The European Commission has sought to assure Irish farmers that it is “listening to their concerns” over plans to allow 99,000 tonnes of South American beef tariff-free access to European markets.
The two agreements — the EU-Mercosur Partnership Agreement (EMPA) and the EU-Mexico Modernised Global Agreement (MGA) — require ratification by EU member states’ parliaments and the European Parliament, a process which began on Wednesday, September 3, after it was signed off by the EU’s 27 commissioners.
These landmark deals form a critical part of the EU’s strategy to diversify its trade relations and strengthen economic and political ties with like-minded partners around the world.
An agreement with Mexico has existed since 2000, but this deal will now be updated so that 99% of the trade with Mexico is now liberalised.
The EU Mercosur deal will include a beef import quota limited to 99,000 tonnes carcase weights, comprising (55%) 45,000 tones of fresh, high-quality cuts and 45% frozen, lower-quality meat. Imports of South American beef into the EU are already at 200,000 tonnes annually.
The impact to farmers here is mostly expected to come from competition over markets within the EU, rather than on Irish supermarket shelves. Currently, Ireland exports around 440,000 tonnes of beef, worth around €2.8bn, with Britain, France, and the Netherlands among the top buyers.
Addressing Irish journalists at a European Commission technical briefing, a spokesperson said the Mercosur and Mexico agreements will offer significant economic benefits for the EU, including the removal of €5bn in tariffs for European exporters, and an anticipated 40% increase in exports to Mercosur countries, representing about €55bn in value.
Specific opportunities for the agri-food sector included reduced tariffs and protected geographical indications, new market access with tariff reductions for cheese, and lower tariffs and geographical indication protections for wine and spirits — including Irish whiskey.
Under the agreements, 564 geographical indications will be protected, including Irish whiskey and cream, which will prevent the unauthorised use of EU product names.
The commission’s economic projections expect that beef prices will fall by 1-2% as a result of the deal, amounting to €342m in production losses.
However, safeguards will also be put in place to try and protect sensitive sectors, such as beef, should more market disruption occur.
For example, the industry can request an investigation should beef prices fall 10% and €6.3bn in funding will be made available over five years, should markets fall substantially.
The commission spokesperson said: “Safeguard provisions are included in the agreement, setting clear criterias, for example, a 10% increase in imports and 10% decrease in beef price to protect European farmers, so that if these, let’s say, standard markets and disturbances, will happen immediately, will start an investigation under the safeguards and without this station, you react within five days and will be ready to impose measures within 21 days.”
The investigation will have the power to raise tariffs back to 45% if it finds that the market has been negatively impacted. An investigation can be triggered by just 25% of the industry affected getting behind the request. The higher tariffs can be imposed for two years, with the possibility of being extended for a further two years if required.
“This is something that we have never done before, for any agreement to have such tight timing for initiating and launching an investigation and actually imposing the measures,” the spokesperson added.
The ratification process is expected to take just over a year, with the final agreement expected to come into force at the end of 2026 or the beginning of 2027.
The council process will take three to four months, and will see the agreement trade policy committee give its expert view. The secretary general of the council then has to prepare the decision for signatures.
The European Parliament will then review and vote on the trade agreement. This requires a simple majority consent and is expected to take four to five months.
In the meantime, an interim trade agreement will continue indefinitely until the wider agreement is fully ratified. If national parliaments delay ratification, the trade provisions remain in force.
Trade provisions can be implemented immediately after council and parliament approval, and national parliaments’ ratification of the framework agreement will not halt trade provisions.
Midlands North-West MEP and member of the European Parliament’s trade committee Nina Carberry claimed the decision to “split” the agreement was designed to sidestep national parliaments and avoid scrutiny.
By splitting the deal, the commission would bypass national parliaments, including the Dáil, and rely only on a qualified majority in the council, rather than unanimous approval from member states, she said.
“While there is no doubting the importance of free trade for Ireland as a small open economy, the Mercosur deal, as it stands, would deal a hammer blow to Ireland’s beef sector, with significant financial implications,” Ms Carberry said.
The real issue is the clear inconsistency in food safety and environmental rules between the Mercosur bloc and the EU
“With the Green Deal, Irish farmers are being asked to go further and faster on cutting emissions. It is simply unacceptable to then force them to compete with imports from countries that do not meet the same standards.
“Our farmers produce some of the highest quality, most sustainable beef in the world. Sacrificing that on the Mercosur altar would be wrong.
“The key question remains, what does enforcement of standards look like? Without robust and enforceable standards this deal cannot be justified.”
Even with smaller quantities of beef being imported, it is hard to see how the agreements will not have a negative impact on EU farmer incomes. Irish farmers are already describing the move as a “betrayal” and are calling on the Irish Government to step up to block the deal.
Irish Farmers’ Association president Francie Gorman said now was the time for the Irish Government to stand up on Mercosur.
“We have had plenty of assurances about the Government’s opposition to the Mercosur deal, but it has to deliver. We cannot countenance a deal that refuses to recognise the gap in standards between the EU and Brazil,” he said.
At every opportunity, we have raised this with the Taoiseach, the Tánaiste, and the minister for agriculture
“During the last general election, we had their backing to oppose the deal and that commitment has to stand. Failure to do so would amount to reneging on what has been promised.”
Mr Gorman said beef and poultry producers should not have to pay the price of allowing other sectors to gain access to the South American market. “Either standards count for something, or they don’t,” he said.
“The EU Commission would probably like to push this through without much discussion, but we will be looking to other member states which have issues with the deal to back us here. There is also a role for our MEPs to build alliances with colleagues to mount a blocking vote to the deal,” he said.
“Even with improved prices over the last 12 months, the incomes of beef producers are very modest. It’s both hypocritical and contradictory to insist on the highest standards for European producers only to allow Mercosur countries access without reaching the same standards,” Mr Gorman added.
Echoing calls for the Government to intervene and make a case alongside France to block the deal, Irish Creamery Milk Suppliers Association president Denis Drennan said the commission’s move to ratify Mercosur was “a calculated betrayal” and “mind-boggling hypocrisy”.
Mr Drennan said: “How can anybody imagine that we can have Irish and other EU farmers practically drowning in a relentless tide of EU micro-regulations on the environment and sustainability, while the very same EU concludes a trade agreement that will see massive imports of beef and other foodstuffs produced in an environmental free-for-all and without a semblance of sustainability? If this proceeds, then it becomes the ‘gold standard’ in international and institutional hypocrisy and double standards.”
“The ‘other side’ of a Mercosur ratification would have Irish farmers producing beef subject to the most stringent sustainability and environmental regulations and oversight imaginable having their beef side-by-side on European supermarket shelves with cheaper South American beef produced to notably lower standards of regulation, health and traceability on ex-forest land cleared by burning with any indigenous peoples driven off, forcibly evicted — or worse — by the corporate rancher-barons who comprise the beef sectors in these States.
“Not alone will this be the result — the commission is proceeding on the basis that they will accept that as the result.”