Following the opening round of discussion on the EU-Mercosur trade agreement, which concluded on Wednesday, 3 July 2019, we proceed to the second round of the debate, which consists of questions and answers. Fianna Fáil has 15 minutes for the interaction on its questions.
EU-Mercosur Trade Agreement: Statements (Resumed)
Fianna Fáil is very much a pro-trade party as we demonstrated most recently in our support for the Canadian and Japanese trade deals. As a small, open island economy, we depend on our openness to trade, without which we would not survive. However, it is important that we trade with countries which apply the same standards and regulatory requirements as we do. As part of the EU-Mercosur trade agreement, however, we are now proposing to deal with a country that clears an area of the Amazon rainforest the size of a football pitch every hour of every day. What does that say about the environment? When it comes to beef, it is a country with no database or traceability and in which growth promoters are widely available. However, I will leave that matter to my colleague, the Fianna Fáil spokesperson on agriculture.
I would appreciate if the Minister for Business, Enterprise and Innovation could be tight in reply to the following specific questions. In reply to a parliamentary question I submitted last week, the Minister confirmed that as negotiations proceeded, member states were consulted on an ongoing basis. What was the level of consultation the Minister and her colleague, the Minister for Agriculture, Food and the Marine, Deputy Creed, had with the Commission? At any stage during the recent discussions on the €50 million to help Irish beef farmers, did it raise its head that 99,000 tonnes of beef would be coming into the EU? Given the recent positive focus on the environment in Ireland and at EU level, did the Government question or raise concerns about the abuse of the tropical Amazonian rainforest and the impact of its deforestation on the global environment? The Government spoke last year about the appointment of a trade modelling firm of Copenhagen economists to carry out an assessment of the EU-Mercosur agreement. That assessment is to be updated in light of the new draft proposals. When can we expect the economic assessment to be published? When can we expect the environmental assessment to be published? It is worth noting that there is significant economic potential from the perspective of our pharmaceutical sector, which accounts for 55% of our exports, and IT and software, in which sector we are the second largest producer in the world.
My final question relates to the report of the National Competitiveness Council which was launched in April 2019. According to the executive summary of the report, if prices in Ireland are too high relative to productivity, it damages Ireland's competitiveness, making it more difficult for Irish businesses to export. The summary further states that the evidence is clear that Ireland is a high-cost economy. In 2017, Ireland was the fifth most expensive economy in the EU and prices were 13% higher than the EU average. What is the Minister doing to tackle high costs for businesses in Ireland? The Government is talking about promoting a trade deal, but it will be very difficult to trade with any country when we are coming from a base of such high utilities costs, costs of credit and business services and input costs.
On the first opportunity I have had to do so, I congratulate Deputy Troy on his appointment as spokesman on business, enterprise and innovation. The Deputy has raised a number of questions and I will try to address them. I appreciate fully and recognise the concerns of beef farmers on this deal. It is important to remember that the deal has been negotiated at EU level where the Government has consistently raised serious concerns in relation to beef access over a long period. I raised the matter at every opportunity at European Trade Council meetings as well as directly with the trade Commissioner, Ms Cecilia Malmström. As recently as 31 May 2019, I wrote to the Commissioner to highlight once again Ireland's concerns in relation to beef. The Minister for Agriculture, Food and the Marine, Deputy Creed, raised the matter with his EU counterparts also and the Taoiseach joined with a number of other EU Heads of Government from France, Poland and Belgium to express our concerns to President Juncker.
The Government has sought in every way to achieve the best possible deal for our farmers. It is important to remember that the Mercosur countries were looking initially for a beef quota of 300,000 tonnes whereas the draft agreement provides for a quota of 99,000 tonnes. While that is still a higher volume than we want, it is less than a third of what was originally sought. The quota is also split between fresh and frozen product and will be phased in over a period of six years from the date of finalisation of the agreement in its legal form, which is likely to be two years from now.
I know that other figures were mentioned. There was an historic offer at one time. I understand that in 2004, an offer of 130,000 tonnes was on the table from the EU. In 2004, the Commission offered 130,000 tonnes. Now it is down to 99,000 tonnes. The Government acknowledges that the agreement on beef access that has been reached provides for more imports than we would have wished. However, the level of access that has been agreed is far less than Mercosur was looking for. As Deputies will be aware, it was looking for 300,000 tonnes.
With due respect, I do not have much time left and I would like the Minister to address the other matters I raised.
Does the Deputy want me to answer the question about competitiveness?
I want the Minister to answer the questions I asked about competitiveness, the environment and the economic assessment.
Very well. According to the IMD world competitiveness ranking, Ireland is the third most competitive country in the EU. As the Deputy knows, there has been a great deal of investment through Enterprise Ireland that encourages companies to invest in innovation and to look at new ways of doing things. This Friday, I will attend a seminar on how we can increase productivity in our small and medium-sized enterprises and how to make them more competitive. The Deputy is welcome to come to the seminar, which is the third pillar of a whole-of-Government initiative, Future Jobs Ireland, the aim of which is to future-proof this economy to ensure we do not repeat the mistakes of the past.
A number of climate change and sustainability safeguards are built into the agreement, as outlined. The detailed chapter in the agreement on sustainable development goals recognises the need to address the urgent threat of climate change and the role of trade in that regard. It also underscores how important it is for both parties to implement the provisions of the Paris Agreement and emphasises the development of trade between Europe and South America as regions in a way that is conducive to decent work for everyone, including women and young people. Each party recognises the importance of core labour standards, as defined by International Labour Organization conventions.
