This chapter first provides the context in which the Draft Institutional Framework Agreement (DIFA, officially titled the 'Agreement facilitating bilateral relations between the European Union and the Swiss Confederation in parts of the internal market in which Switzerland participates') was negotiated. It then focuses on Switzerland's European policy and the main elements of the existing Bilateral Agreements I and II before dealing with those elements of the DIFA that are currently at the heart of the consultation procedure and the issues they raise in Switzerland as well as in the countries that have to deal with a selective integration with the EU internal market. The chapter will conclude on the challenges that such an agreement raises for the partner countries of the EU.