For three decades Switzerland has been pursuing an approach of sectoral bilateralism, resulting in an intricate pattern of external differentiated integration with the European Union (EU). This article examines the form of this evolving relationship, its drivers and consequences and argues in favour of 'bringing governance (back) in' to the analysis. First, it shows that the current bilateral agreements vary widely not only with regard to substance, but also with regard to governance, yet the conceptual debate has predominantly focused on differentiation by time, space and/or matter. Second, for both the EU and Switzerland the drivers have been material interests stemming from their interdependence as well as (mainly constraining) ideational factors linked to (self-)governance. Third, the 'throughput' dimension in terms of the governance processes and the 'wriggle room' they offer has largely been neglected in the Swiss narrative which mainly emphasises sovereignty and self-governance.