‘The EU found out that we are dependent on Russia. We can’t afford that’ – The Irish Times

No one loves free trade anymore, the great powers have embraced protection, the European Union can achieve little. So goes the narrative. But in her seventh-floor office in Brussels, the jovial Sabine Weyand tries not to take it too seriously.

“Trade and investment ties are holding up. Capital flows are continuing. I don’t really think that you can say that there is an age of deglobalisation. We live through a reconfiguration of globalisation,” says the director general of the EU’s trade department.

Yes, Covid-19 led to a search for resilient supply chains. But Russia’s invasion of Ukraine “has really put the wind in the sails” of Brussels’s plans for trade deals.

The EU’s official buildings look and feel like black holes for personality. Weyand has avoided being swallowed whole. After nearly 30 years in the European Commission, she is recognisable not just by her black glasses and bob, but by her blunt phrasing and willingness to make a joke.

As the EU’s deputy Brexit negotiator, she was known as the brains behind Michel Barnier. She rejected British proposals for the Northern Irish border as “unicorns”, earning the scorn of Brexiteers. “It’s unusual for an official to have so much public visibility: I didn’t like that so much.”

That is the irony: Brexit was partly a revolt against the European bureaucrats; Brussels bureaucrats like Weyand ensured it achieved much less than its proponents wanted. The other irony is that Weyand is an Anglophile, who studied at Cambridge from 1986-87 and whose free-trading outlook is in line with the UK’s historic instincts.

She concedes that Brexit “has made integration easier” for the EU on security and justice and home affairs, but adds: “On trade, we are missing a liberal voice, which we had at the table. It has taken the EU a while to find a new equilibrium here, but I think we are there now.”

The one thing I stopped doing fairly early was to assume that all choices by the UK would be rational.

Sabine Weyand on Brexit negotiations

That new equilibrium is a major shift. Under French influence, the EU decided that nice guys finish last and that assertiveness pays. The commission has responded to Donald Trump, Chinese subsidies, and sustainability concerns by developing new defensive powers, including a carbon tax on imports.

The trade directorate has dragged its feet on the most expansive proposals. But Weyand insists the direction is right: “We need partners more than ever, but we have to [engage] on the basis of strength.”

Weyand’s belief in the EU is born of her upbringing in the German village of Körprich, Saarland, half an hour’s drive from the French border. “Europe has always been the reality on the ground for me, but also an aspiration . . . We always went over to France to have a good meal.”

In person, she is forthright but controlled. I mention that her father was a politician. “A local politician,” she says. Is the distinction important, I ask. “I don’t know. I just wanted to be precise.” She studied politics, economics and English literature, then did a masters at the College of Europe and “got hooked”.

In Brussels, she is mastering both the detail and the context: “You need to be a policy wonk but also a politics wonk.” Her border upbringing has helped. “She understands what drives the French and what drives the Germans,” says Pascal Lamy, who appointed her to his Cabinet when he was trade commissioner. “She’s a four-wheel drive. She can do very different things.”

By 2016, Weyand was a deputy director general at the trade directorate. Negotiating Brexit might have seemed like a hospital pass. But she “wanted the job . . . There is my girl-scout attitude kicking in . . . I wanted to serve the European project.” Did she ever believe that the UK would really leave without a deal?

“The one thing I stopped doing fairly early was to assume that all choices by the UK would be rational. Leaving without a deal would not be the rational choice, but that wouldn’t mean that it wouldn’t be made. But it was very largely seen as a bluff. And it didn’t happen, did it?”

Weyand left the Brexit role in mid-2019, before Boris Johnson negotiated the Northern Ireland protocol. The new UK prime minister Liz Truss is committed to ripping up the protocol. Are we still in the land of unicorns?

“No, I think we are in the land of nostalgia. I would wish we could stop talking about Brexit, because the UK has left the EU. I very much feel that the UK is still clinging to the past — by prolonging this discussion about Brexit … We have to find a new accommodation. It will not happen as long as the UK seems to be fighting the battles of the past.”

How are businesses coping with rising costs across the board?

On the spot

Advice on how to negotiate? Don’t take yourself too seriously, and remember that it’s only win-win that will get you a deal.