My party has always been pro-trade. We will continue to be in favour of the positive impact that trade deals can have. It is important that every trade deal is balanced and fair across the various countries. Ireland is the largest beef exporter in the EU and the fifth largest beef exporter in the world. The beef, poultry and pigmeat sectors, and agriculture in general, are being asked to carry the burden of this deal in order that other sectors of the economy can benefit. From an Irish point of view, this deal is not well-weighted, fair or in our interests. The Government has failed politically, particularly when one considers that the EU Commissioner for Agriculture and Rural Development is an Irishman. He has overseen the drawing up of a deal that will result in 99,000 tonnes of beef, 180,000 tonnes of poultry and 25,000 tonnes of pigmeat being imported into the EU. We know that 55% of the 99,000 tonnes of beef that will be imported will be frozen beef and 45% of it will be fresh beef. Will the Ministers, Deputies Humphreys and Creed, confirm that the 99,000 tonnes of beef can be made up of steak cuts? The Hilton quota of 47,000 tonnes previously attracted a tariff rate of 20%. Under this agreement, it will attract a tariff rate of 0%. Can the Ministers confirm when it is intended that the 47,000 tonnes in question will drop to the 0% rate, if this deal goes through?
I would like to be associated with the good wishes that have been extended to Deputy Troy. It is important that we do not fall into the trap of talking about this as if it is a done deal. As I have said previously, the heads of an agreement have been negotiated by the outgoing Trade Commissioner and agreed by the outgoing Commission, but have not been approved by the Council of Ministers, the European Parliament, a single member state or a single member state government. I would like to respond to the opening remarks of both Deputies. I acknowledge their commitment to trade agreements as a key that open doors for us on a global stage. We must ensure our defensive interests are protected in any trade agreement. The proposal to allow 99,000 tonnes of beef to be imported is of clear concern in that context.
I have asked two specific questions. They relate to steak cuts and the Hilton quota. I ask the Minister to answer them because I have a very limited amount of time available to me.
I will. The Deputy is presenting this as a done deal, whereas I see it as a job of work to be addressed. As the Minister, Deputy Humphreys, has said, we have been deeply engaged on all of these matters with our counterparts in the Council of Ministers. I have engaged directly with Commissioner Hogan on several occasions. The Deputy has asked a specific question about quota segmentation. The draft proposal refers to carcass weight equivalent. This gives us an opportunity to shape the ultimate final deal. I think carcass weight equivalent, and appropriate segmentation thereof, gives us an opportunity to influence the legal text that will be made available for agreement to ensure-----
The two issues I have asked about are steak cuts and the Hilton quota.
In my view, carcass weight equivalent is a carcass. It is not all steak cuts. As I see it, the only segmentation that is envisaged in the context of carcass weight equivalent is the 55:45 split between fresh beef and frozen beef. I believe a carcass is all of the carcass. We must ensure the detailed legal expression of carcass weight equivalent-----
I ask the Minister to answer my question about the Hilton quota.
-----is structured in a way that enables us to ensure it is not all accounted for by steak cuts but is the equivalent steak cut of any individual carcass. Otherwise, the detail will be to our significant disadvantage. That challenge is there for all of us. The Deputy has access to his colleagues at European level. Commissioner Malmström is a member of ALDE, to which Fianna Fáil is aligned. We will work collaboratively where we can-----
I have not got an answer to my question on the Hilton quota.
We have only a minute left.
The Deputy's first question related specifically to segmentation and steak cuts. I believe that in the context of carcass weight equivalent, we will have an opportunity to influence the legal text. This is not a done deal. There is a job of work to be done. In that context, I imagine we will work with the Food and Veterinary Office, the European Food Safety Authority and like-minded member states.
What about the Hilton quota?
The Hilton quota, as envisaged, sees-----
When will it come in?
The agreement is subject to ratification. No agreement comes in until the ratification process has been completed.
What is that process?
The ratification process is a complex system. As I understand it, in the first instance it involves approval by the Council of Ministers in qualified majority. Depending on what the Commission presents thereafter, and on whether there is a provisional application of this agreement, it may require approval by the European Parliament and there may be subsequent involvement on the part of member states.
I will allow Deputy McConalogue to ask a quick final question.
I asked the Minister two specific questions, the first of which related to steak cuts. Representatives of the IFA are in the Gallery tonight. The IFA and other farming organisations are exceptionally concerned about this proposal, as are farmers across the country. I asked the Minister specifically about steak cuts. Commissioner Hogan said during the week that there will be steak cuts.
The Minister is trying to fudge the issue by giving the impression that this is about the whole carcass weight. Commissioner Hogan said there will be steak cuts. I asked the Minister when the new rate will apply to the 47,000-tonne Hilton quota, but again I did not get an answer from him. He said it is up for negotiation, it is not quite clear and it will depend on when it actually happens. We are getting mixed messages from the Government about how the process will be agreed. Unfortunately, it is all at sea on this issue. The approach being taken by the Minister, Deputy Creed, is different from the approach being taken by the other Minister, Deputy Humphreys, and indeed the Taoiseach.
I have to let the Minister in.
The reality is that a political deal has been done with regard to 99,000 tonnes of beef.
If the Deputy does not conclude, he will not get an answer.
The horse has bolted from the stable.
There will be no answer.
The Minister is trying to tell us that all of this is still up for grabs, but the reality is that there has been a political failure up to this point.
If the Deputy wants an answer-----
We need to see the Minister trying to retrieve the situation-----
-----and batting for the interests of the country.
All Deputies should understand that if they are going to ask questions, they must leave time for answers, regardless of whether they like those answers. I think the House would want me to give the Minister a minute to answer the specific questions that have been asked. I will be reasonable with everyone.
