Federalism in Times of Increased Integration: The Participation of the Cantons in Swiss Trade Policy

Abstract

Switzerland's federalism is generally known as being a prime example of power sharing between a central government and the cantons. It is still based on the ideas enshrined in the first constitution of the consolidated nation state of 1848. What is less known is how cantonal involvement in trade policy-making has changed over the last 25 years. Due to increased globalisation and economic integration – in particular, at the European level – the mechanisms to involve the cantons in trade policy-making have evolved considerably, leading to the creation of new institutions and procedures. While some of them are formalized, others are more informal and still in the making. Although the central Government still enjoys an exclusive competence in this field (like in all foreign policy) it must now take into account the interests of the cantons and consult them in areas of particular interest to them. The final ratification of trade agreements does normally not involve the cantons directly but only through their representation in parliament. Using the particularly important Agreements between Switzerland and the European Union as an example, this chapter demonstrates the changing role of cantons in trade policy since the early 1990s. Overall, it concludes that increased sub-federal involvement has resulted in better acceptance of the negotiation results by the cantons (and thereby the population in general), but at the price of slower and more complicated communication procedures affecting the flexibility of the central Government.