The EconomistFebruary 29th 2020 Finance & economics 61Nasty,brutishandshort
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f the trumpadministration’s America is
the bully of the global trading system, the
European Union is the finger-wagging
school prefect. Instead of threatening ta-
riffs, its leaders have called for countries to
play fairly. As a trade war has raged be-
tween America and China, the eusuggest-
ed a rules-based solution. When the Trump
administration wrecked the system of
solving disputes at the World Trade Organi-
sation (wto), the euled the search for a fix.
As the world’s biggest exporter of services
and second only to China for goods, it has a
sizeable stake in preserving order.
Enter Phil Hogan, the eu’s burly trade
commissioner since December 2019. The
euis still a stickler for rules and the multi-
lateralism that Mr Hogan says is “in our
dna”. But he wants to wield a bigger stick.
“We have to stand up for our rights more as-
sertively and aggressively, in my view,” he
tells The Economist. By this he means de-
fending the euagainst unfair trading prac-
tices. The challenges range from concerns
about China’s state-led system of capital-
ism to fears that the eu’s trading partners
are not living up to their commitments.
Part of his brief involves continuing ef-
forts to rescue the system by which the wto
solves disputes. Meanwhile he will have to
manage the tense transatlantic relation-
ship. If the job was not daunting enough,
he will help negotiate what he hopes will be
an “amicable” trade deal with Britain.
Mr Hogan’s reputation as a canny politi-
cian willing to make tough decisions—his
nickname in Irish politics was “the enforc-
er”— suggests that he may be right for thejob.Onbehalfof his home county of Kil-
kenny, where he entered Irish politics at
the age of 22, he haggled effectively (for ex-
ample, ensuring that the region’s salt depot
was in Kilkenny, partly so that in case of ice
the local roads would be salted first). He is
“no flat tyre”, as one Leinster admirer puts
it. Later he drew controversy when in 2011,
as Ireland’s Minister for Environment,
Community and Local Government, he was
put in charge of introducing unpopular wa-
ter charges. It damaged his reputation. But
as a consolation prize, the Irish govern-
ment backed him as the eu’s agriculture
commissioner.
His experience over the following five
years meant that he became intimately ac-
quainted with the eu’s most sensitive
spots. Alongside Cecilia Malmström, then
the eu’s trade commissioner, he boasts of
concluding no fewer than 15 trade agree-
ments. According to some of the negotia-
tors who were on the opposite side of thetable, while he could be both charming and
funny, his strategies to avoid giving con-
cessions could be deeply frustrating. In
some cases, he simply declined to show up.
The American government may roll its
eyes at the talk of a tougher eutrade re-
gime. Some in America could accuse the
bloc of being too timid about using tariffs
to get its own way with trading partners,
and too weak to overcome the protectionist
instincts of its member states. They ask
why, if the euis so concerned about the de-
mise of the wto’s dispute-settlement sys-
tem, it ignored America’s complaints about
it for so long? Where, they ask, was the eu
while America was filing wto disputes
against China? Tough talk is cheap, results
will require action.
Mr Hogan’s first priority is to add mus-
cle to the eu’s defences. From May 1st he
will oversee a new “chief trade-enforce-
ment officer”, as well as new enforcement
unit dedicated to making sure that existing
trade deals are implemented properly. The
European Commission is proposing new
rules that would sharpen the eu’s teeth, in-
cluding an amendment to enforcement
regulations that would allow tariffs against
other governments blocking the wto’s dis-
pute-settlement system. On the topic of the
wto’s appellate body, Mr Hogan acknowl-
edges some of the American concerns, but
adds that he would love to see detailed pro-
posals for solutions to the problems from
the Trump administration.
Whether he can maintain stable trade
relations with America is another matter.
He raised hackles in September after an in-
terview in which he promised to teach Mr
Trump “the error of his ways”. Then in a
meeting in January he seems to have
clashed with Robert Lighthizer, the United
States Trade Representative. If he tries to
bring more assertiveness into the eu’s side
of the transatlantic relationship it could
end badly. Stephen Vaughn, an ex-col-
league of Mr Lighthizer, warns that at-
tempts to play hardball “could backfire”.
The Americans want, above all, broad
access to the eu’s agricultural market—
more than the lobsters, scallops and nuts
that are on offer. (Seafood technically
counts as an industrial product.) But as Mr
Hogan knows well from his previous job,
anything much broader than dismantling a
few non-tariff agricultural barriers is un-
palatable to member states.
He remains upbeat about the trans-
atlantic relationship. “I think that we’re in
a better place now than we were some
months ago,” he says. On February 14th a ta-
riff announcement related to a dispute
over aircraft subsidies was milder than ex-
pected. A reduction in car tariffs could be
on the table, he adds, if member states
agree. His challenge is not just to get trade
partners to play by the rules. It is to get his
own side on board, too. 7WASHINGTON, DC
A tough new trade commissioner has a
lot on his plateEuropean Union tradeHulk Hogan
The enforcer