Swiss voters overwhelmingly rejected a proposal on Sunday that would have imposed strict curbs on immigration, in what is seen as a result strengthening Swiss ties with the European Union.

The initiative, which aimed to cut annual immigration by three-quarters from current levels, failed to win a majority of Switzerland's 26 cantons. Seventy-four percent of voters appear set to reject the proposals, according to data from Swiss broadcaster SRF.

Switzerland's system of direct democracy gives citizens the right to force popular votes if they can gather enough signatures of support. The referendum reflected growing concerns among the Swiss population that immigrants are eroding the nation’s Alpine environment and contributing to rising rents, crowded transport and crime.

The referendum proposed capping the number of immigrants at just 0.2 percent of the resident population or the equivalent of 16,000 people per year, down from about 70,000. The vote has been seen as a proxy vote on Switzerland's raft of treaties with the EU, its biggest trading partner.

Had it been accepted, the initiative would have torpedoed the Swiss government's attempts to salvage these treaties, which are conditional on Switzerland's commitment to the free movement of labor. The agreements with EU were already in limbo after the approval of a vote to limit immigration in February.

"With this absolutely clear result, we can once again look forward and in relation to the bilateral deals find a way forward," said Paul Rechsteiner, president of the Swiss association of trade unions. "This is a very different starting position than what we had after Feb. 9."

Almost a quarter of the 8 million people living in Switzerland are foreigners, a statistic that is partly due to Switzerland's healthy economy and high salaries.

While neutral Switzerland is not a member of the EU, its immigration policy is based on free movement of citizens to and from the EU, with some exceptions for people from central and eastern European countries, as well as allowing in a restricted number of non-EU citizens.

Opponents of the cap say it could exacerbate a shortage of skilled workers in Switzerland, the home of Roche, Novartis, UBS and other multinationals filled with foreign professionals.

The vote was watched closely by Euroskeptics within the EU who want to rein in immigration among its member states, notably from Eastern Europe.

Another proposal to scrap one of Switzerland's biggest tax perks for expatriates was also defeated. A third initiative, which would have forced the central bank to buy huge amounts of gold to weaken its currency in response to pressure from its major trading partners, was rejected as well.

Al Jazeera and Reuters