Participation in the EEA would have put Switzerland on the road to full economic integration and thus given it access to the European internal market on an equal footing with EU member states. When the electorate rejected EEA membership, the Federal Council decided to launch negotiations with the EU on a sector-by-sector basis to ensure that Swiss companies would not be at a disadvantage in key economic sectors.
At the end of 1993, the EU declared itself ready for negotiations in seven sectors on condition that the negotiations be conducted in parallel and that they be signed and take effect together (parallelism). The EU set this condition because it considered that the different dossiers would only be in the interest of both partners if they were adopted as a single package. The agreements were therefore linked in legal terms by a ‘guillotine clause’, stipulating that they could only take effect together. If one of the agreements were not to be renewed or if it were terminated, the others would also cease to have effect.
On 21 June 1999, Bern and Brussels signed the seven bilateral (sectoral) agreements. This package of agreements known as Bilateral Agreements I was approved by 67.2% of the Swiss electorate on 21 May 2000 and came into force on 1 June 2002. Together with the Free Trade Agreement, they make it possible for the Swiss private sector to have extensive access to the single European market of more than 507 million potential consumers.