The text of what has been put in front of the member states talks about carcass weight equivalent.
The opportunity presents itself in the context of giving legal effect to that headline agreement to influence carcass weight equivalent. I consider carcass weight equivalent to be the carcass, not just all prime cuts. The only segmentation alluded to is the 45%:55% split between fresh and frozen. When a deal talks about carcass weight equivalent, I believe there is an opportunity to make sure it is just that - all of the carcass and not the equivalent of the weight of the carcass in prime cuts. It is incumbent on all of us to work on this opportunity. Fianna Fáil has access through the trade Commissioner Malmström, who is a member of the European party of which Fianna Fáil is a member, to influence that. I do not know what contact Fianna Fáil has had with her up to now, if any, but if we can work together in the context-----
What contact has the Government had with Commissioner Hogan?
The Ministers will be here for two hours so I am sure they will get the opportunity to deal with that as the question comes up time and time again.
There are significant concerns about this deal. Beef farmers are caught in a bind given the way factories have manipulated the situation. Some of that has been highlighted recently through news of beef barons who do not even pay tax while the rest of us must. Beef farmers will be caught by Brexit. We have little control over those issues. Our Government has shown itself to be very ineffectual in respect of the way factories have been operating. With Brexit, it is a case of wait and see and trying to mitigate the damage it will cause. We are all on board with that.
The Mercosur trade deal has been in the making for 20 years and the Minister said it is not a done deal. It had better not be a done deal because farmers in my part of the country experienced the sellout of the sugar beet industry under previous Governments due to international trade deals. Is the beef industry going to go the same way? The truth, which the Minister knows as well as I do, is that beef farmers are hanging on by their fingertips.
I will focus on economic, environmental and human rights issues. Regarding environmental matters, we know what is happening in those countries. We have signed up to the Paris Agreement. The EU and the Government are talking out of both sides of their mouths if they sign up to this deal as it is. We cannot say we are going to reduce greenhouse gas emissions and import beef from the far side of the world. It is the same as shifting ice to the North Pole where they do not need it. We use only 10% of what we produce. A total of 90% is exported and that is good and must continue. How will the EU police what is happening in Brazil where criminal gangs are clearing people off lands to make way for beef barons to take over? How will the environmental standards in Brazil be policed when the few that exist are totally ignored?
I read Commissioner Hogan's article in The Irish Times last Friday where he briefly mentioned labour and environmental protection but did not go on to say how these would be protected. Brazil's president is one of the most authoritarian and right-wing people in the world. How will the workers in the beef industry and farm workers be protected? They will not be protected because there is no means of protecting them and we are adding to their exploitation by facilitating this so I want the Minister to address this issue. Has she put this to the European Commission and colleagues in Europe regarding the protection of the environment in South America and the rainforest and the protection of agricultural workers, including those in the beef producing countries? Those workers have no protection whatsoever and if we allow this deal to go through, matters will get even worse. Could the Minister address those issues? We have signed up to the Paris Agreement and are asking farmers in this country to reduce greenhouse gas emissions. This House has rightly declared a climate emergency but we cannot do that and engage in deals such as this, which will cause problems and create even more emissions.
Regarding labour conditions, the parties to the agreement agree that there should be no lowering of labour or environmental standards to attract trade and investment.
They are on the floor.
They also agree that the trade agreement should not constrain the right to regulate on environmental or labour matters, including in situations where scientific information is not conclusive. The parties commit to respecting International Labour Organization, ILO, conventions on forced labour, non-discrimination at work, child labour, freedom of association and the right to collective bargaining. In addition, there are commitments on health and safety at work and labour inspection. All Mercosur countries have legislation that provides for the protection of labour rights and have ratified international labour standards, including all eight fundamental ILO conventions, with the exception of one in the case of Brazil due to constitutional constraints.
The trade and sustainable development part of the agreement is subject to a specific dispute settlement procedure. If the EU or Mercosur considers that the other side is not playing by the rules, it can ask for formal government consultations. If the situation is not resolved, an independent panel of experts can be asked to examine the matter and draw up a report with recommendations. The report and recommendations must be made public so that they can be followed up by stakeholders as well by the relevant institutions on both sides.
The agreement will promote the effective implementation of several multilateral environmental agreements signed by the EU and Mercosur such as the Paris Agreement and the Convention on International Trade in Endangered Species of Wild Fauna and Flora, which imposes a licensing system to authorise all imports and exports of species to which it applies. The EU and Mercosur commit to effectively implementing the Paris climate agreement and co-operating on the climate aspects of trade between the two sides. For example, the Paris Agreement includes a pledge by Brazil to reduce its net greenhouse gas emissions by 37% by 2025 compared to 2005 levels, action to stop illegal deforestation, including in the Brazilian Amazon, and reforestation of 12 million ha along with a pledge by the EU to reduce its domestic emissions by at least 40% by 2030. If the two sides do not comply with those requirements, the deal is void.
The Minister said that the Mercosur countries must meet criteria similar to those farmers in Europe must meet. She comes from a farming community. We are all aware that traceability is paramount. When the animal is born, he or she is tagged for life. This has not been the case in Mercosur countries up to now but we are expecting that this will change overnight. If it does, how will it be inspected? How will we be sure that this will be the case? What guarantee is there that this will happen?
With regard to the management of disease, which is a serious issue, there are ranchers with tens of thousands of cattle roaming freely. In Ireland, most farmers know their cattle almost by walking up and petting them. The situation here is entirely different. How will disease be managed and how will we know it is managed? It is legal to use growth hormones in Mercosur countries. I understand that they will not be allowed under this agreement. How will we know they are not being allowed if cattle are not tagged or traced? If nobody can have access to them to know where they are, how will we know that growth hormones are not being used? By virtue of the scale at which they farm, disease control in Mercosur countries involves mass disease prevention where medicines are put into the food animals eat and all animals are medicated at once. It will be impossible to monitor any of these farms at this distance.
