The EU and South American Bloc Mercosur are set to sign the ‘Mercosur trade deal’ that has been 25 years in the making. But what does this mean for the future of Irish farmers?
The proposed Mercosur treaty is meant to create one of the world’s largest free trading areas. This deal will favour exports of European cars, wine, spirits and machinery to Mercosur and in return allow for the cheaper importing of beef, sugar, rice, honey and soy to the EU.
However, not all goods being traded will be exempt from tariffs. With a ‘ tariff-rate quota’ (TRQ) being applied to certain products like food and farm goods; which means they will still have tariffs but at a significantly lower rate. This deal was first proposed in 1999 between EU member states and the founding members of Mercosur; Brazil, Argentina, Uruguay and Paraguay.
During the past twenty five years, the deal has faced significant internal political opposition from several EU countries. However, in recent months the pressure to implement this treaty has significantly risen. This comes off the backs of the US Trump’s administration and their mounting threats of worldwide tariffs and the economic implications this will mean for the rest of the world.
Following the signing of the Mercosur deal on Saturday the 17th of January, the EU and Mercosur bloc will have to wait for the treaty to be ratified by Mercosur members and the European Parliament. However, if there will be a majority in favour of the ratification still remains uncertain.
EU countries such as Germany and Spain have expressed support for this treaty, as they believe the deal will be a boost for industry and exports. However, in recent days, many farmers in the EU countries of Ireland, Belgium, France and Poland have begun protesting this deal.
Irish farmers hold major concerns over the implications of this deal and the possibility of cheaper South American products and the negative impact this will have for Ireland’s primary sector, in particular for the Irish beef industry.
With Irish beef farmers expressing fears over the increase in imports of cheaper, poorer quality beef; as South American beef doesn’t have to meet the same high standards of Irish beef as imposed by the Food Safety Authority of Ireland (FSAI). Through this proposed Mercosur deal, Mercosur countries will be able to export 99,000 tonnes of beef to the EU at a reduced tariff of 7.5%, compared to the original standard tariff set at 40-45%.
In a bid to try and alleviate European farmers’ concerns, the EU has proposed a crisis fund and announced safeguards which will allow for the suspension of preferential tariffs if a surge of damaging imports were to arise.
However, many farmers have expressed concerns that this won’t be enough to protect the future of the Irish beef industry. Ireland stands with its farming industry and has expressed its complete opposition to the deal and has voted against the treaty. With tánaiste Simon Harris stating that these negotiations “are not sufficient to satisfy our citizens.”
The future of the Mercosur deal remains uncertain. Even through Ireland’s objections, the deal can only be blocked through opposition from at least four member states that make up 35% of the EU population. For now, the undetermined Mercosur deal has left the future of Irish beef farming on the brink of uncertainty.
