The Mercosur trade deal will cost Irish beef farmers between €44m and €55m annually as EU beef imports are forecast to increase by 53,000t, the Government’s economic impact assessment of the deal shows. This is a 25% increase on current EU imports from Mercosur countries.
The biggest impact for Irish beef will be felt in the sale of high-end cuts (steak meat) where the price is forecast to fall by 5% (3.3% to 7.2%). With a fall in EU beef production forecast at 1.5%, this would increase to a fall of 6.3%.
The assessment concludes that there will be minimal impact on the Irish dairy sector.
While Irish beef farmers will be the clear losers according to the impact assessment, overall the Irish economy will benefit with exports to Mercosur countries forecast to increase by €1.246bn by 2035. The biggest winners will be found in electrical equipment and machinery (1.6% increase) and computer, electronics and optical products (1.2% increase).
These findings are the latest blow to Irish beef producers when it comes to international trade
However, due to its huge economic size in the Irish economy, the 0.6% increase in Irish exports of chemicals – including pharmaceuticals – would mean an increase in exports of €953m.
The findings in the Irish Government impact assessment are broadly in line with an earlier assessment carried out by the EU which also pointed out that the wider economy benefits from a Mercosur deal with the exception of the beef sector.
These findings are the latest blow to Irish beef producers when it comes to international trade.
The Mercosur deal was concluded before the future EU -UK trade relationship was agreed and the minimal nature of that agreement has resulted in the UK adopting an open door policy on beef imports.
The recent UK deal with Australia plus other deals that are in the pipeline will squeeze Irish beef prices further than the level identified by Government in its Mercosur impact assessment.