Frankly, it is absurd to expect farmers in Ireland who are aware of the criteria they must meet to satisfy EU regulations to believe that somehow or other, this will happen in Brazil and Argentina. It is outrageous to think this will happen. Will inspectors from the EU be in the factories in Brazil and Argentina in the same way they are in Ireland? Will inspectors inspect the farms over there as they do in Ireland and other European countries? How will they be inspected? Are we expected to trust governments, particularly the government in Brazil, which says that it does not believe climate change is a reality, is opposed to the Paris Agreement and has clearly stated its preference for expanding its beef herd?
Brazil is only interested in stacking them high and selling them cheap and we are buying into this. It flies in the face of everything the European Union and the Council of Ministers have set out in climate change regulations for Irish farmers.
I share the Deputy’s concerns about the apparent lack of a level playing pitch. Most Irish farmers with whom I engage say they will take on competition from anywhere, as long as the playing pitch is level and we are comparing like with like. In that context, we need only recall the 2017 Brazilian meat scandal, the "carne fraca" scandal, with which I am sure the Deputy is familiar. This gives rise to legitimate cause for concern. Given that particular Brazilian exposure to shoddy practice, there is an opportunity for us in the context of a deal on outline arrangements to do with standards and environmental issues. Apart from the meat scandal, we know also about the disregard for environmental conditions and the attitude of the current Brazilian Administration to the broader climate change agenda. Accordingly, in many ways, we have been presented with an opportunity which we need to maximise. It is on the basis that we stitch in absolute conditionality about market access. We must negotiate to ensure there will not be access to our market, except if we are absolutely sure it meets our standards.
As part of our access to the Chinese beef market, Chinese inspectors will be coming here in August to inspect additional plants which are awaiting approval. We need to engage with the European Commission’s Food and Veterinary Office, FVO, which is based in Grange, County Meath and the European Food Safety Authority, EFSA, to ensure that, in the time before the document takes legal effect, we will guarantee that European consumers will be protected from any substandard product entering the market. We must also ensure the terms and conditions on which the product seeks access are the same as for the use of veterinary medicines, including being hormone-free, traceable etc.
Therein lies the opportunity to level the playing pitch. We know from experience that there are different production systems. If they want access to our market, they have to comply. There is the opportunity in the intervening period to allow us to stitch in the conditionality to make sure it is absolutely watertight. We can ensure the conditions which I hope they will struggle to meet will thwart their ambition to deliver the 99,000 tonnes. That is the challenge for all of us in the intervening period. What we have is a headline agreement. What is imperative is that in the intervening period, whether it be on quota segmentation, in the environmental chapter or phytosanitary issues, we use every lever we have at our disposal to make sure the competition, if it is to arrive, will be fair.
Once again, beef farmers are being crucified by the actions of the people we send to represent us in Brussels. The European Commissioner, Phil Hogan, when he was a Minister, was the architect of the disastrous water charges problem which mobilised tens of thousands of people in opposition to them at the time. Now in the European Union he is one of the architects of this deal which will be a disaster for Irish beef farmers. The beef farmer is the lifeline in many of the poorest parts of rural Ireland. If the deal goes through, it will be a further nail in the coffin of a part of rural Ireland. I am fortunate to know many people involved in the beef sector in my county, particularly south Kerry, who survive because of it. Many of the people who are left there manage to survive on the little income they earn from it. I do not think the Government realises what the consequences will be if the deal goes through. The European Commissioner certainly does not realise them. It will be a huge disaster for the rural economy.
We are told reliably that in Brazil an area of rainforest, roughly the size of two football pitches, is cleared every minute. There are also human rights issues associated with this as indigenous peoples in these areas are the victims of human rights abuses. The European Union and the Government are as responsible as the people who are cutting down the forests and driving indigenous populations from their environments, many to their deaths.
I remember being at several of the European debates across the country when we were told how our veto on the deal would be protected.
I must ask the Deputy to conclude if we want the Minister to reply.
I just need a minute. Does the Government have a veto on the deal? Is it prepared to stand up and demand a veto to stop the deal going through? It will take courage and balls to take it on. I hope the Minister and the Government will have the courage of their convictions.
It must be remembered that it is only an agreement in principle. It still has to go through a legal refinement process which could take up to two years. It will have to be voted through by a qualified majority at the Trade Council and also go through the European Parliament. On top of this, the EU-Mercosur agreement will be a mixed agreement which will require the involvement of the Dáil in the ratification process. Like any deal, nothing is agreed until everything is agreed. Even if the agreement does come through that lengthy process, it is important to remember that the 99,000 tonnes quota will only be brought in on a phased basis over six years. It could be possibly eight years before the full impact is felt. There is a long way to go. The agreement will provide a solid framework to address human rights issues, including for indigenous peoples.
Twenty years ago there was a vision of a genuine partnership between the peoples of South America and Europe. What was intended was a mutually beneficial partnership which would assist both Europe and the Mercosur countries to continue their economic development. What we have been presented with in the draft is mostly a free trade agreement. There is mention of social and environmental protection, but there is scant detail. That is not what the people of either continent deserve.
