The Senate on Monday refused to follow the House of Representatives which had approved the move by the Swiss People’s Party last September.
Opponents, including Foreign Minister Didier Burkhalter, said a strict reciprocity – notably between aid deliveries and readmission of rejected asylum seekers to their home countries – was counterproductive and ineffective.
However, the government pledged to tie aid to asylum cooperation in principle and boost collaboration between the Swiss development agency and the migration authorities.
The vote in the Senate had to be delayed several times as a first ballot count last week turned out to be incorrect and because of the absence of a senator and a cabinet minister.
The motion was handed in nearly two years ago but won increasing popularity among centre-right parties amid public concern over growing numbers of asylum seekers from northern Africa.
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If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.