Representation in Ireland

EU-Mercosur Trade Deal: "safeguards are in place for Irish farmers and consumers" says European Commissioner Phil Hogan

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After 20 years of negotiations, the European Union has concluded a trade deal with the four Mercosur countries – Argentina, Brazil, Paraguay and Uruguay. This is the largest trade deal that the EU has ever negotiated, covering 773 million people.

It is a trade deal that offers significant opportunities for Irish businesses, of which nearly 300 are already exporting to Mercosur, but also presents real challenges, particularly to the beef sector in Europe.

As with any trade deal, this one has involved compromises and the EU has had to make some important concessions as part of the overall balance. One of those concessions involves a quota of 99 000 tonnes which can be imported from the Mercosur countries at preferential tariff rates. This amounts to just over 1 per cent of total EU beef consumption.

03/07/2019

Speaking after the conclusion of the negotiations, EU Commissioner for Agriculture & Rural Development, Phil Hogan said, “the concession of a beef quota to the Mercosur countries is of understandable concern to Irish beef farmers. The Commission appreciates the sensitivity of the beef sector in Europe and, particularly in Ireland, which exports 90 per cent of what it produces.”

Given the sensitivity of the beef sector, the deal includes a number of important safeguards which have been put in place to protect the interests of Irish farmers and consumers.

The EU is a global standards setter and will insist that all beef and other food products imported into Ireland comply 100 per cent with the EU’s stringent food safety standards. We can say, categorically, that beef or other food products imported from Mercosur will not be of a lower standard than those produced in Europe. This will be the responsibility of the EU’s Food & Veterinary Office, based at Grange in County Meath.

Commissioner Hogan also explained that these new arrangements will not be introduced overnight: “This beef quota will be implemented over several years, not starting before 2022 and then only over the following five years in annual instalments. In other words, it will be up to 2028 before this deal is fully implemented.”

The deal also includes a safeguard clause, which can be used if the EU agri-industry is seriously affected by increased imports. This is the first time that such a measure was included in any free trade agreement.

The Commissioner also announced that financial assistance for farmers would be made available if necessary – “Given the potential impact of this deal on the agri-food sector, the EU will have in place a support package of up to €1 billion to assist farmers, including Irish beef farmers, in the event of significant market disturbance. This is the first time that any such funding has been made available in the context of any trade agreement.”

A number of environment/climate commitments have been made to ensure that the Mercosur countries fulfil their obligations under the Paris Climate Agreement.

Commission Hogan was also anxious to stress that the deal has many positive aspects for Irish businesses – “Already, Ireland has a €1 billion surplus with Mercosur in traded services and we exports nearly €500 million worth of goods to the region. These goods come from companies all over Ireland in sectors that support over 110 000 jobs in Ireland in such areas as chemicals and pharmaceuticals, medical devices and machinery and electrical.”

The reduction or scrapping of tariffs in the agri-food sector presents new opportunities for exporters of cheese, skimmed milk powder and infant formula as well as Irish whiskey and cream. Many of these industries are based in rural Ireland and support rural communities throughout the country.

The Commissioner concluded by welcoming “the Taoiseach’s commitment to undertake a detailed economic evaluation of the deal before the Irish government delivers its verdict.”

Further information

Commission webpage on the EU-Mercosur agreement