions. He was here as recently as 11 October when we discussed a range of issues of mutual interest. I raised with Mr. Deiss banking secrecy and the measures being taken by the Swiss authorities to ensure that Switzerland and its banks will not be used for any untoward reason and he assured me that Swiss controls in this area were and are on a par with those in place in the United States and elsewhere. I acknowledge that completely. Obviously they are people who are respected in the financial services area and who have had a pre-eminent role in the development of international financial services. Of course they will seek to maintain and develop that in the future and will do so on the basis of being a compliant country in respect of international obligations which apply to us all in the face of the most recent threat to international peace and security on 11 September.

Senator Henry raised the scientific and technological agreement which will enable Swiss scientists to participate in the fifth EU research programme. It does not in any way address the issue of human genetics or any other specific research programmes. It will be a matter for individual scientists and research institutes to agree among themselves on the projects they wish to work. I thank Senators for raising issues regarding trade and the opportunities that will now present themselves as a result of the passing of this legislation in the next few days.

Senator Henry mentioned an issue in relation to enlargement as if there were some confusion about it. It is true that during the Nice referendum campaign a suggestion was made, to which some credence was given, that there was a prospect of enlargement taking place in the next phase which would not require ratification in the treaty. Commissioner Verheugen's report to the General Affairs Council last Monday was adopted by that council and will now go forward to the Laeken European Council, where heads of Government will consider the report. In respect of the EU report on the progress being made by applicant countries and enlargement, the stated position of Commissioner Verheugen is that anything up to ten countries may well have completed their negotiations by the end of 2002. That being the case, there is no political reality to what Mr. Bonde from Denmark said last Monday or during the Nice treaty campaign when he made similar points.

The idea that one is going to see an accession possibly of ten member states in addition to the existing 15, without ratification of the Nice treaty, has no reality. It has no political reality at all. We know from the Berlin Summit that the financial basis to facilitate enlargement up to 2006 was agreed and the financial prospectus was agreed. Nice was about making the institutional arrangements to enable enlargement to take place; that is precisely what the Nice treaty was about. How does one ensure that the institutions can work and what rules will apply in the context of a European Union of 15 nations being enlarged to 25, taking on board the prediction of the Commissioner dealing with this and negotiating with these applicant states on behalf of the EU? He is stating categorically that up to ten will have completed their negotiations successfully with the EU by the end of next year.

It is time we stopped giving credence to views which are not shared by any government. No head of the European Council is going to allow enlargement of the EU to take place and the instruments of accession to be lodged with the European institutions without ratification of the Treaty of Nice. If anyone thinks otherwise they are not living in the real political world in which we have to operate. It is time for that sort of nonsense to be removed from the very important work the national forum is doing, which is addressing for ourselves where we fit and making an assessment of the benefits of European Union membership, looking at that in the round for the credit balance and any perceived debit balance people wish to raise. Clearly, on any objective assessment, taking the whole situation into account, anyone who would suggest that it is not in Ireland's interest or our political destiny to be full participant members of the EU going forward has a very naive and dangerous understanding of how the economy works and what impact we can have in a globalising world, where we can share, initiate, adapt and contribute to the formulation of common policies under the aegis of the EU which will provide not just prosperity for our people but maintain peace and security on our continent and further afield. That is the reality with which we must come to terms. It is not something we must accept as if it were an unwelcome development. It is in fact the means by which the modern Ireland in which we live has been built. The place and status this country is now accorded in the international community is precisely because of the responsible and participating role successive Irish Governments have taken in the EU and in other international fora.

Let us be clear. We need to recognise that even those who were opposed to the Nice treaty in the last referendum campaign claim they are in favour of enlargement. I take their word that they are in favour of it. People may agree it is right that emerging democracies in former Communist countries in central and eastern Europe can reintegrate with the European family, of which they were always part. People may also agree it is right that this should happen because we support democratic values, which are shared by those in government in those countries now, and for hard headed commercial and economic reasons and our own self-interest given that every enlargement thus far has created greater economic prosperity and economic opportunity for an economy that lives by its trade. The people who were against the Nice treaty in the last referendum said they were in favour of enlargement and, since our referendum campaign, it has become clear that up to ten countries will be ready for accession by the end of next year.

On that basis, how can anybody suggest it is in Ireland's interest to put a brake on enlargement, which would happen if we do not facilitate enlargement by ensuring that Ireland is one of 15 countries that ratify the Treaty of Nice? The European Council in Gothenburg made the position clear. While there is much sympathy for the Irish Government, the Parliament and the people in terms of respecting the sovereign decision of the people on that day—

Mr. Connor:

Thirty per cent.

Mr. Cowen:

We respect the decision and the European Council showed its solidarity with the Government in accepting, as we did, that it was the decision on the day. However, the Gothenburg European Council conclusions confirmed that the Treaty of Nice is not up for renegotiation. The other 14 member states negotiated the treaty in Nice in long, thorough, intense and forthright discussions. A political consensus emerged from these negotiations on how the European Union would enlarge and what institutional arrangements would be put in place to facilitate that enlargement. That being the case, the suggestion that enlargement will take place without the Treaty of Nice being ratified defies logic. I also question the political capacity or the ability to recognise political realities of anybody who makes that suggestion.

We must use the forum as a means of trying to deal with the concerns that were raised during the campaign and to find out in what way we can seek to resolve some of those issues which do not cause problems for member states who are ratifying the Treaty of Nice. We must then go back to the people with a considered proposal that is the best possible option in the interests of ensuring that we do not cut off our nose to spite our face and end up committing what I would regard as the serious and fundamental political error of suggesting that Ireland, by the end of 2002, would not have ratified the Treaty of Nice in a way that would allow enlargement to take place, thereby defying the political will of not only the European Union, but the 120 million people in the applicant countries who are committed to democratic values which we claim to share. We must be logi cal and credible. I hope this national debate will be conducted in a way that informs people and does not foment confusion or cause the air of unreality that, unfortunately, dominated the referendum campaign on the last occasion. However, that is a matter for another day.

Regarding the Bill, I appreciate the contributions of Members. I recognise that the legislation has the unanimous support of the parties and Independents in the House. We wish Switzerland and its people well on the road they wish to choose. It is the sovereign right of every country to decide how it wishes to proceed in developing a relationship with the European Union. This is the point of development we have reached. Ireland is not at the centre of Europe – it is peripheral in geographical terms – but its membership of the EU since 1 January 1973 has brought about many benefits in many ways not only in economic and political areas but in social and cultural areas. To my mind, it has been the platform for the modernisation of Ireland over two political generations.

From our point of view, we will seek, through our actions and the development of our relationship with Switzerland, to encourage the deepening of its relationship with the EU. Eventually, this may lead, subject to the agreement of the Swiss people, to full membership of the European Union. However, that is a decision for them in their own time and we totally respect their position. In the meantime, we recognise that our bilateral relations with Switzerland are excellent and we wish to develop them. We will continue to work with the Swiss Government for the mutual benefit of both nations and to ensure the relationship between the two countries continues apace.

Question put and agreed to.

An Cathaoirleach:

When is it proposed to take Committee Stage?

Mr. Lanigan:

Now.

Agreed to take remaining Stages today.

Bill reported without amendment, received for final consideration and passed.

Sitting suspended at 5.10 p.m. and resumed at 6 p.m.