Merkel says Swiss, British need separate deals on EU ties

BERLIN/ZURICH (Reuters) - German Chancellor Angela Merkel said on Wednesday that European Union talks with Switzerland on the free movement of people should not be linked in any way to the negotiations with Britain over its exit from the EU.

Her comments after talks with visiting Swiss President Johann Schneider-Ammann put the neighbors on the same page in seeking a tailor-made solution for Switzerland as it seeks to curb immigration from the EU, a hot button topic in Britain too.

Any concessions the EU grants non-member Switzerland will be closely watched for clues of what Britain might expect as it prepares to renegotiate its ties with the bloc following its June 23 referendum vote to leave.

"If I tried to put myself in the shoes of a Swiss citizen, I wouldn't be pleased if it was suddenly cast in a new light because of another decision in another country," Merkel told a joint news conference in Berlin.

"That's why we should conduct these talks with Switzerland as if the Great Britain issue never existed. I can only say that the German position hasn't changed with Great Britain's decision. These are two completely different issues."

Schneider-Ammann said he hoped a deal on free movement could emerge this year.

The president had staked out a hard line before the meeting, insisting in a radio interview that the free movement dossier could not be linked to a broader treaty that Brussels wants to conclude with Bern. He said Switzerland would not be pressured into sacrificing its sovereignty.

The EU wants to replace around 120 sector-specific bilateral treaties with a new "framework agreement" that would make the Swiss automatically adopt many new EU laws.

Merkel said a comprehensive accord was needed at least in the medium term.

Switzerland must implement next year the result of a 2014 referendum in which voters demanded quotas on EU workers.

Such limits would violate bilateral treaties that give the Swiss enhanced access to the EU single market, their largest trading partner, in return for citizens' freedom of movement.

Last month, the lower house of parliament passed a plan that includes hiring preferences but no quotas for workers already in Switzerland. The upper house is likely to take a similar line.

If so, Schneider-Ammann said the upshot "could be that we are compatible with the EU's freedom of movement rules already".

Some European diplomats say any plan to regulate immigration must win the EU's blessing, especially given its potential effect on Britain's talks on EU ties.

(Reporting by Andreas Rinke and Caroline Copley in Berlin and by Angelika Gruber and John Miller in Zurich; Editing by Gareth Jones)

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