Measures in place to protect the interests of Irish farmers in the Mercosur trade deal


A marginal reduction of around 50 million euros, compared to an annual value of 2.3 billion euros in Irish beef production, would result from the ratification of the EU-Mercosur trade agreement, according to an assessment by the EU-Mercosur trade agreement commissioned by the government.

Additional beef supply could be expected from Mercosur countries, but the amount will be limited and phased over six years, according to the assessment prepared by the EU-based advisory group Implement Economics, with contributions from stakeholders representing the ‘agriculture, business and industry, NGOs, government departments and agencies for business and the environment, and a steering group of representatives from the Ministries of Enterprise, Trade and Employment , and Agriculture, Food and Marine, and Teagasc.

The rather modest increase in imports, however, would focus on high-quality cuts and displace some of Irish beef in the EU market, if no mitigation measures were taken.

Irish beef sector

For the Irish beef sector, a higher estimate of the impact is a reduction in production volume of 0.08%, but the value of Irish beef production could fall by just over 2% .

In the assessment it was noted that several measures at EU level are in place (or planned) to protect the interests of Irish farmers and consumers.

These include a support program of up to € 1 billion to help EU farmers, including Irish beef farmers, in the event of a significant market disruption.

The trade agreement includes a safeguard clause, which can be used if the EU agri-food sector is, or is likely to be, seriously disrupted by increased imports.

All imported beef and other food products should fully comply with EU food safety standards.

EU

The EU currently imports around 200,000 tonnes of beef from Mercosur countries, of which 75,000 tonnes are over-quota imports paying a high tariff of 40-45%. In the trade deal, the EU would maintain existing beef import quotas and high over-quota tariffs. But the EU would commit to a controlled and gradual opening of a new quota (with an in-quota tariff of 7.5%), and to reduce the in-quota tariff to zero on the existing quotas.

The expected additional imports of around 50,000 tonnes of beef to the EU, when the trade agreement is fully implemented, after six years, represent only half of the new quota of 99,000 tonnes, as over-quota quantities existing use of the new quota and lowering in-quota tariffs will increase the use of existing quotas.

The expected increase in imports corresponds to around 0.7% of total EU beef production.

This is a high-end estimate, based on Mercosur’s remaining competitive exchange rates and the attractive EU market relative to other Mercosur export beef importers (such as China).

The assessment prepared for the Irish government considers that an increase (up to 1.1%) in agri-food exports from Mercosur to the EU after the trade agreement would not imply increased land use, nor illegal deforestation. . Rather, the additional production would come from more intensive use of existing agricultural land.

An expected increase in Brazilian beef exports to the EU of around 20,000 tonnes would correspond to a 0.2% increase in Brazilian beef production. No increase in the use of agricultural land for beef production in Brazil is envisaged.

According to the assessment, only 7-10% of agricultural land in Brazil and Argentina is devoted to beef, with grains, vegetables and fruits accounting for 85-90%.

Negotiations

However, more than 340 civil society organizations have urged the EU to suspend trade negotiations with Mercosur countries (Argentina, Brazil, Paraguay and Uruguay) due to deteriorating human rights and environmental conditions in the country. Brazil.

According to the new assessment, a cooperative approach to bring about sufficient policy changes in Mercosur countries and in the EU to offset the negative impacts of trade on biodiversity and forests, climate and environment, is part of the EU-Mercosur trade agreement. . And without the trade deal, it might be more difficult for the EU to exert any influence with Mercosur’s trading partners.

A key responsibility of the recently appointed EU Chief Trade Enforcement Officer would be to ensure that Mercosur beef production complies with EU rules and regulations, and that the sustainability and environmental commitments demanded of farmers of the EU are also respected by the producers of Mercosur.

Trade liberalization with Mercosur would slightly increase the reduction requirements necessary to meet Paris climate commitments in Ireland, by 0.06%.

However, the measures in the Irish Climate Bill could neutralize this impact.

On the positive side, it is underlined that the EU wishes to be the first major trading bloc to conclude a trade deal with the Mercosur bloc. Failure to ratify the deal would risk damaging the EU’s credibility in future trade negotiations.

There could be a first-mover advantage, giving the EU a competitive advantage in the Mercosur market of over 260 million consumers.

Challenges

However, Mercosur is a difficult market, difficult to penetrate, with low purchasing power of consumers, and low prices would make it difficult for Irish businesses to compete.

Overall, the EU-Mercosur deal is expected to increase Irish exports to Mercosur by 17% and imports by 12%, and add € 0.5 billion to Ireland’s GDP in 2035 (an increase of 0.13%).

At the recent Council of EU Agriculture Ministers in Brussels, the Minister of State at the Ministry of Agriculture, Food and Marine, Martin Heydon, said that the EU-Mercosur agreement is a prime example of the need for a level playing field: “We support efforts to add additional, strong and legally enforceable commitments on environmental and climate action to this agreement.

“These commitments should include a regime of sanctions in the event of non-compliance, including the potential elimination of preferential tariff quotas. “

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