Sector News

EU bows to pressure and removes beef from Mercosur trade deal

May 13, 2016
Food & Drink

The European Commission has bowed to pressure from Ireland and other member states and removed beef from its proposed trade deal with South America.

Europe and Mercosur, the trading bloc which includes Brazil and Argentina, exchanged initial offers in Brussels on Wednesday after more than a decade of stop-start negotiations.

The deal, which encompasses €115 billion in annual trade, had been expected to include a more preferential tariff regime for beef imports from Mercosur countries.

However, this was removed at the last-minute following a determined campaign by several member states and a host of farming organisations, including the Irish Farmers’ Association (IFA) and the Irish Cattle and Sheep Farmers’ Association (ICSA).

European farmers fear they will be unable to compete with cheaper beef imports from South America, where the cost of production is significantly lower than in Europe.

Ireland, which exports more than 90 per cent of its beef output to Europe, is uniquely vulnerable to competition from South America.

ICSA president Patrick Kent said the threat posed to the Irish beef industry by vast quantities of cheap South American beef flooding European markets “was very real”.

“While the removal of an offer to the Mercosur block of a substantial tariff rate quota for beef is good news, we cannot become complacent on this issue,” he added.

IFA president Joe Healy described the removal of beef as a “positive move” but warned the new Irish Government that there could be no justification for re-introducing it at a later stage.

“Beef is a vital national interest for Ireland and under no circumstances can we allow the EU Commission to use it as the bargaining chip in the Mercosur negotiations,” he said.

Trade commissioner Cecilia Malmström and commissioner for agriculture Phil Hogan are understood to have agreed changes to the EU’s initial negotiating position at a meeting last month.

This followed heated exchanges at a meeting of the EU’s trade policy committee the previous day, where 14 delegates criticised the timing of the negotiations, which coincide with crashing commodity prices and falling farm incomes.

By Eoin Burke-Kennedy

Source: Irish Times

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