With global trade sputtering because of coronavirus, Brexit talks turning into a game of chicken, and the trade conflict with the United States in desperate need of a cease-fire, the new commissioner will have their work cut out. While prior commissioners were able to focus on securing headline-grabbing trade deals, attention is now turning toward damage control.
Here are the five main tasks for the EU's new trade chief:
End trade war with the US
Commission President Ursula von der Leyen counted on Hogan, who proved a highly effective negotiator in his previous stint as agriculture commissioner, to reset the world's largest investment and trade relationship after years of U.S. President Donald Trump's tariff war. Disputes over French plans for a digital services tax that would hit American tech giants and European support for Boeing's chief rival, Airbus, gave Trump the ammunition he needed to roll out new duties.
Last week, Washington and Brussels agreed on a mini-deal of reciprocal tariff cuts. But Brussels hopes to put the longstanding dispute over the aircraft subsidies to bed for good when the World Trade Organization is set to determine the size of EU retaliation Brussels will be entitled to impose on U.S. products. The EU is keen to resolve its fight on the Western front so that it can turn it's attention eastwards and deal with China’s state-led economy.
Prevent EU deals from unraveling
The coronavirus has exposed an old fault line between the EU's more protectionist southern countries and more liberal northerners. Protectionism was already on the rise before the pandemic, and calls for reshoring have led Hogan to fundamentally question the EU's trade policy. His successor will have to decide whether this new direction of "open strategic autonomy" is the right way forward, and if it can please both camps.
But support for free trade is unraveling even in the EU's more open economies. The ratification of the EU's trade deals with Canada and the Southern American bloc of Mercosur has sparked opposition all over the EU, from Cyprus to the Netherlands, Germany and France. While the ongoing negotiations with Australia and New Zealand might not give the EU's new trade chief so many headaches, it will be difficult to ensure the existing ones get the green light in EU capitals. In the case of Mercosur, ratification by France and Germany is looking almost impossible.
Fix the multilateral trading system
To cope with distortions from China's heavily-subsidized economy, Brussels first needs to use its heft as the world's biggest trade bloc to help gets the World Trade Organization back on track. The Geneva-based institution is paralyzed because of a U.S. block on the appointment of judges at its highest court. Since December last year, international trade disputes can end up in legal limbo and quickly evolve into tariff wars.
Von der Leyen had asked Hogan to lead the reform of the WTO and come up with a plan by the end of this year. But first, the institution has to decide on a new global trade chief. Finding consensus might prove difficult as members even failed to reach an agreement on an interim chief. Hogan's successor will also have to get the 27 EU countries aligned on which of the eight candidates to back for the job.
Manage the fallout from Brexit
Negotiations over a future trade deal between the EU and the U.K. have turned into a game of chicken, increasing the chances of a no-deal outcome by the end of the year. Having agreed on a divorce package last year that allowed the U.K. to continue to trade with the EU, the two sides remain at an impasse on various issues, the thorniest being so-called level playing field rules, designed to prevent the U.K. from undercutting the EU in the future.
The EU is determined not to blink first and has repeatedly stressed that the U.K. has much more to lose in a no-deal scenario than Brussels. But a disorderly Brexit at the end of the year would be a major blow for the EU economy as well, especially when it coincides with the recovery from the corona crisis.
While the EU's trade commissioner isn't directly involved in the Brexit negotiations, he or she will inevitably have to deal with the trade implications after the transition period — deal or no deal.
Toughen up on climate and human rights — while negotiating a deal with Beijing
When it comes to climate and human rights, this "geopolitical" Commission wants to shift from words to deeds. A new role in the Commission of chief trade enforcer has to ensure sustainability promises made in trade deals are kept, or impose sanctions if they're not.
Those human rights and labor market reforms have traditionally been enforced by Brussels by dangling a big carrot in front of its future trading partner: access to 450 million often relatively wealthy consumers. But that trick doesn't seem to work in the EU's negotiations with China over an investment deal. There has barely been any progress with Beijing to eliminate market barriers for foreign investors, while worries over human rights violations in Uighur labor camps and in Hong Kong have only increased. Now that Beijing is pushing to complete the negotiations by the end of the year, the new EU trade commissioner will have to decide just how many sweeteners China will have to throw in to seal the deal.
This article is part of POLITICO’s premium policy service Pro Trade. From transatlantic trade wars to the U.K.’s future trading relationship with the EU and rest of the world, Pro Trade gives you the insight you need to plan your next move. Email pro@politico.eu for a complimentary trial.
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