EU must address negative impacts of Mercosur on Irish beef industry

January 5th, 2018 7:10 AM

By Southern Star Team

Minane Bridge-based Senator Tim Lombard.

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Senator Tim Lombard, who is a member of the Joint Oireachtas Committee on Agriculture, Food and the Marine, writes about his concerns over the impact of a Mercosur deal on the Irish beef industry

AT a recent meeting of the Joint Oireachtas Committee on Agriculture Food and the Marine, the assistant general secretary Brendan Gleeson brought forward very unsettling news for the Irish beef industry in relation to the negotiations currently happening between the EU Commission and the members of Mercosur. 

This political and economic bloc in South America is looking to gain access to the EU market, which would just add product to an already over-saturated beef market. Negotiations on a potential ‘Bi-regional Association Agreement’ have been in the works since May 2010 after being suspended in 2004, with great progress being made to open up the market for both parties. 

While the Commission has been able to make progress towards protecting areas such as intellectual property, it is not providing all aspects of the market with the same level of protection. Despite many member states objecting, the Commission is moving forward with the current agreement.

Ireland has a small open economy that can be influenced by changes in the global market; being a member of the EU has helped to stabilise the economy while still providing the freedom of trade. The country’s focus has always been on protecting its most vulnerable sectors to keep a positive balance in the economy. 

One such industry is the beef sector, which makes up around 20% of agricultural exports. 

This has been a traditionally strong area of Ireland, but in the wake of Brexit there is a strong need to protect this industry from foreign competition – such as what comes with the Mercosur agreement. 

Ireland exported a lot of goods to the UK while it has been a member to the EU, with 37% of exports going to the UK in 2016, beating all other EU countries combined by over 5%. It has been reported that 270,000 tonnes of beef are exported to the UK each year, so the loss of this market with Brexit looming is already an issue that needs to be addressed before additional beef could potentially enter into the EU market. The Irish beef industry already expects to see a negative impact from Brexit and the additional supply prospect only increases its concerns.

When negotiations resumed, Mercosur was looking to have free access to the beef market in the EU, however this was an area of concern for both Ireland and multiple other member states, prompting them to push for a strong Tariff Rate Quota for beef. However, the composition of this agreement was at the centre of much debate.

Originally, Mercosur was seeking a beef TRQ for between 100,000 and 300,000 tonnes of beef, which the EU negotiated down to 78,000 tonnes in May 2016. 

While this does limit the amount of foreign beef, it won’t help to reduce the already-flooded post-Brexit beef market. Rather than allowing beef into the market at all, Ireland and other member states are pushing for the Commission to revisit the inclusion of beef in this agreement until the potential impacts of Brexit are addressed.

Rather than acknowledging the uncertainty surrounding Brexit, the Commission is only addressing the impacts the trade deal with Mercosur will have in these areas. The scenarios assumed by the report done show EU beef prices falling by from eight to 16% but that is not taking into account the impact of a tough Brexit, when these numbers are expected to rise. This level of change is not arbitrary and calls for reconsideration by the Commission before any decisions are made.

Ireland joined the EU to help grow its economy and has been supportive of international trade agreements that co-align with our export industries. Recent decisions made by the European Commission show that they are not treating all industries with the same level of protection shown to others. The Taoiseach and Minister Creed have reached out to both President Juncker and Commissioner Maalstrom about concerns Ireland has with the proposed agreement.

Irish politicians will continue to push the EU to re-evaluate the impacts of this trade agreement, so that the impacts do not fall on the backs of the Irish beef industry and the Irish people.

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