The meeting this week between European Commission President Jean Claude Juncker and the US President Donald Trump has been hailed as a major breakthrough but in fact it at most maintains the status quo and avoids “car wars” and maintains access to the EU for soya.

Mercosur

The trade deal that occupied the minds of farmers most over the past year was the negotiation with the Mercosur group of South American countries.

At several points, a deal looked close when the focus was on negotiating access to the EU for beef with a formal offer of 70,000t that was expected to rise to 99,000t at the conclusion of a deal.

Fortunately for Irish and EU beef farmers, the Mercosur group disappointed with their offer on cars, car parts, dairy and recognition of geographic indicators (PGIs) which is a particularly big issue for Mediterranean countries and a deal-breaker for the Italians in the way that beef is for Ireland.

Despite efforts by Mercosur to talk up the closeness of a deal, a lot of work remains to be done and it is expected no real progress will occur until after the elections in Brazil in the autumn.

Argentina assumes the presidency of Mercosur in January and they are expected to bring a level of organisation and focus to the negotiation that has been absent. However, EU Parliamentary elections will take place in May of next year so it is unlikely that anything will be concluded before that.

Australia and New Zealand (NZ)

Both these countries have a serious interest in beef and sheepmeat access to the EU. NZ is already well served with a 228,000 sheepmeat quota which it acquired with the UK joining the EU and this is likely to be apportioned pro rata with use on the UK departure from the EU.

Australia has just 7,000t of quota and will have ambitions on sheep meat as well as beef. While both countries consider themselves as being realistic (unlike Mercosur) in obtaining beef and sheepmeat access, they look at the 45,000t beef quota granted to Canada under the CETA deal as their benchmark.

In a declining EU beef market with the uncertainty of Brexit, this is a level of access beef producers couldn’t countenance. There may be more flexibility on sheepmeat as the EU is a net importer of same. The other barrier to Australia and NZ securing a large quota is the fact that unlike Mercosur, they have relatively little to offer the EU in return so their negotiating position is weaker.

Japan

By far the best ever trade deal negotiated from an Irish agriculture perspective is the deal with Japan which was signed off recently and expected to take effect from next January. Japan, like the EU, has traditionally supported its farmers but is a net importer of most agricultural produce.

The negotiation with Japan came to a hear in the first half of last year when the Japanese were on the rebound from the USA walking away from the Trans Pacific Partnership agreement which had been signed off by President Obama though not ratified by Congress.

This deal is very favourable for beef, reducing tariffs from 38.5% to 9%, but it will be a slow burn as this is phased in over 15 years. Irish dairy and pigmeat are already well established in the Japanese market. Japan is a cheddar and butter buying market and these will have zero tariffs which will be a huge difference from trading with the 29.8% tariff that is currently in place.

Ireland would expect exports of all these products to increase when these tariff changes take place.

Other deals

The EU has concluded negotiations with Singapore and Vietnam, with the latter expected to come into effect later this year. The Singapore deal, which was concluded in 2015, is currently going through the courts to determine if it has to be approved by individual member states or if it can be signed off by the Commission as was intended by the Lisbon Treaty.

Singapore is a well-developed if relatively small Asian market, while Vietnam is expected to be a rapid developer over the next decade and offers huge potential for agri-food exports.

The deal with Canada has been signed off but awaits approval by member states though it is operating provisionally in the meantime. Finally, the deal with the USA – TTIP – is paused and that is unlikely to change even in the aftermath of last week's visit to Washington by Commission President Jean Claude Juncker.

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