While most of the legislative machinery in Brussels slowly ground to a halt after the European Parliament elections in May this year, trade has continued at an unabated, albeit rocky pace.
Phil Hogan is a returning member of the College that served as the Agriculture Commissioner under Jean-Claude Juncker. Having previously seen off hardened negotiators from Japan and Mercosur to strike trade agreements of unprecedented magnitude, how will he hold up during his hearing in the European Parliament next week?
The fires that have raged the Amazon rainforest over the past summer weeks have given further ammunition to MEPs to shoot holes in the recently concluded EU-Mercosur trade agreement, which had already been criticized for opening the gates for cheap beef imports.
While the agreement is far from ready for approval by the European Parliament (it currently undergoes a lengthy legal scrutiny and translation process), it has become a figurehead for lawmakers’ insistence that trade policy needs to become more compatible with an ambitious external climate policy, binding third countries to the Paris Agreement.
The incoming Trade Commissioner can undoubtedly expect tough questions on how he will ensure Brazil and the other members of the Mercosur bloc live up to their climate commitments under the EU-Mercosur agreement.
Fraught relations with the U.S., including enduring tariffs on steel and aluminium and the threat thereof on cars, continue to cast a long shadow over the negotiations on a potential limited trade agreement.
With talks on reducing and eliminating tariffs stuck in the sand over differences over the inclusion of agriculture in any possible agreement, it remains unlikely that Commissioner for Trade Cecilia Malmström will deliver on her promise to secure a meaningful outcome before she leaves office at the end of October.
While not in the scope of last year’s joint statement by President Donald Trump and Jean-Claude Juncker, the recent agreement on increasing the import quota for U.S. beef into the EU can be hailed as a limited positive development for transatlantic relations. How will Hogan navigate these muddy waters?
In the coming months, after branding China as a “a systemic rival promoting alternative models of governance” in the EU-China Strategic Outlook, the Commission will also continue discussions with Member States on what should eventually become, perhaps somewhat overdue, a more comprehensive, assertive, but above all a more unified approach towards EU-China relations.
This could include stricter rules on access to public tenders for Chinese companies and tightening rules on Chinese investment. MEPs will be on the lookout whether a more assertive agenda is on the cards, and what that approach would look like. Can the Von der Leyen Commission live up to its promise to be a more “geopolitical” Commission?
The Trade Commissioner will also have a busy time upholding the international trade order and fending off threats from multiple directions. As early as coming December, two out of three WTO Appellate Body judges will finish their tenure, effectively rendering the adjudicator unable to rule in international trade disputes.
Alternative, plurilateral and bilateral options are being explored. Big questions around how to tackle state-owned enterprises, industrial subsidies, forced technology transfers and joint venture requirements remain. Can the EU rally more support for preserving and reforming the multilateral trading order?
Lastly, Brexit. Hogan was renominated partly for his tough negotiating skills. In the past, he’s described Brexit as a “personal affair”. Deal or no deal, at some point the UK will face Big Phil at the negotiating table to discuss the future economic trading relationship with the EU.
With bilateral economic ties so large and important, and with so many moving parts in the negotiations, it will be interesting to see if Hogan and Sabine Weyand, the newly appointed Director-General he will work with, can keep everything under the overarching umbrella of DG TRADE.
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July 13, 2023