Trade union representatives in both Europe and South America have been blocked from getting information on the deal. I spoke to representatives of the European trade union movement today. They have not been intrinsically involved in the deal’s negotiation. What happened to the plan to have a genuine development partnership between Europe and South America? Why have we been presented with a trade agreement in which there is little mention of social and environmental protection? The Minister for Business, Enterprise and Innovation, Deputy Humphreys, has repeated phrases from the European Commission that there will be environmental protection and that it will enforce International Labour Organization, ILO, rules to eliminate child exploitation and forced labour. What mechanisms will be in place to enforce protection of the environment, including rainforests, as well as the measures to prevent the exploitation of workers and child labour?
There is a clear dispute resolution mechanism that will be included in the deal. Again, it will be part of the legal agreements.
Will the Minister set it out?
There is a complete chapter on sustainable development, which means that there is a big focus on it.
I asked the Minister about enforcement
Either of the parties may resort to the trade dispute settlement mechanism. If one party considers that the other has failed to comply with one or more obligations in the trade part of the agreement, as a first step in the process, consultation will allow for an amicable resolution of the dispute. If the consultation fails, the complaining party may request the establishment of an arbitration panel composed of three arbitrators with expertise and experience in law and international trade.
There is a trade dispute settlement mechanism there.
That does not fill me with confidence. We will arbitrate with President Bolsonaro, a man who is a climate change denier and one of the most right-wing dictators and leaders in the world. Our Constitution is carefully balanced to ensure that the balance of power between the Government of the day, the Parliament and the law courts is maintained. The courts have traditionally encouraged private individuals and businesses to seek amicable solutions to disagreements, including where there are commercial disputes. That is why businesses can rely on the rule of law in this State. At the same time, the Constitution ensures the primacy of the democratically elected Dáil and Government, balanced by an independent Judiciary. There is a serious problem with free trade deals that attempt to undermine this democratic balance and established legal order by creating entirely separate dispute resolution mechanisms that would go beyond the democratic control of this Parliament or of our democratically elected Government. What is the dispute resolution mechanism in this agreement? How will it stand in respect of the rule of law and the democratic primacy of this Parliament in disputes such as those I have addressed above?
On sustainable development, all EU free trade agreements include a trade and sustainable development chapter, which seeks to ensure that partners follow international requirements in the three pillars that comprise sustainable development, namely economics, the environment and social issues. By linking the benefits of enhanced market access to commitments to follow international labour and environmental standards and agreements, these provisions seek to maximise the leverage of increased trade and investment on issues such as decent work, environmental protection and the fight against climate change in-----
That is nothing but words.
No, it is not just words.
It is just words-----
No, I do not agree with the Deputy.
-----if there is no mechanism to enforce them.
Let me finish. On 27 February, EU Commissioner Malmström unveiled a 15 point plan to make the EU trade and sustainable development chapters more effective. Contained in this plan was a commitment to more assertively enforce the commitments under the trade and sustainable development chapters in free trade agreements. Our engagements allow us to influence the Brazilians and others on human rights and so on. If we do not engage, we will not influence.
My question is simple. What is the mechanism to do these things? The Minister keeps repeating what she intends. She says that we will have rigorous enforcement and we will have all this leverage. The simple question I have asked twice is how will we have this and how will that sit with the democratic rights of this Parliament and the elected Government of Ireland.
I have listened to the responses of both Ministers so far. Although there is more of a convergence in recent minutes, in the beginning the Minister for Business, Enterprise and Innovation, Deputy Humphreys, was defending all aspects of the agreement, saying that the agreement was hard worked out and she defended every letter of it and then the Minister for Agriculture, Food and the Marine, Deputy Creed, said-----
The Deputy was not here for the start of the debate.
I was here for every second of it and the Minister for Agriculture, Food and the Marine was saying not to worry, that the agreement was only a draft that has only been 20 years in the making and there is no reason any of the detail would be important. Even a draft agreement does not emerge after 20 years of rigorous economic analysis without the Government presumably knowing what each item in it means. A Fianna Fáil colleague asked a simple question about carcass weight equivalents. What is the legal view of that? Surely the Government knew that when the agreement was presented by the Commission and surely that question was asked. What does that mean in legal terms? We should not wait for the next two years to work that out.
Economists and trade specialists have presumably pored over the details of the trade patterns, export trends and the likely impacts of adding new suppliers and new consumers to the European market. Some 20 years have elapsed in the negotiations so presumably that has been done in some detail. Can the Minister outline the cost-benefit analysis and the complete economic analysis that has been done? The Copenhagen Economics research has been instanced but we have not seen it. What has been done to date? What will be the specific impact on Ireland, disaggregated from the rest of the European impact, and when will we see that? What do the reports tell us about the balance of gains and losses for our economy, sector by sector? When will we see that analysis and when will it be published? Can the Government outline what work was done to disaggregate the overall issues we have seen in the detailed European papers from the specifics for this economy and for the individual actors and sectors in our economy? When will we see the detail of that?
I will give the Deputy an example of a trade agreement in which the EU has demonstrated its willingness to initiate withdrawal procedures, namely the case of Cambodia, where there are concerns regarding serious human rights and labour rights violations. In February 2019, the European Commission started the process that could lead to the temporary suspension of Cambodia's preferential access to the EU market by publishing a notice in the official journal of the European Union. It is hoped that, given the 12 month timeframe involved in publishing a notice, there is time for the Cambodian Government to demonstrate to the EU that it is taking the necessary measures to address concerns and that, ultimately, a withdrawal of the generalised scheme of preferences is not deemed necessary.
The Minister might answer the questions I asked on this agreement. I asked about the economic evaluation and analysis and when we will see it.
Does the Deputy want me to answer or does he want to keep talking?
I want the Minister to answer the questions I asked, not the questions she wants to answer.
