As Thomas Hubert reportsBeef farmers on ‘red alert’ over Mercosur" target="_blank"> of a red alert among the EU farm organisations’ umbrella body Copa-Cogeca about the prospects of a trade deal between the EU and the South American group of countries that make up Mercosur. This is a trade negotiation that has been running for 20 years and has come close to conclusion before, most recently in December 2017 but fell through when Mercosur couldn’t meet EU ambitions on access for a range of industrial products, dairy and give sufficient recognition to EU PGI labels.

Weakening of the French position on a Mercosur trade deal has to be of particular concern to Irish farmers as France was the only major power in the EU opposed to a deal in the interests of its beef producers.

What is Mercosur?

Mercosur is the umbrella name for a group of South American countries including Brazil, Argentina, Uruguay, Paraguay and Venezuela which has been suspended since 2016. It was established in the early 1990s loosely modelled on the then EEC and while achieving growth in trade between themselves, it remains a loose federation and has never achieved the same unitary purpose that the EU currently does.

Disagreement between members of Mercosur can often be as great as the difference with those they are negotiating with, which is largely why a deal with the EU has never been concluded despite negotiations running since 1999.

Pros and cons of a deal

There is broad support across the EU for a trade deal with Mercosur with the auto and pharmaceutical industries, along with financial services, especially benefiting. It would also be fine for much of agriculture with even some opportunities for the dairy sector.

However, it would be a disaster for beef producers as beef access to the EU is the key demand from the South American side. The Mercosur members are all in the top five net exporters of beef in the world and currently supply over three quarters of all beef imported into the EU.

A deal was close in late 2017, with the EU understood to be willing to give tariff-free access for up 99,000t for beef, though this was never formally offered. This fell a long way short of Mercosur expectations but it was other issues with access for the auto industry and recognition of EU PGIs that were the cause of the breakdown at that time.

Since then, there is a feeling in the EU that Mercosur hasn’t progressed on these areas and, if anything, backtracked on its December 2017 positions. Recently, however, there have been suggestions emerging from the South American side that they have made concessions in this area and suggesting that a deal is now possible.

South American politics

The election of President Bolsonaro in Brazil in October last year adds a further dimension to the negotiations. He was originally in the President Trump style of being protectionist as opposed to free trade inclined and this was a further impediment to a deal taking place. However, recent reports suggest that he is more amenable to trade negotiations with the EU.

In this, he is very much encouraged by his Mercosur partners ahead of Brazil assuming the presidency of Mercosur later this year.

Global politics

The drive by the EU and Mercosur to conclude this trade deal is out of step with current global politics, with the US and China in protection mode as opposed to free trade. There are multiple scientific reports linking expansion in Brazilian beef production and exports to clearing of the Amazon rainforest.

Six hundred European scientists and 300 Brazilian organisations recently signed a petition calling on the EU to look for a sustainable outcome in its trade negotiations with Brazil, referring to the equivalent of more than 300 football fields of forest being cleared in 2011 to supply EU imports of beef and animal feed that year.

Legal base

Despite political noise in the EU, there is no legal base for insisting on this in trade negotiations with Mercosur though approval of deals does require sign-off politically in the council, which is the leaders of member states and the European Parliament to which we elect MEPs this Friday.