Five top priorities for newly appointed Trade Commissioner, Valdis Dombrovskis

By Francine Cunningham, Hein Hobbelen

10-2020

European Commission Vice President and former Latvian Prime Minister, Valdis Dombrovskis, was officially confirmed as the new Trade Commissioner on 7 October, following the recent resignation of Phil Hogan over an infringement of COVID-19 restrictions in Ireland. Mr Dombrovskis “aced” a Hearing in the European Parliament last week and received cross-party praise for providing very measured and detailed answers.

His appointment means that the trade portfolio will now be in the hands of one of the three Executive Vice Presidents of the European Commission, reflecting the strategic importance of trade issues in the current geopolitical climate. Since Mr Dombrovskis used to oversee the work of Mr Hogan in the Commission hierarchy and also comes from the same centre-right European People’s Party, there is unlikely to be any substantial change in the direction of trade policy under his tenure. Indeed, Mr Dombrovskis declared that “Europe needs to become more assertive,” echoing a statement that Mr Hogan gave during his Hearing a year ago.

Nevertheless, his statements at the hearing, along with his answers to written questions from MEPs, have indicated a number of priorities and future initiatives, including the following:

Trade Defence Tools: Mr Dombrovskis said that the EU’s trade defence tools need to be sharpened and undertook to support the launch of a new legal instrument dealing with distortions from foreign subsidies in the internal market. He also wants to ensure that screening mechanisms for foreign direct investment are functioning effectively on the ground. Notably, the Vice President announced that he would table a proposal next year for a new anti-coercion mechanism to address actions by third countries taken outside of the WTO framework. The aim would be to counter “coercive” actions by the U.S. or China, countries that have previously threatened the EU with trade restrictions or tariffs against European car manufacturers, among other products.

Anti-Dumping Measures: In reference to what Mr Dombrovskis called a “more confrontational international trade scene”, he strongly backed the active use of anti-dumping and anti-subsidy remedies. The Vice President referred to positive results from the use of anti-dumping measures, noting that “imports of the products concerned go down on average by some 80% when we implement our anti-dumping, anti-subsidy safeguard measures.”

China: As the current co-chair of the High-Level Economic Dialogue with China, Mr Dombrovskis said he would pursue engagement with Beijing to enhance the EU’s trade and investment relationship with China. A priority will be to conclude a Comprehensive Agreement on Investment by the end of 2020. However, the Vice President noted that this partnership must be rebalanced because the current situation is asymmetric. In particular, Mr Dombrovskis noted concerns regarding the transparency of industrial subsidies, forced technology transfers and intellectual property rights. He commented: “European companies in China need fair treatment and real market access.”

Enforcement: according to Mr Dombrovskis, the recently created position of Chief Trade Enforcement Officer (CTO) will help to enforce trade deals more effectively and enable a more systematic approach to the removal of market access barriers in third countries. The CTO will also deal with enforcement of the trade and sustainable development chapters in EU trade agreements.

Greener trade: Mr Dombrovskis has emphasised a values-based approach, declaring “today, trade is about much more than just trade”. He wants to reshape the EU’s future trade policy to make it more sustainable, commenting for example that the EU must find a lasting solution for the Amazon region before ratifying the Mercosur trade agreement. He also highlighted the launch of a World Trade Organization trade and climate initiative, focusing on green goods. Several MEPs called for a trade policy linked closely to the EU’s “Green Deal” strategy and the Sustainable Development Goals, as well requesting a proposal to enforce sustainable development chapters in trade agreements through sanctions.