On the economic sustainability assessment, as the Deputy knows, we have committed to carrying out same on this proposed trade deal. My Department, in conjunction with the Department of Agriculture, Food and the Marine, had previously contracted Copenhagen Economics, an internationally renowned trade and economics consultancy, via a public tender process, to undertake a study of the economic impacts and opportunities of recent and prospective EU-third country free trade agreements for Ireland. That study took a portfolio approach to the agreement with the Republic of Korea in 2011, through the agreements with Canada, Japan and Mexico as well as the prospective Mercosur agreement and the prospective agreements with New Zealand and Australia.
That work has been progressing well but has not yet been finalised as the Brexit dimension has been dynamic. Now that the economic and tariff terms of the Mercosur agreement have been concluded, the Department of Agriculture, Food and the Marine and my Department will work to agree specific terms of reference before engaging with our consultants to see if an additional bespoke analysis can be undertaken on the precise terms of the EU-Mercosur agreement to determine the impact and the opportunities presenting for Irish industry in the deal. This work will be undertaken by an independent consultancy specialising in economics and trade matters, and not by a Department of State. Copenhagen Economics, an internationally renowned and independent consultancy, is already engaged on free trade agreements.
God preserve us from prepared answers because most of that was irrelevant to the questions I asked. My final question is simple. What level of economic analysis has been done to date? Is the Minister telling me that nothing has been done to date?
Is the Government waiting for this report that will examine everything from Korea to Brexit before it knows what the economic impact of this is? That is surely not the case. Surely in the 20 years the Department has been monitoring the progress of this agreement, it has been inputting into it as it goes along. The Minister knows the impact of this agreement sector by sector and those papers are available to be published. I am making that assumption so when will we see those papers and those analyses? Surely they exist.
We have done a preliminary analysis but it covers all the trade agreements. What we need to do now is a specific analysis-----
Has the Government done none on this agreement?
It was only announced a week ago. We have to do a specific analysis of that. We will do a full economic impact assessment to include the impact on the beef sector and the impact of Brexit and we will also do an environmental sustainability assessment. That is quite a comprehensive body of work and it will take some time to do that. The good news is that we have time because it will take two years before these legal matters are sorted out. We have time to do this and it is important that we take the necessary time and get all the information so we can make an informed decision.
I presume the Minister has not been an idle onlooker up to now. She has a draft agreement on her desk now.
It is an agreement in principle.
Yes, but that is the framework. The framework is there.
No, it is not. The details are not all in it.
I said the framework is there. If we are not talking about the framework, why is the Commission publishing EU-Mercosur data and the details? Presumably the Government knows the impact sector by sector and has made a discernment that, on balance, it is the right thing. The Minister is saying there are impacts that are good-----
It is not all bad; it is not all good.
I have listened to the Minister say it is not all bad and not all good. She has, therefore, done the analysis that tells her-----
No, I have not.
How can the Minister say what is good and what is bad if she has not done the analysis? Can she share that with us so that over the next two years of debate on this matter both at European level and in this House we can have an input into shaping it into a better deal that more closely meets the ideals set out in the original partnership and that more importantly will have dispute resolution mechanisms that are democratically controlled by this House and that will be effective?
The Commission, particularly in the agriculture area, has conducted assessments of our engagement on this issue. The cumulative impact assessment was based on a set of conditions, which are not the conditions that are proposed now. I will not be hidebound by any analysis done by the Commission. The Government has clearly stated that the Government will conduct an impact assessment of the proposals in the trade deal - the pluses and minuses. I see very considerable minuses in the agriculture sector, specifically the beef sector and its impact on the rural economy. However, we will look at all of it.
In addition to that assessment, in the intervening period we will make progress as the document is transposed into a legal text. I mentioned earlier the ambition and opportunity in that process to ensure that we deliver on legally binding guarantees that will ensure a level playing pitch with regard to sanitary and phytosanitary, SPS, standards and environmental standards. In some respects we are being criticised for the actions of a Commission - this is not a Government proposal - but the Commission is being criticised for having an environmental chapter, an SPS chapter, a trade resolution chapter, chapters on indigenous peoples and commitments on international labour law. Some of those represent an opportunity for us to ensure the production systems that are not fair now are exposed for what they are. They are not climate friendly and they do not have the same standards that apply to our production systems. Consumers need to be protected from that and that is the opportunity that exists in the next couple of years.
This deal is a sell-out. It is a sell-out of farmers. It is a sell-out of the environment and the battle to address the climate emergency. It is a sell-out on human rights. It is a sell-out on food safety and quality. It is facilitated by an earlier sell-out of democracy in the form of the Lisbon treaty which did away with Ireland's veto in the area of trade deals.
It was voted on by the Irish people.
Some of us opposed it and joined the anti-globalisation protesters in Genoa specifically because it would enable the EU to do international trade deals that would destroy our environment, hammer farmers and undermine human rights. Now the chickens have come home to roost. The Ministers should confirm it. Somebody asked earlier if we have a veto. The answer is that we do not because of the Lisbon treaty. Is that not right? The Ministers should confirm it. We can vote against this but it will not make any difference because we sold our veto in agreeing to the Lisbon treaty. Is it not correct that there is qualified majority voting in this area?
I will just go through the ratification process again because I do not want to give misinformation. It has to go through the legal process. It is our current understanding that it will be an association agreement with Mercosur. While the trade agreement element falls under the exclusive competence of the Commission and is, therefore, ratified by member states in Council under qualified majority voting and by the European Parliament, the EU-Mercosur agreement is a wider association agreement, including trade with areas of shared competence, such as political co-operation elements. The overarching agreement, therefore, ultimately requires ratification as a mixed agreement in accordance with national parliamentary procedures, which includes the Oireachtas. It is not possible at this stage to be definitive about what timelines may apply in respect of ratifying the EU-Mercosur agreement until a final text is available.
