By Michael Shields
ZURICH (Reuters) - Switzerland will not meet the European Commission's deadline for a deal in the early part of this year on a new treaty that would bind the neutral country more closely to its biggest trading partner, new Swiss Foreign Minister Ignazio Cassis said.
The Bern government still needs to clarify exactly what it wants from an accord that would replace the current patchwork of bilateral sectoral agreements, Cassis told reporters after a meeting of a cabinet sharply divided over European policy.
Cassis, of the pro-business Free Democrats, won fans among the right-wing Swiss People's Party by promising last year to hit the "reset" button in ties with the EU, but has since said he would like to see a deal on a new treaty within months.
Asked on Wednesday about European Commission President Jean-Claude Juncker's demand to see progress on a treaty by spring, Cassis said: "That was never a decision of Switzerland. This was a communication of the European Union ... We will not have a market access treaty wrapped up by April."
Brussels has heaped pressure on Bern to sign a treaty under which non-EU member Switzerland would adopt EU laws governing the single market as the price of enhanced access. It would have the European Court of Justice help settle any disputes.
This is anathema to the anti-immigration People's Party, which is the largest in parliament and has two of seven cabinet seats. Many Swiss conservatives are also wary of giving "foreign judges" such power and are keen to see what kind of EU deal Britain can swing after its vote in 2016 to leave the EU.
Brussels played hardball last year by putting Switzerland on a watch list of tax havens and granting for only one year Swiss stock exchange access to the single market, with any extension linked to agreeing a treaty.
It falls now to Cassis to help forge a compromise.
"The quality is more important than the timing. The cabinet will never agree something that damages Switzerland, even in the next 40 years," he said.
Cassis named a new team to handle the Europe portfolio, appointing veteran diplomat Roberto Balzaretti as state secretary in charge of European affairs and the point man for coordinating EU negotiations.
Cassis said Bern was reviewing new approaches to settling disputes that arise under a treaty. He was not more specific, but sources close to the talks have said the EU proposed letting a special arbitration court handle some disputes.
The treaty issue is politically fraught ahead of elections in both Switzerland and the EU in 2019, which in effect means any deal has to be done this year.
"We have around 10 months ahead of us to review the blockade," Cassis said, referring to the logjam in talks with the EU. "If it works, it works. If not, then it doesn't. Then we have to go back over the books and see how it will go. It is clear not much will happen in 2019."
(Editing by Mark Heinrich)