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#Trade – Hogan faces strong headwinds in new role

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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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EU's Barnier still hopes trade deal with Britain possible, sources say

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The European Union’s Brexit negotiator told the bloc’s 27 national envoys to Brussels that he still hoped a trade deal with Britain was possible, stressing that the coming days would be decisive, diplomatic sources with the bloc told Reuters, write and

Michel Barnier addressed the gathering on Wednesday (16 September) and the three sources either participated in the discussion behind closed doors or were briefed on its content.

“Barnier still believes a deal is possible though the next days are key,” said one of the EU diplomatic sources.

A second diplomat, asked what Barnier said on Wednesday and whether there was still a chance for a new agreement with the UK, said: “The hope is still there.”

The first source said tentative concessions offered by the UK on fisheries - a key point of discord that has so far prevented agreement on a new EU-UK trade deal to kick in from 2021 - were “a glimmer of hope”.

Reuters reported exclusively on Tuesday (15 September) that Britain has moved to break the deadlock despite that fact that publicly London has been threatening to breach the terms of its earlier divorce deal with the bloc.

A third source, a senior EU diplomat, confirmed the UK offer but stressed it was not going far enough for the bloc to accept.

Brexit talks descended into fresh turmoil this month over Prime Minister Boris Johnson’s plans to pass new domestic laws that would undercut London’s earlier EU divorce deal, which is also aimed at protecting peace on the island of Ireland.

US Democratic presidential candidate Joe Biden warned Britain that it must honour the Northern Irish peace deal as it extracts itself from the EU or there would be no US trade deal for the United Kingdom.

The third EU source, who spoke under condition of anonymity, said that the bloc would take a more rigid line in demanding a solid dispute settlement mechanism in any new UK trade deal should Johnson press ahead with the Internal Market Bill.

“There is unease about what Britain is doing but Barnier has stressed he will keep negotiating until his last breath,” said a fourth EU diplomat, highlighting the bloc’s wariness about being assigned blame should the troubled process eventually fail.

Asked about an estimate by Societe Generale bank, which put at 80% the probability of the most damaging economic split at the end of the year without a new deal to carry forward trade and business ties between the EU and the UK, the person said:

“I would put it around the same mark.”

Barnier is due to meet his UK counterpart, David Frost, around 1400 GMT in Brussels on Thursday.

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Biden warns UK on #Brexit - No trade deal unless you respect Northern Irish peace deal

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US Democratic presidential candidate Joe Biden warned the United Kingdom that it must honour the Northern Irish peace deal as it extracts itself from the European Union or there would be no US trade deal, write and

“We can’t allow the Good Friday Agreement that brought peace to Northern Ireland to become a casualty of Brexit,” Biden said in a tweet.

“Any trade deal between the US and UK must be contingent upon respect for the Agreement and preventing the return of a hard border. Period.”

Johnson unveiled legislation that would break parts of the Brexit divorce treaty relating to Northern Ireland, blaming the EU for putting a revolver on the table in trade talks and trying to divide up the United Kingdom.

He says the United Kingdom has to have the ability to break parts of the 2020 Brexit treaty he signed to uphold London’s commitments under the 1998 peace deal which ended three decades of sectarian violence in Northern Ireland between pro-British Protestant unionists and Irish Catholic nationalists.

The EU says any breach of the Brexit treaty could sink trade talks, propel the United Kingdom towards a messy exit when it finally leaves informal membership at the end of the year and thus complicate the border between Northern Ireland and EU-member Ireland.

The EU’s Brexit negotiator told the bloc’s 27 national envoys that he still hoped a trade deal with Britain was possible, stressing that the coming days would be decisive, three diplomatic sources told Reuters.

Michel Barnier addressed the gathering on Wednesday and the three sources either participated in the discussion behind closed doors or were briefed on its content.

“Barnier still believes a deal is possible though the next days are key,” said one of the EU diplomatic sources.

Johnson told The Sun that the EU was being “abusive” to Britain and risking four decades of partnership.

He said the UK must “ring-fence” the Brexit deal “to put in watertight bulkheads that will stop friends and partners making abusive or extreme interpretations of the provisions.”

Societe Generale analysts said on Thursday they now see an 80% chance that Britain and the EU will fail to strike a trade deal before the end of the year.

Biden, who has talked about the importance of his Irish heritage, retweeted a letter from Eliot Engel, chair of the Foreign Affairs Committee of the US House of Representatives, to Johnson calling on the British leader to honour the 1998 Good Friday peace deal.

Engel urged Johnson to “abandon any and all legally questionable and unfair efforts to flout the Northern Ireland protocol of the Withdrawal Agreement.”

He called on Johnson to “ensure that Brexit negotiations do not undermine the decades of progress to bring peace to Northern Ireland and future options for the bilateral relationship between our two countries.”

Engel said Congress would not support a free trade agreement between the United States and the United Kingdom if Britain failed to uphold its commitments with Northern Ireland.

The letter was signed by Representatives Richard Neal, William Keating and Peter King.

Johnson is pushing ahead with his plan.

His government reached a deal on Wednesday (16 September) to avert a rebellion in his own party, giving parliament a say over the use of post-Brexit powers within its proposed Internal Market Bill that breaks international law.

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UK sees 'a way through' parliamentary maze for #Brexit treaty breach bill

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British Prime Minister Boris Johnson’s government sees a ‘way through’ the parliamentary maze for his bill that would break the Brexit divorce treaty as it talks with rebels in the Conservative Party, a minister said on Wednesday (16 September). write Guy Faulconbridge and Kate Holton.

Johnson’s Internal Market Bill, which the EU has demanded he scrap by the end of September, is currently being debated in parliament, though he is facing a rebellion by some members of his Conservative Party.

“I believe there is a way through,” Robert Buckland told the BBC when asked about negotiations with rebels in parliament over the bill, adding that London wanted a deal with the EU.

“In terms of shared understanding, I have already seen quite a difference,” he said when asked about a possible compromise in parliament.

Asked if he had been involved in negotiations with Bob Neill, a Conservative lawmaker, Justice Secretary Robert Buckland said: “There are lots of discussions going on with all MPs from all parts of the debate, not just Bob Neill.”

“We want to get this bill through, we want to make sure that we are ready for any disagreements or disputes that might arise if we don’t get agreement in the joint committee,” he said. “For me, I just want Brexit sorted.”

Buckland told Times Radio that the bill was needed as an insurance policy in case the EU made a “material breach” of their obligations but that the talks were not yet at that stage and that London would use current mechanisms to find a compromise.

The EU says Johnson’s bill could collapse trade talks and propel the United Kingdom towards a messy Brexit while former British leaders have warned that breaking the law is a step too far that undermines the country’s image.

Johnson said it was essential to counter “absurd” threats from Brussels including that London put up trade barriers between Britain and Northern Ireland and impose a food blockade - steps he said threatened the United Kingdom’s unity.

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