Speaking exclusively to the Irish Farmers Journal in Brussels this week, European Commissioner for Agriculture and Rural Development Phil Hogan sought to assure farmers that the Mercosur trade deal would not wipe out the Irish beef industry.
This is despite the EU granting the South American countries that make up Mercosur: Brazil, Argentina, Uruguay and Paraguay, access for 99,000t of beef carcase weight equivalent (cwe) to the EU market at a preferential tariff of 7.5%. This is in addition to reducing the tariff on the 66,000t Hilton quota from 20% at present to zero. The EU has also granted an 180,000t quota for tariff-free poultry meat.
Hogan began by explaining the process of approval. It would take three to four years before the agreement would begin the process of being implemented, taking five years to complete.
This includes the “legal scrubbing” process before proceeding to the trade policy committee, where a qualified majority of 55% of member states representing 65% of the EU population is required.
The final step is securing the European Parliament’s approval and while member states’ forums are consulted, including the Dáil and Seanad, they can relay their views but don’t have a veto.
Commissioner Hogan welcomed the Taoiseach’s announcement that he would have an economic appraisal conducted which means that the Dáil and Seanad would be “making it [the decision] on the basis of real facts”.
Between the approval process and the five-year implementation process, Commissioner Hogan said it would be 2028 before the deal that was agreed at a political level last Friday comes into effect.
Impact of the deal
When the Irish Farmers Journal put it to him that the EU carried out an appraisal two years ago and it highlighted that beef was negatively affected by the prospect of a Mercosur deal, he said the Commission “will do another assessment in 2020”. However, it would include deals with “positive aspects for the beef sector” including the deals with Japan, Mexico and the opening of the Chinese and South Korean markets.
He emphasised that the positive impact of these deals for beef had to be taken into account while recognising that the 99,000t to Mercosur was a concession.
Hogan did not see this as an add-on to the existing Hilton quota of 47,000t product weight, which equals 66,000t cwe, though he did recognise that the tariff on beef imported under it would drop from 20% to zero.
When pressed by the Irish Farmers Journal on the makeup of the Mercosur quotas, he confirmed there were no restrictions on the type of beef that could be exported to the EU, other than a split in the quota between 55% fresh beef and 45% frozen beef.
He also said that there was a safeguard mechanism whereby “if there was a dramatic increase in imports of any particular type of product, we can invoke a safeguard mechanism to stop importation continuing for a period of time”. He said this had been used to curtail imports of rice from Cambodia recently at the behest of Italy.
On the thorny issue of food standards, Commissioner Hogan was adamant that no imports from Mercosur would enter the EU unless it “complies 100% with EU standards and that by insisting on the EU’s strict sanitary standards, we are actually improving the food safety standards in Mercosur countries”.
The Irish Farmers Journal pressed the Commissioner on the issue of the EU registering calves within 28 days whereas the Mercosur countries could register cattle within 90 days of processing and have them eligible for export to the EU. Commissioner Hogan rejected this, repeating that “no product would enter the EU market unless it complies 100% with EU standards”.
On the issue of managing the quota access, Hogan highlighted that the “TRQ management structure is going to be policed and licences issued at the point of import”. He saw the EU taking control of the administration as a further safeguard and went on to point out that the South American focus was the Chinese market in addition to its own huge domestic markets, with the EU being a lesser priority.
Given the “onerous” EU standards, Hogan said: “Contrary to the worries that people can understandably have in relation to any volume of product coming in, certainly I think that the target audience for the Brazilian beef farmer is China rather than the EU.”
When challenged on the environmental and climate credentials of Mercosur, Brazil in particular, Commissioner Hogan was adamant that if “president Bolsonaro wants to follow president Trump out of the [Paris] climate agreement, this deal fails”. On the issue of recent deforestation in Brazil, he responded that the agreement includes a binding commitment to the Paris agreement, including, by 2030, zero illegal deforestation and restoring and planting 12m hectares at 1m hectares annually.
This, Commissioner Hogan said, was a specific condition of the Mercosur deal.
When this paper pointed out recent comments by President Bolsonaro and referred to the clearance of an area the size of Co Leitrim in May this year, the commissioner reiterated that the current deforestation trend in Brazil was “totally unacceptable”.
If it is not reversed, “the deal is dead,” he added.
The Irish Farmers Journal put it to the commissioner that the timing of this deal couldn’t be worse for farmers with the threat of a no-deal Brexit and the anti-meat campaigns in the EU. He rejected this, saying that now was in fact the right time because if the UK left with no deal and the EU did not have a deal in place with Mercosur there would be no influence on standards.
Now with the deal in place with Mercosur based on EU standards, the EU will insist any future trade deal between the EU and UK will also be on EU standards and therefore everyone will be operating to the same EU standard.
He said setting the standards to the EU level would protect Irish and EU exports to the UK. This would provide a level pitch on standards between this Mercosur deal and any future free trade agreement with the UK.