China-EU investment deal: exit of European trade commissioner adds uncertainty to landmark talks

Wendy Wu
·4-min read

The departure of the European Union’s top trade negotiator would add uncertainty to the negotiation of a landmark investment deal with Beijing and the bloc must act quickly to deal with the change, observers said.

EU trade commissioner Phil Hogan announced his resignation on Wednesday after he attended a packed golf society dinner in Ireland last week that breached the country’s coronavirus guidelines.

Hogan, an Irish political veteran who moved to Brussels as the agriculture commissioner from 2014 to 2019, secured an agreement on geographical indications with China in November, a milestone to improve bilateral intellectual property protection. He was later appointed trade commissioner on the team of new European Commission President Ursula von der Leyen.

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He has been deeply involved in Brexit talks and oversaw talks with the bloc’s trading partners, including the ongoing investment treaty negotiation with Beijing.

Joerg Wuttke, president of the European Union Chamber of Commerce in China, said recent progress in investment talks had reignited hopes of a breakthrough within the year. However, Wuttke said, it was important to have an influential political figure familiar with the China portfolio in Brussels to coordinate both sides’ positions.

“The EU team [for the investment talks] is extremely capable and the progress they have made over the last few weeks makes the possibility of a political agreement this year seem feasible,” Wuttke said.

“However, making this a reality will require a transfer of the team’s achievements into the hands of a genuine political heavyweight in Europe.”

Joerg Wuttke, president of the European Chamber of Commerce in China. Photo: EPA
Joerg Wuttke, president of the European Chamber of Commerce in China. Photo: EPA

He said it would be difficult to replace Hogan, who “has a lot of authenticity and credibility”, and was experienced in dealing with trade issues with China and the United States.

“The EU has to close the gap fast so that they don’t drop the ball,” Wuttke said.

A videoconference between President Xi Jinping and leaders of the EU and major member states is planned for September 14 with the investment deal at the top of the agenda, potentially building momentum for the 32nd round of investment negotiations on September 21-25.

China-EU investment talks – SCMP Series

Cui Hongjian, director of European studies at the China Institute of International Studies in Beijing, said the departure of Hogan as EU trade commissioner was not an obstacle to negotiation.

“The investment talks have now entered into the stage that the core issues are left to the realm of political decision-making and go beyond the reach of technocrats. The position of trade commissioner has limited influence on the agreement,” Cui said.

But Wuttke said China should not play down the uncertainties of the personnel change.

“It would be terrible if Hogan’s resignation derails or causes further delays to decision-making in the investment talks. China is lucky to have [German chancellor] Angela Merkel currently in the driving seat for the European Council, but she needs people around her who have credibility, the language and the knowledge in order to sell this investment agreement,” Wuttke said.

“This is something that maybe the Chinese side underestimates. This will not be a walk in the park.”

Ireland will now have to nominate a new commissioner to replace Hogan or a commissioner for another position that would lead to a reshuffling of the EU’s executive body. The nominee has to be approved by the European Parliament before formally taking the position.

Wang Yiwei, a professor of European studies at Renmin University in Beijing, said Hogan was “pragmatic, active, familiar with China and talks little on ideological issues”.

He also noted that Ireland had friendly relations with China and was open to China’s investment.

“The trade commissioner solidifies and oversees the bloc’s trade policy. The EU is now in free-trade talks with India,” Wang said.

“For the investment deal, the key would be which compromises China is going to make on key issues such as subsidies and state-owned enterprises and how the EU will respond to China’s demands.”

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