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The 11th ministerial council of the WTO closed this week in Buenos Aires on Wednesday with a whimper. Expectations were low for the gathering given the current USA outlook on international trade and the stage was left for the EU and Mercosur to grab the headlines with what would have been a huge free trade deal. It didn’t happen because the EU didn’t consider the Mercosur response to the recent EU offers on beef and sugar to be sufficient.
Similarly, the Mercosur countries were expecting an increased EU offer on beef which wasn’t forthcoming despite huge pressure from some of the EU delegation to get a deal. The Mercosur countries are extremely unhappy with the 70,000t beef offer that was made in the autumn despite strong opposition from 11 EU countries led by France and Ireland.
They have an expectation of an offer in excess of 200,000t carcase weight equivalent (CWT), despite urging from EU Commissioner for Agriculture Phil Hogan that expectations must be realistic. He urges this in light of the cumulative impact assessment carried out by the EU in 2016 which shows that giving further access to Mercosur countries to ship beef at low tariffs to the EU would damage the EU industry.
A further issue with Mercosur is that the EU offered 100,000t back in 2004 and there were rumours around the discussions this week that the 70,000t offer would be increased to 90,000t but this never happened.
Lobby
The EU agriculture lobby mounted a huge operation around the Buenos Aires gathering with Copa, the EU farm organisations umbrella body, and Joe Healy IFA president and livestock chair Angus Woods making the journey to Argentina. Their efforts were rewarded with no deal this time but the issue hasn’t gone away.
Europe remains as keen as ever to do the deal and that means the pressure remains on the EU beef and sugar sectors to give further concessions. Irish farmers have exclusive interest in the level of beef access, while France is Ireland’s strongest ally as they have huge defensive interests in beef and sugar being one of the main producers in the EU.
The EU farm lobby was all over the discussions and the Agriculture Commissioner successfully walked the tightrope between pushing for better access for the EU to Mercosur countries for wine and olive oil while remaining defensive on beef. Mercosur has failed to give sufficient ground on these and therefore the EU has held its ground on beef and sugar access.
However, DG trade are determined to make the deal happen as are several EU countries with industrial, pharmaceutical and services interests. Another round is planned for Brussels early in the new year and the pressure will come on the beef sector again. Another huge defensive effort will be required to make sure beef isn’t sacrificed for BMWs.
Beef for BMWs – Mercusor deal will be on menu for WTO in Buenos Aires
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