Abstract
Over the past decades, the European Union has formed several formats of integration with the third countries, which are considered as forms for external differentiation. The EU seeks to streamline relations with partners by linking access to its internal market with obligations to dynamically adapt their national legislation to EU norms and rules. These actions can be viewed through various theoretical frameworks: Europeanization, differentiation, institutionalism, external management and others. The purpose of the article was to study the peculiarities of relations between Switzerland and the EU at the present stage, due to the Alpine republic’s refusal of the draft bilateral Institutional Agreement, which assumed the deepening of the institutional structure and greater automation in the implementation of EU law into the national law of the Swiss Confederation. The country's leadership's refusal to ratify the agreement confirms that the idea of preserving national sovereignty and the principle of direct democracy for Switzerland turned out to be more important than the economic benefits of deepening integration with the EU. Thus, taking into account the experience of the United Kingdom, not each of the EU's close partners is ready to sacrifice their national powers in exchange for benefits from deeper access to the EU market. This happens largely due to the internal traditions and economic potential of the partner states.