The script will just confuse people. In simple layman's language, we do not have a veto because we gave it away in the Lisbon treaty, which extended qualified majority voting to this area. The chickens have come home to roost.
I opposed it. Deputy Howlin supported it and that is why he is interrupting me.
I am talking about the-----
We warned about it and protesters took to the streets all over the world. The big mobilisations in Genoa, Florence and Seattle were all about this. At the time, small farmers and indigenous peoples from Latin America were on those protests. Farmers from France, such as José Bové, were warning that this would screw the small farmer and here we are. That is the consequence of it.
I would like some clarity on beef. The figure of 99,000 tonnes of beef is mentioned. People should be clear that at the moment 246,000 tonnes of beef come into Europe from the Mercosur countries. Is this 99,000 tonnes on top of that? The Commission documents on the Mercosur deal state that progressively over time tariffs on all Mercosur imports into the European Union will be eliminated. That is the deal. We sell out the farmers and many other things that I will come to in a minute to remove tariffs on manufactured goods, mostly cars and pharmaceuticals, but in exchange we have to remove tariffs from all that beef over time. It is not just 99,000 tonnes, but all of it, further flooding the European market which is significantly flooded with cheap beef from the Mercosur countries, with devastating consequences for small farmers across Europe. Is that not the essence of the agreement that the Government has in principle, notwithstanding a bit of tweaking, signed up to?
The Deputy is consistent in that he consistently opposes every trade deal. I have taken the view, as have many Members, that as a small island nation that exports more than 90% of our agrifood production to in excess of 180 countries around the world, we do so by virtue of our membership of a trading bloc of more than 500 million people, which allows us to negotiate trade agreements. As a consequence we are exporting to those 180 different countries. The EU recently concluded free trade agreements with Japan, Singapore, Mexico and Canada. We have both offensive and defensive interests in all trade deals, and we try to secure the best outcome in those negotiations, which are in the context of our sovereignty in those areas pooled at EU level.
The beef element of this trade proposal is challenging for our agrifood sector. In the period ahead where we move to a legal document, there will be opportunities to influence that.
For correction purposes, it is not a tariff-free proposal for 99,000 tonnes, it is 7.5%, progressively, over the period of implementation. I do not want to get lost in a moot point because the critical issue is the 99,000 tonnes, which could be additional to the existing access, which is at most favoured nation, MFN, tariff rates. We need to work to mitigate the excesses of the proposal by ensuring that we can invoke the labour element, the climate issues and sanitary and phytosanitary, SPS, standards, to limit the damage this will do to our sector. That is the opportunity I see to thwart the ambition on the other side.
Deputy Boyd Barrett's argument is anti-trade generally. When President Trump or others talk about protectionism, that sends a shiver down the spine of the agrifood sector more than any other sector in the country because we depend on trade but that trade must be negotiated to our best advantage and that is the challenge. This is not a done deal.
I will just read from the EU Commission document, "The agreement will, over time, remove duties on 91% of goods that EU companies export to Mercosur." It goes on to state, "The agreement will also eliminate import duties on 92% of Mercosur goods exported to the EU." That is what is says: over time get rid of all the duties.
It does not.
I am reading from the Commission document. The Minister can explain it to me but he has not explained it in his answer.
Some 20% of the world's oxygen comes from the Amazon rainforest. In the past ten years, an area the size of Portugal of those rainforests has been cut down. Mr. Bolsonaro is accelerating on a massive scale an already horrendous programme of deforestation. It is not getting better because of the trade negotiations with the EU; it is getting worse. He has declared war on the indigenous people and on the forests. Deforestation has increased 60% in the past year alone, 800 sq. km of rainforest were lost last month alone. Last year 5,800 sq. km of forest, which is 100 times the area of Manhattan, were cut down and that is accelerating. I would not even repeat some of the stuff Bolsonaro has said about the indigenous people but I will give the Minister a flavour so that he understands what this guy is about. He said "it's a shame that the Brazilian cavalry hasn't been as efficient as the Americans, who exterminated the Indians." This guy is seeking to exterminate the indigenous people and slaughter the rainforest that produces 20% of global oxygen.
Does the Minister seriously think we should be doing trade deals with a guy like this? Does he honestly believe he is going to respect environmental rights, human rights or anything? He does not care about these things, he is celebrating this deal. To give another flavour he said of one his political opponents, Maria do Rosário, she was "not worth raping". He described immigrants as "scum". He supports the use of firing squads and talked about the need for a hyper-aggressive police force, saying "a policeman who doesn’t kill isn’t a policeman". He said about homosexuality "I would be incapable of loving a homosexual son" and "I would prefer that my son die in an accident than show up with some guy". That is the sort of person we are dealing with. Does the Minister honestly believe we should be trading with people like that? Is that not an absolute betrayal of the fight to deal with the climate crisis and human rights on a global scale, and in particular for the victims of that kind of filth in Brazil?
As part of the agreement, we have a full chapter on sustainability. That is why we need to hold this person to account. Bolsonaro has had to recommit to the Paris Agreement to get the deal, and accept a mechanism whereby the EU polices his government's adherence to the Paris Agreement. I do recognise the concerns raised by the Deputies about the Brazilians' track record on climate change but the EU Commission is telling us that if Brazil walks away from its commitments under the Paris climate agreement, it walks away from the deal and the deal falls. In many ways, it is locking Brazil into the Paris Agreement but the Commission has to make sure that it follows through on these commitments because if it does not, the deal falls.
