Switzerland has long been wary of ceding too much power to the invasive bloc, but new legislation drawn up by the government to replace a patchwork of deals looks set to grant the EU increased control over the neutral Alpine country.
The Swiss parliament plans to wrap up the new legislation next month.
The deal is meant to curb immigration from the EU by giving hiring preference to local people – but could also mean having to put more cash into the monstrous Brussels budget.
It could also give the European Court of Justice stronger powers.
But the deal has been met with tough opposition, with the right-wing Swiss People”s Party (SVP) insisting that Swiss law must take precedence over most international law, railing against the idea of foreign judges telling Swiss what to do.
And the party wants to put the plan to voters under the Swiss system of direct democracy.
Foreign minister Didier Burkhalter has also condemned the plans, that pushing through a new framework accord is politically impossible in Switzerland at the moment – despite EU calls for such a treaty, most recently by Angela Merkel.
The legislation aims to give hiring preference to locals, despite criticism it would infringe on the free movement of people – an essential EU policy.
Brussels has taken a hard line on the Schengen agreement to avoid encouraging Britain to believe it can obtain special terms in its Brexit negotiations.
Switzerland”s federal cabinet said in a statement: “Such an agreement will enable existing market access accords to be maintained and used more efficiently, as well as develop further the bilateral approach and conclude new market cooperation agreements between Switzerland and the EU.”
The cabinet also intends to decide next year on renewing Swiss financial contributions to the EU budget, part of the price it pays for the access of Swiss businesses to the lucrative EU single market of 500 million consumers.
The upper house of parliament is due to address compromise legislation prompted by a 2014 binding referendum demanding upper limits and quotas for immigration to a country whose 8.3 million population is already a quarter foreign.
The local preference package stops well short of establishing quotas, but most politicians – with the exception of the SVP – want to avoid aggressive action to curb the influx of EU citizens that would invite a confrontation with Brussels.