#Trade – Hogan faces strong headwinds in new role

| September 10, 2019

Irish Commissioner Phil Hogan (pictured, right), a stalwart supporter of Irish Prime Minister (Taoiseach) Leo Varadkar, is promoted to the role of European trade commissioner in the new mandate. One of the most high-profile positions in the EU, Hogan steps up to the plate at a time when the United States is pursuing an unpredictable, protectionist agenda, when controversy surrounds the EU-Mercosur deal, and when the EU will enter into one of its most profoundly complex and comprehensive trade negotiations ever with erstwhile EU member the United Kingdom, writes Catherine Feore 

In many ways Hogan is not a controversial choice. He has already served as the European agriculture commissioner and worked closely with Cecilia Malmström on the different trade deals agreed during the current mandate. Juncker’s commission was particularly active in sealing deals with Canada, Japan, South Korea, Singapore, Mexico and – the as yet to be ratified – Mercosur trade agreement. Agriculture is often the most difficult question in these agreements, in terms of the EU’s requirements and geographical indications, so Hogan is no stranger to the role.  

What makes Hogan controversial is his nationality. The UK is expected to leave the EU on 31 October, maybe later; in any event, the UK will be expected to leave in the next mandate. Assuming there is an agreement, there will then be a short transition period when the UK and EU hope to agree on a new – state-of-the-art – free trade agreement.  

When the Taoiseach met with British Prime Minister Boris Johnson yesterday (9 September) he described the efforts needed to read an agreement in such a short period as ‘Herculean’; he added that Ireland would be an ally to the UK, its ‘Athena’, who according to legend, assisted Hercules in his tasks, intervening when he had started to go mad. That an Irish man will be the midwife to any deal is a stark illustration of the difference between being an EU member and being a third country. Hogan will represent 440 million consumers, in the UK’s largest market; Liz Truss will be sitting opposite him representing 60 million people and businesses desperate for free and unfettered access to the EU market. It’s as if the World Boxing Association decided to allow a fight between a welterweight and a heavyweight; Hogan may not even have to land a punch before the UK throws in the towel. 

As Varadkar pointed out yesterday, in the event of ‘no deal’ the most immediate barriers to any agreement will be those areas currently addressed in the draft Withdrawal Agreement: citizens’ rights, the financial settlement and – crucially – arrangements for the Irish border.  

The Gordian knot that is the Irish border will need to be resolved; to reach a free trade agreement with the EU, it is also worth noting that the United States Congress has made it clear that they will not support a UK-US agreement that runs contrary to the provisions of the Good Friday Agreement that has brought 20 years of relative peace to Northern Ireland. 

However, this will not be the only controversy facing Hogan. The ratification of the EU-Mercosur agreement which he negotiated in part – the most difficult part – has been thrown into question with many countries, including Ireland. The EU’s farmers are concerned about access to cheaper beef on the European market and forest fires in Brazil, which illustrate how weak the agreements can be in encouraging environmentally responsible trade. 

In her political guidelines, the President-elect Ursula von der Leyen has proposed the introduction of a ‘Carbon Border Tax’ that aims to be compliant with World Trade Organization rules and provide a level-playing field to EU companies that may have higher environmental standards. The EU could be accused of green protectionism, so it will need to tread carefully, as it moves towards a greener trade agenda. The EU will also upgrade its trade Enforcement Regulation. Given the situation in the Amazon, MEPs will be asking the European Commission to demonstrate how they can guarantee that trade partners stick to their commitments under the Paris Agreement. 

The new Commission will be adopting a more assertive approach to government procurement, in particular, the EU wants to secure greater access to the public markets in third countries and address the EU’s lack of leverage, in part due to its already open approach. Some ideas include limiting access of third countries to bid for projects where there is EU grant funding of EU financing, including tenders in third countries funded with EU financial resources.  

Hogan faces some strong headwinds from the US and growing tensions with China, a multi-lateral system under attack and probably the most challenging trade agreement ever with British friends. A tough few years lie ahead.  

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Category: A Frontpage, Brexit, EU, European Commission, UK

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