UK: friend or foe? Partner and ally.

Will another country leave the EU? No. I don’t think it’s been an experience that has encouraged this sort of desire elsewhere in the EU.

One thing you’d change about Brussels as a city? No, I like Brussels.

Is the EU really up for a trade war, given events in Ukraine? “I’m not going to speculate. But it makes it very difficult to have an alliance in defence of a rules-based international order if in our bilateral relationship these rules are not respected.”

Relations with the US have improved under Joe Biden, but Washington’s chips act, which gives $58bn in subsidies for domestic manufacturers, poses issues. “If I look at all the public money that goes into semiconductors, we have to guard against a risk of a subsidies race, which will turn out to be very expensive,” says Weyand, without naming the US.

“People will say, in order to make it work, let’s not import anything. It’s the risk of the beggar-thy-name policy.”

Some subsidies are justified, but without co-ordination, companies can go “subsidy shopping”. “We’ve seen that: they go around on both sides of the Atlantic and say who offers me more. There we have to be careful.”

Are the west’s sanctions on Moscow working? Weyand, a self-described “news junkie”, cites recent leaks from within Russia. “They are running out of chips, which affects their industrial production but also their military capabilities . . . Look at a flagship product like a Lada [car] now being produced without airbags. And that is just emblematic. If you hear that they depend on drones from Iran and ammunition from North Korea, you do realise that the sanctions are working.” So far, the EU finds little evidence that the sanctions are being circumvented.

Is there anything left in the EU’s toolbox? “We have done a lot indeed on the goods side, there are more things we can do on the services side. But it’s a matter of how does it work in practice, where are there gaps or unintended consequences.”

Weyand argues that Russia’s aggression has spurred trade co-operation. First, EU countries now see the need to diversify their trade. “We found out that we are dependent on Russia not just for fossil fuel, but on a number of critical raw materials. We can’t afford that … Then we realise that there are certain dependencies with respect to China, and there also we have to be careful: we never know when dependencies might get weaponised.”

Second, other countries are in the same positions. “Everyone is looking at their dependencies: they are vulnerabilities, not trade links.”

She hopes to conclude trade deals with Mexico and Chile this year. “We may need a little bit more time with [the trade bloc] Mercosur, because we still have to negotiate an additional instrument on deforestation . . . The priority is looking at Latin America, which we have left very much in the hands of China over the last few years.”

Concluding a deal with Australia is now aimed for spring 2023. Meanwhile, India is “challenging”: the hope is to conclude negotiations before the end of the present commission in 2024.

Whatever deals the EU strikes will inevitably be compared with those signed by the UK, post-Brexit. Brussels arguably drove a harder bargain with New Zealand than London did. “In international trade negotiations, size matters,” says Weyand. “On the other hand, the UK has taken the choice of basically doing a full opening of their agricultural market. That’s not the choice we have made or would ever make.”

But the real strategic challenge is China. In response to abuses in Xinjiang, the commission is proposing a ban on marketing products made by forced labour. An outright import ban would risk being “discriminatory”, given there is evidence of forced labour inside the EU.

You know, I am very much into Max Weber, into the importance of competent bureaucracy to help politicians realise their objectives

Sabine Weygand on bureacracy

Does taking unilateral actions undermine the EU’s credibility in multilateral forums like the World Trade Organization? “It depends.” Some developing countries, including Indonesia, are “concerned that it would be very difficult to meet our criteria for access to our markets on deforestation and other production method criteria.”

But there are few complaints about the EU’s measures to protect against subsidised imports and economic coercion. “Brazil has been looking at an anti-coercion instrument of their own, because we all face the same problem of the erosion of the multilateral trading system.”

Weyand may spend her whole career in the commission; her husband also works there. Does the negative stereotype of Brussels bureaucrats ever get to her? “You know, I am very much into Max Weber, into the importance of competent bureaucracy to help politicians realise their objectives for which they are elected. There are distortions and prejudices, there are clichés, but you know, you have to accept that.”

Has Brussels changed her? She exhales. “You need roots somewhere. What roots me is still my family and friends in Germany, but also in other places. I don’t really feel that I’m confined by the Brussels bubble.”

Copyright The Financial Times Limited 2022

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