Switzerland hopes to conclude negotiations on extending a labour deal to Romania within the next few months, says Swiss President Micheline Calmy-Rey.
Speaking after meeting her Romanian counterpart Traian Basescu on Tuesday, Calmy-Rey said voters could have the final say on the agreement if the accord was contested.
Romania, which joined the European Union at the beginning of the year alongside Bulgaria, is Switzerland's main trading partner in southeastern Europe.
Non-EU member Switzerland has gradually opened its labour market under a bilateral accord with Brussels.
But negotiations are still ongoing on extending the deal to the EU's two newest members.
At a media conference, Calmy-Rey, who is also the foreign minister, said that the Swiss economy relied in part on the free movement of people.
But the Swiss president said that she had warned Basescu that the Swiss population was likely to vote on allowing Romania and Bulgaria into the labour deal, just as it did for the ten other new EU members which joined in 2004.
Added to this is the fact that the Swiss parliament is due to decide on whether to continue with the free movement deal at all in 2008. This could also be voted on by the population.
The Swiss government will also decide shortly on its financial contribution to Romania as part of an agreement to help former eastern bloc country transform to market economies.
Switzerland has praised the Romania's "impressive" reform efforts made before joining the EU.
For this reason it was a priority country for Swiss financial and technical aid until 2007.
Since 1990 the Swiss authorities have invested SFr190 million ($170 million) in the former eastern bloc nation, mainly in the reform of the health sector and in the improvement of infrastructure and the environment.
For his part, Basescu thanked Switzerland for the transition aid and called for increased trade between the countries.
Swiss exports to Romania rose by 38 per cent in 2006 to SFr820 million, while Romanian imports fell to SFr210 million, although the Swiss foreign ministry said the figures were looking better for early 2007.
The talks, which also focused on bilateral and European issues, were described as "constructive" and Basescu also met Swiss Justice Minister Christoph Blocher and Economics Minister Doris Leuthard.
Calmy-Rey said discussions also took place on the situation in the Serbian province of Kosovo.
The two countries have differing views on what should be done, said Calmy-Rey – who has in the past given her support to Kosovo's independence. But she stressed that both presidents hoped for a solution to be found.
Mediators are due to report back to the United Nations on the province next Monday.
swissinfo with agencies
Population: 7.5 million
Size: 41,300 sq km
GNI per capita: $54,930 (SFr61,379)
Population: 21.6 million
Size: 238,391 sq km
GNI per capita: $3,830
Ties have existed between Romania and Switzerland since the 19th century. By 1940 several Swiss emigrants had risen to important positions in Romania.
Relations cooled as a result of the Cold War but started to revive in 1990, particularly as a result of contacts established between Romanian and Swiss villages. Mutual visa requirements were cancelled in 2003.
More than 3,600 Romanians live in Switzerland and a series of bilateral agreements have been signed. Trade and investment by the Swiss in Romania has increased as well as technical and financial aid.