The extent to which the farming lobby has hijacked the debate on Mercosur is quite extraordinary. And good luck to them. To use the phrase generally attributed to Roy Keane, “that’s their job”.
But the hyperbole that has built up around the deal is giving a completely false impression of the pluses and minuses for Ireland, and has been crucial in the Coalition’s decision to vote No. And it ignores the crucially changed international political context applying to a small trading nation. Ireland – which positions itself as a champion of free trade – is one of just five EU countries opposing the deal that will now be approved by a qualified majority of member states. It still requires approval by the European Parliament.
The level of overstatement was perhaps best exemplified by Sinn Féin spokesman Martin Kenny, who told RTÉ that the Mercosur deal was “very, very devastating for everybody across the globe and particularly here in Ireland”. Farmers have painted a picture of tumbling beef prices and unsafe product entering the Irish market. In reality, the amount of South American beef entering the EU market will be capped, will still be subject to a 7.5 per cent tariff, or import tax, and safeguards and compensation packages have been negotiated.
There has been argument back and forth about the extent of these safeguards. Opposition by Ireland, France and others has secured concessions and compensation. And there will still be some challenges for the beef sector, for sure. However, an independent study written for the Department of Trade in 2021 said these would be contained. There were similar warnings before the Ceta [Comprehensive Economic Trade Agreement] pact with Canada came into force in 2019 but in the event, little Canadian beef came to Ireland and instead it provided a nice new market for Irish processors. And remember that the biggest market for Irish beef is the UK.
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What is missing entirely from the Irish debate is two things. One is that the balance of advantage for Ireland, as a small exporting nation, is for trade to be as free as possible. Among the likely winners from Mercosur would be sectors such as dairy, grain – from higher spirits exports – pharma and services. Ireland should fight for its farmers, for sure, but should vote based on its wider economic interests. And this means the deal should be supported.
And the second thing missing from the debate is the wider context. US president Donald Trump is threatening world trade and trying to make it more difficult to sell into the US market. Further tensions certainly lie ahead here. For this reason, opening up other markets elsewhere is doubly important for the European Union.
Why Ireland is under pressure in a battle over European trade
The Government has completely failed to make these points in favour of the agreement and has not presented the debate in the context of a wider trade agenda. And so it ends up backed into a corner. That Ireland, which should be one of Europe’s trade champions, is now positioning itself with the awkward squad on this issue – voting against it alongside France, Poland, Hungary and Austria - shows how all politics really is local. As one source put it, the Government doesn’t much care what the rest of the EU thinks, or at least nothing like as much as it cares what the electorate of Galway West make of it all.
Will it cost Ireland in terms of support from other EU members in future, as they gave us so strongly during Brexit? Quite possibly, though how and when we simply don’t know. And in the political calculus, a current cost always trumps a future potential risk.
Opposition claims that the Government somehow failed to stop Mercosur in its tracks are ludicrous. And the watery reasoning given by Taoiseach Micheál Martin and Tánaiste Simon Harris for voting No – that they believed sufficient safeguards have not been put in place – look like a cover story. The Rural Independents and Minister of State for Agriculture Michael Healy-Rae called their bluff and they caved.
The farming lobby cleverly used its leverage with the Independents and its expertise in managing the news agenda. Its representatives spoke in headlines and soundbites. In contrast, there was little noise on the other side of the debate and few voices out in support. Ibec, the business lobby, said in a recent document that “the EU-Mercosur FTA (free-trade agreement) offers significant trade opportunities in a range of industrial sectors”, though it added that the concerns of the agricultural sector needed to be taken into account. But it has not been out batting for the agreement and one of its industry bodies, the Meat Industry Association, welcomed the Government’s decision to vote No.
Chambers Ireland, the body representing the Chambers of Commerce, has supported the deal, as did Fianna Fáil MEP Barry Andrews in recent days, who pointed to the sectors that would gain and said he would support it. That said, a deal may still struggle to get through the European Parliament.
The Irish debate is a classic example of a situation where one group – the farmers and beef processors – fear significant losses but other sectors, while they will gain, do not feel strongly enough to put their head above the parapet. The gains would not be enormous and nor would the losses. It is a free trade deal, not some kind of big economic transformation. But with Trump pulling the world in the other direction, it is clearly in our interest to be on the side of the fence promoting free trade and looking at places where new markets can be developed.
A senior Government politician had it spot on when he spoke at an Ibec event last year. He said free trade and the investment it led to “is the only credible way for us to provide the jobs and investment our people rely on”. He added: “In spite of this, there are many in our political sphere who remain viscerally opposed to trade and who celebrate every action that delays new trade agreements.
“I want to make it very clear that my Government will always be pro-trade ... Where new trade agreements are available and are balanced, then it is in Ireland’s interest to ratify them as quickly as possible.”
The politician in question was, of course, the Taoiseach. Along with the Tánaiste, he has hidden behind the concerns about imports and product standards. But we all know what this is really about. Keeping the Coalition together and trying to avoid getting trounced in the byelections.
