Chapter News, Trade & TTIP Related

Extracts from Commissioner Phil Hogan’s remarks at European-American Chamber of Commerce event on Transatlantic Leadership Post-Covid

From EU Trade Commissioner Phil Hogan |

Introduction

  • I spent the lockdown at the heart of the EU, where all the action is. I worked every day in Brussels, to keep the bays moving.
  • Right now everyone, be it companies or otherwise is evaluating his or her Trade Policy. It will not be business as usual. Major changes are taking place.
  • Fundamentally, every company will have to look at their mission statements to adapt to the reality ahead. For the EU, we will focus on sustainability, with the new EU Green Deal, and new technologies. We have also learned we are vulnerable and we know now that we need to diversify and change.
  • We identified that we were too dependent on certain regions. For example, we will have to rely less on PPE from China and less on pharmaceuticals from India.
  • De-globalisation is not the solution – we will never be self-sufficient in the EU. We are mindful of the fact we have to address certain areas, like medical/pharmaceuticals. We need to work with the G20 and within the WTO to move ahead. I sent some proposals to the US, but I get the impression they are more protectionist, and looking to increase tariffs, not lower them.

Transatlantic Relations

  • Together, the EU and the US can do a lot of good in a short period of time, if there is sufficient political will. By working together, we can do a lot for trade and technology.  However, it takes two to tango.
  • It seems to me that both President Trump  and Vice President Biden want to see America great again. So would the EU. A stronger EU means a stronger US.  Remember, 65 per cent of all EU FDI goes to US. Politicians seem to be playing against the breeze with the level of economic interconnectedness.
  • My message to Ambassador Lightizer is that we can reduce tariffs on pharmaceutical and medical, we can frame standards on technology and we can work together on WTO. As soon as the US and EU came together, China did a 180-degree spin. We are losing a lot by not working together.

WTO Reform

  • We need to reform the organisation, but I fundamentally disagree with the US’s approach to WTO.  Ironically, it was Ambassador Lighthizer who said, “if we did not have it, we would have to set it up.” So let’s work together !
  • My question to the political representatives of each WTO country is “do you want the WTO and, if so, what is its purpose?”
  • We need to reinvigorate the WTO politically. It is in a state of crisis, with major reform required and the next DG has to be someone with political experience.
  • To ensure the political discussion around WTO, the member country Heads of Government need to reiterate their support for rules-based trade.  The benefits of trade need to be distributed in tax and benefit systems in the domestic sphere. Each region of a WTO country needs to reap benefits of trade.  We always hear from the losers in trade, not the winners.
  • At end of the day, we all need to take responsibility, we need to speak up for the right thing. In the EU, every €1 billion of exports in rural areas in agri-food creates 14 000 jobs. I am sure the same is true in the US.

Vulnerabilities for EU Trade

  • We are responding to our vulnerabilities, particularly around medical, pharmaceuticals and digital trade. We are going to assist companies to do more in the EU and in our neighbourhood. It is a finite number of sectors. We will also want to see a rules-based approach. We will be establishing a Chief Trade Enforcement Officer in the future and the EU will be more assertive in terms of our trade policy.

EU-UK Future Relationship

  • The divorce is over. We are now talking about how to live together. Big decisions have already been made. The UK is out of the Customs Union and out of the Single Market. We are trying to mitigate the damage of this change, establish regulatory agreements with minimal disruption and damage to businesses, with special attention to Financial Services, Data and Fisheries.
  • While I can really understand the desire for a UK independent trade policy, they must remember they are next-door neighbours of the EU – not 5 000km away, like Canada.
  • PM Boris Johnson says there will be a quick and easy US-UK deal. It will not be a deal, it will be a framework. There will be a photo opportunity at some stage.

EU – Latin American Trade

  • Look at the EU-Mercosur 2019 deal. It is the largest geopolitical agreement ever made. It’s another example of where we hear from the losers, not the winners. €5 billion of trade subsidies are being eliminated are well as the elimination of barriers to trade. The agreement ensures that countries like Brazil have signed-up to the Paris Climate Agreement.
  • In addition to Mercosur, we are also upgrading existing agreements with Chile, Colombia, Ecuador and Mexico.

Closing Remarks

  • I’m very happy to join this useful collaboration between the US and EU. Keep up the good work and, if you can give any recommendations to the White House, tell them we’re open for business and dialogue so that we can work together.

Compliments of the European Commission.