ZURICH (Reuters) – A framework to simplify and strengthen ties between Switzerland and European Union was close to collapsing on Wednesday as the Bern government met to consider whether to break off talks over ratification of a draft treaty struck in 2018.

The two sides failed at a summit last month to resolve differences over a pact widely criticised within Switzerland and which focuses on five areas: free movement of people, civil aviation, land transport, mutual recognition of industrial standards and processed farm goods.

Switzerland insisted on more concessions on state aid, labour rules and citizens’ rights, and one political source said he expected the cabinet to decide after years of foot-dragging to cancel further negotiations.

Swiss media also reported the deal was on the verge of collapse.

But walking away from its biggest trading partner could over time disrupt and ultimately jeopardise de facto Swiss membership of the EU common market.

EU-Swiss economic ties are now governed by more than 100 bilateral agreements stretching back to 1972 and fleshed out after Swiss voters in 1992 rejected membership of the European Economic Area. They will remain in effect.

Failure to strike a treaty deal would however block Switzerland from any new access to the single market, such as an electricity union. Existing accords will also erode over time, including an agreement on cross-border trade in medical technology products that lapses this week.

Critics across the Swiss political spectrum say the pact infringed Swiss sovereignty to an unacceptable extent.

For its part, the 27-member EU wants an overarching treaty to bind non-EU member Switzerland more closely to single market rules, including free movement of people, and provide a more effective way to resolve disputes.

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