By Chris Horseman and Iana Dreyer.
Europe’s trade Commissioner-designate Phil Hogan is never likely to get lost in a crowd of people. At six feet six inches tall – 1.98 metres -, he towers over most of the hundreds of people with whom he has posed for official photographs over the years. The question of whether he will tower over the global trade policy landscape in quite the same way, however, is about to the put to the test.
As next EU trade commissioner, Hogan, if confirmed by the European Parliament, will have to navigate sensitive trade relationships with the United States, try to salvage what remains of the multilateral trading system, finalise negotiations towards a few other free trade pacts with Australia, New Zealand, Indonesia and Chile and conclude an investment pact with China.
Overall, no fundamental trade policy shift is to be expected under Hogan. “I don’t envisage a major change [in policy direction] for third countries”, reckons Hosuk Lee Makiyama, a director at the think tank ECIPE.
The Irish farmer’s son is no stranger to Brussels, having served as agriculture commissioner in the outgoing Juncker Commission. Over the past year or so he has made no secret of his desire to graduate to the role of trade commissioner in Ursula von der Leyen’s new executive team. His appointment to that role, confirmed on Tuesday (10 September), has appeared increasingly probable ever since the Dublin government re-nominated him for a second term as Commissioner back in July.
In his old job, Hogan has played a full role in negotiating all of the major bilateral trade deals which the EU has negotiated since 2014 – with Japan, with Mexico, and with Mercosur. Only in the last of these three deals – the EU-Mercosur FTA on which negotiations were concluded in June – did European agricultural interests really come under political pressure.
Many observers felt that in pushing through a deal to which European farmers vocally objected, Hogan was in effect ‘auditioning’ to demonstrate his suitability to take on the trade portfolio. The fact that the Irish government– among the most vociferous of the Mercosur deal’s critics – nevertheless entrusted Hogan with five more years representing Ireland on the Commission executive is testimony to the Kilkenny-born politician’s talent in winning people over to his point of view.
Schooled as he is in the tough-talking world of Irish politics and Irish agribusiness, Hogan will not be a pushover in any of the difficult trade discussions that lie ahead of him. Future meetings between Hogan and his US counterpart Robert Lighthizer in particular are unlikely to be dull.
The story of how Hogan browbeat and cajoled the Japanese agriculture minister into agreeing a deal to open up generous quotas for European cheese as part of the 2017 EU-Japan agreement has passed into legend.
He was equally uncompromising in demanding from Juncker a commitment to provide a €1 billion ‘financial support package’ to be handed out to farmers to help them “make any necessary adjustments in the event of market disturbance” after the EU-Mercosur deal comes into effect. This pledge provided Hogan with the political cover he needed to sign up to the tariff-rate-quotas for sensitive products like beef and sugar which unlocked the deal.
Hogan oozes self-confidence. A person who met him privately a few days after the trade deal with Mercosur was announced said: “He was very pleased with himself”.
Will his assertiveness always win him friends? Hogan will have the challenging task of making trade policy palatable to large swathes of the European public, as well as to a restive European Parliament. The Commissioner-designate’s style is likely to represent something of a contrast with his consensus-seeking predecessor.
Cecilia Malmström, which some cynics in Brussels say was appointed in 2014 to be a friendly face to sell the embattled and now-defunct Transatlantic Trade and Investment to the European public, managed to establish a good working relationship with the international trade committee.
Malmström’s soft touch and shift to a ‘values-based’ trade policy in 2015 embodied in her ‘Trade for All’ strategy and her decision to overhaul investor-state dispute settlement, has helped the Commission keep a majority of MEPs on board the EU’s ambitious but contentions trade agenda.
Power shifts in Commission
Hogan will need to find his grounding in the Commission’s new power configuration.
Under the ‘political’ Commission introduced by outgoing president Jean-Claude Juncker five years ago, the still-mighty trade directorate appears to have lost some degree of power compared to earlier periods of its history. Juncker introduced a hierarchical system of governance at the top of the Commission that integrated various strands of policy and sought to break internal ‘silos’ within the bureaucracy.
As a result some strategic trade relationships or decisions were no longer in the exclusive remit of the trade commissioner. For example outgoing Commission Vice President Jyrki Katainen – whose portfolio included investment – was de facto seen as leading the EU’s China economic and investment policy. DG Trade did not get its way in defining some of the EU’s international ‘trade’ policy related to digital issues – namely on cross-border data flows.
When trade relationships with the US deteriorated last year following Washington’s tariffs on EU steel and aluminium, management of the US relationship became Chefsache, driven by the now-disgraced secretary-general of the Commission Martin Selmayr.
Now the Commission will not only be ‘political’. Von der Leyen wants it to be “geopolitical”. Climate and digital policy and external relations are set to become the Commission’s top priorities. Trade policy will, more than ever before, be used for ‘higher’ political ends.
‘Level playing field’
His boss Ursula von der Leyen asked him to “lead the reform of the World Trade Organization”. The Irish commissioner’s role will also be to oversee the functioning of the EU’s new investment screening regulation and to get a long-sought ‘International Procurement Instrument’ off the ground. This is part of von der Leyen’s ambition to ‘level the playing field’ in trade.
Hogan will further be in charge of overseeing a new role in the Commission, the Chief Enforcement Officer, whose task will be to make sure EU trade partners implement their labour and environmental commitments.
Finally the German commissioner is entrusting Hogan with the task of designing plans for an EU carbon tax . “I would like you to contribute to the design and introduction of the Carbon Border Tax, working closely with the Commissioner for the Economy,” von der Leyen enjoins Hogan in her mission letter.
No explicit Brexit mandate
Hogan might become involved in the launch of negotiations of a free trade agreement with the United Kingdom after the country leaves the EU. That irony was not missed on the British Isles. But how soon he would be able to start and how far he would be able to go is not clear yet. Brexit does not feature in von der Leyen’s mission letter to Hogan.
Presumably, should Britain leave the EU with a deal in the coming months, Hogan’s services would help ‘scope out’ the contours of a trade pact and prepare a negotiating mandate for member states to approve. If Britain leaves abruptly in a few weeks’ time without an agreement the EU’s focus would be on managing emergencies at custom borders – not Hogan’s direct remit – and finding basic arrangements with Britain for trade, people and money. Hogan might end up with the task of managing the fallout for some EU sectors – such as autos – of the UK’s departure from important bilateral trade agreements with Japan or South Africa.
Whatever Hogan’s ultimate tasks will be, his appointment signals that the EU seeks a person of stature to lead it in turbulent times the global trade arena.