21 Jan 2020
Phil Hogan Sets Out Trade Priorities for the Recently Elected European Commission
Earlier this month, Trade Commissioner Phil Hogan visited Paris to hold discussions with the French authorities on the new European Commission’s trade priorities. The topics addressed by the new EU Trade Commissioner will likely be of interest to Hong Kong traders exporting their goods to Europe. They included the relationship between trade and climate change, protection of the EU’s international trade interests, efforts to protect intellectual property rights, progress in bilateral rules on public procurement with mainland China and ways to address the distortive effects of foreign subsidies to companies competing on the EU internal market.
As reported by MLex, Phil Hogan, EU Trade Commissioner, addressed media outlets in a press conference in Paris during his visit of 7 January, where he described the scope of the EU’s trade priorities for the new Commission. He deemed it relevant to address such trade concerns during his visit to France as he believes that “the priorities put forward by the new Commission coincide with the French ones”.
Hogan referred to the relationship between trade and climate change and how the Commission intends to set climate change as a priority both in EU domestic regulation as well as in bilateral and plurilateral international trade agreements.
According to Hogan the “Green Deal tabled by President Von der Leyen in December was the first big political initiative of the new Commission”. Referring to the EU’s efforts to manage CO2 emissions and to avoid carbon leakage, he emphasised that the EU is determined to set up border carbon adjustments so that the EU’s efforts to fight climate change will not lead to a loss of competitiveness for EU domestic industries. As previously reported, the Commission is still studying the most convenient way to implement such a carbon border measure and at the same time avoid a breach of the WTO legal framework.
The Trade Commissioner further explained that the “Commission will propose to include the Paris agreement in the essential clauses of future bilateral trade agreements, in order to allow for the suspension of the [trade] agreement in cases of breach. So far, only human rights and nuclear non-proliferation were deemed essential”. Hogan further claimed that both the EU and France intend to “use the agreement with Mercosur as a lever to anchor countries like Brazil in the Paris agreement and to get Brazil to fulfil its commitments in the Paris agreement”.
Hogan stressed that there were common interests with the French authorities regarding the need to protect the EU’s rights and obligations in international trade. He mentioned the creation of the new Office of the Chief Enforcement Officer, which will be entrusted with the task of managing the EU’s protective action in the area of international trade and to make full use of the recently reformed toolbox to protect the EU from unfair trading practices. He explained that the objective behind the reform of the EU Trade Enforcement Regulation is to allow the block to “take action vis-à-vis partners that are in breach of their obligations, despite the paralysis of the appellate body of the WTO”. According to Hogan, the EU needs to be equipped with a mechanism that will allow it to “enforce international trade rules in circumstances where the WTO is no longer able to deliver binding dispute settlement decisions”. (See: Regulatory Alert-EU, European Commission Presents Draft Reform of EU Trade Enforcement Regulation).
The Trade Commissioner recalled the recently concluded agreement with mainland China for the protection of geographical indications as part of the Commission’s efforts to protect intellectual property rights. He explained that French agricultural goods represent 25 out of the first 100 products of the newly protected indications.
Hogan further claimed that the new Commission is “determined to make progress on the International Procurement Instrument, aimed at ensuring fair competition and a level playing field in international public procurement”. He claimed that the Commission wants EU companies to have “the same access to public procurement opportunities that the EU grants to foreign companies”.
Commissioner Hogan commented that the new Commission will address the distortive effects of foreign subsidies in the internal EU market and the possible adjustments to EU rules on competition. In this connection, as an example, it might be of interest to Hong Kong traders to know that the Commission is currently conducting an anti-subsidy investigation (AS660) concerning imports of stainless steel hot-rolled flat products originating in mainland China and Indonesia.
Finally, regarding the relationship with the United States, Hogan explained that the Commission is currently cooperating closely with the French authorities in the Airbus case and on the digital services tax issue. Regarding the Airbus case, where the United Sates is applying countermeasures (which are WTO-consistent), Hogan claimed that the Commission wants to “avoid an escalation and find negotiated solutions” with the United States, while always preserving the EU’s trade interests. Referring to the digital tax matter, where the US has threatened action against France, Hogan claimed that the unilateral actions of the United States, outside the framework of the WTO, are simply unacceptable.
As Hong Kong traders with interests in the EU can appreciate, climate change and the protection of the EU’s internal market in the international trade framework are amongst the top priorities of the recently elected Commission. Phil Hogan is gathering support of EU Members States to secure a smooth implementation of such measures, which will certainly have an impact on industries outside the EU exporting their goods to EU consumers.