The European beef sector will be disproportionately affected by future and ongoing EU trade deals a European Commission report has found, confirming concerns by the Irish Government that Irish farmers could be impacted negatively by a proposed EU trade deal with South American countries.
The commission study, which looked at the impact of 12 current and future agreements between EU and third countries, found that beef and rice would be adversely impacted by international trade deals, including the controversial Mercosur deal with South America.
Agreements
Speaking in Brussels, EU commissioner for agriculture Phil Hogan said that while the study found that the effect of international trade agreements on the EU agri-food sector was "broadly positive", some sectors were vulnerable. "There are winners – particularly in the areas where we have had huge difficulties in the last few years such as pig meat and dairy . . . but [the report] also outlines some of the sensitivities in other product areas such as beef and rice," he said.
As a result, Brazil and other Mercosur countries needed to readjust their expectations about how much beef they will be permitted to export into Europe, he warned.
The EU launched negotiations with the Mercosur bloc in May 2010 but Irish farmers have expressed concerns that the Irish beef sector could be adversely affected by any trade deal with South American exporters, such as Brazil and Argentina, which are big beef producers.
Speaking in Brussels following a meeting of EU agriculture ministers on Tuesday, Minister for Agriculture Michael Creed said that the report vindicated Ireland's concerns.
“The message from Ireland is that the beef sector is no longer prepared to be the sweetener for trade deals, particularly for Mercosur. We are the biggest exporter of beef in the northern hemisphere so we have a particular skin in the game here.”
The report found that EU beef imports could increase by 146,000 tonnes under the most conservative scenario, rising to 356,000 tonnes under the most ambitious scenario outlined by the study.
The commission declined to put a figure on the estimated losses to European beef producers, noting that the terms and scope of the trade deals in most cases were still up for negotiation.
Mr Hogan said the report would give the EU “a lot more ammunition” in terms of future negotiations with the South American countries included in the Mercosur bloc, which will have to lower their expectations in terms of what they are demanding in terms of exports into Europe.
“We expect that the countries that we are trading with and are negotiating with will take into account this particular study in moderating their expectations in terms of what the EU can offer,” he said.
Backlash
The report was commissioned by the commission against the background of a growing public backlash against free trade which manifested itself in the US presidential election and in political debate across Europe.
A much-feted trade agreement between Canada and the EU ran into difficulty earlier last month when the Belgian region of Wallonia refused to endorse the deal. Similarly, doubts are growing about the future of TTIP, the transatlantic trade and investment partnership between the EU and United States, following the election of Donald Trump who has previously questioned the US' commitment to trade deals.
Senior figures in the German and French governments have also questioned the basis of TTIP ahead of national elections next year.
Asked about the specific impact of EU trade deals on Irish farmers, particularly in the context of Britain’s exit from the EU, Mr Hogan said it was vital that Irish exporters diversified their export markets.
Dependence
“Ireland is a very small open economy which requires trade for its survival,” he said, adding that the Irish Government should look at diversifying to other markets across the world. He highlighted in particular the fact that an estimated 150 million people will be entering the middle-income bracket in Asia by 2030, opening up major opportunities, particularly for the dairy sector.
“[The EU] is putting money behind that, in order to ensure that we diversify into 32 other markets across the world,” he said.
This would also help small markets like Ireland to be able to reduce its dependence on a large market like the United Kingdom, particularly if tariffs arise between the EU and the UK as part of a free trade agreement between the two blocs, post-Brexit, he said.
Commission figures show that EU agri-food exports grew by 6 per cent last year to €129 billion, despite the impact of Russian sanctions.