I am sorry, and I do not mean to be disrespectful to the Minister but that is just nonsense. There is no way to police this guy. There is no dealing with people like that. This guy is a dangerous lunatic, a climate change denier and a thug. Even if we set aside what Bolsonaro is doing in Brazil, has the Government quantified the sheer expansion of transport emissions as a result of this deal, even on its own terms? What are the extra emissions of CO2 that will further choke the environment as a result of this deal being done? They will be massive. Does that not show complete hypocrisy on the part of the European Union that it plans to sell cars for cows, as some people are saying, massively increasing emissions as a result of the expansion of transport emissions? Is that not an inescapable fact?
Here is an irony about the tariffs: we had a briefing today from the Minister for Foreign Affairs and Trade, Deputy Coveney, who said that if there is a no-deal Brexit, Europe will have to impose tariffs on agriproduce from the North of Ireland. Europe is going to do that and the Irish Government agrees with the principle of doing that. More tariffs will be imposed on stuff coming from the North to the South of this country than there will be on the massive amounts of poor quality beef coming up from Argentina, based on cutting down rainforest and jumping up and down on people's human rights. One could not make it up.
That is why in the context of Brexit, the preferred solution is approval of the withdrawal agreement and in the interim, the negotiation of a free trade agreement with the UK which will protect access to our market. I am not sure whether the Deputy is arguing for a trade agreement that would not have an environmental element or protection of human rights or international labour law components. If that is his view of what a trade agreement should be like, it seems to be at variance with his global vision, which I share and I believe there is the opportunity now to use those things to our advantage. In the context of the Deputy's observations about air miles and transport, we export our produce to 180 countries. We do it to prime markets because our product is recognised as of high quality but we are a global player in 180 countries, exporting a top-quality product, sustainably produced. We want to make sure that what we consider in a trade agreement is that it is legally fair trade, not just free trade.
Deputy Boyd Barrett has said that this treaty has become known as the cows for cars deal and that seems to be the way it is going.
All the focus has been on the fact that the EU will get to export industrial goods while we will get to import agricultural goods, from Brazil in particular, which is apparently of great benefit to us all. Mercosur will support agricultural industry that is partly responsible for mass deforestation in the Amazon and which does not have the same standards of traceability, animal welfare or food safety that we have. In previous responses, the Minister stated that it will all be dealt with and sorted out and that everything will be hunky-dory in the next two years. I do not believe him, however, and nor do many people listening to the debate.
For 25 years, environmental scientists have focused on the destruction of South American forests by ranchers for beef production, which is possibly the largest single setback to the world's ability to control carbon emissions. On 2 July, The Guardian published an article on the agricultural industry in Brazil and how it is destroying the rainforests. One company was penalised by the Brazilian Government and told it could not export cattle from a farm because rainforests were being cleared for the farm, but the company merely moved to another farm and sells cattle from there. The Minister indicated he will deal with all that and prevent it from happening but I do not believe he will, and nor do many other people. The question is how it will be done and what will happen over the next couple of years.
I alluded earlier to how it will happen but may not have adequately finished the point, when speaking about the market access we have to other countries. A delegation from China will visit here with a view to approving our systems. In reciprocal trade agreements, the Food and Veterinary Office, FVO, approves establishment for export and, subsequently at border inspection posts, the product is subject to routine checks that are risk-related in respect of the inspection regime. In the context of the opportunity that exists for us, we need to ensure, in consultation with bodies such as the FVO and the European Food Safety Authority, that we construct a legal text that will protect our farmers, level the playing pitch and protect European consumers from substandard products. That is the opportunity for us.
Nobody needs reminding or a lecture on the Brazilian Government's approach to the environment, which is well known. Deputy Boyd Barrett, along with many others, has outlined the offensive nature of much of what happens there and which passes for normal. We have an opportunity to ensure that we protect our industry, citizens and consumers throughout Europe from the dangers associated with that kind of a regime, in respect of environmental standards, human rights standards, animal production standards and veterinary medicines, to level the playing field in the negotiations. As a member of the EU, we will use the same processes that have been used against the EU, such as for the visit of the Chinese delegation. We can use that kind of process to ensure that produce will not arrive here that does not adhere to those rules. That is why I see the opportunity, in the environmental chapter in particular, but elsewhere also for beef, to ensure we will protect our beef industry. As I said earlier and have repeated ad nauseam, we will be able to thwart the ambition of others. If countries do not meet the terms and conditions, the deal will be dead and their product will not be allowed to get in here.
Is the Minister seriously trying to convince us that his concerns will trump Germany's concerns about the number of cars it sells to Brazil? Is that what he wants us to believe?
To elaborate further on the comment about cars and beef, approximately 60 companies in Ireland are involved in sub-supply to the automotive industry and employ approximately 7,000 people. The companies range in size from large to emerging players. In Irish terms, automotives cover a broad range of vehicles including trucks, buses and off-highway vehicles. Trade deals have been good for Ireland. While there are issues with the one we are discussing, they have been good. Last year, as a country, we exported in goods and services a total of €316 billion around the world. That is an increase of 74% over the past five years, given that in 2013, we exported €182 billion. We should not forget the benefits that trade deals have brought to the country.
We have also had many benefits from membership of the EU-----
I apologise for interrupting but I am conscious of the time.
I will let the Deputy continue.
We will supply wing mirrors for cars and, therefore, it will be all right to do away with the beef trade. That will be okay.
There are 7,000 jobs in the automotive sector. That is not to be laughed at or made light of.
One voice, please.
How will the Government ensure that the trade will reflect all our needs, as the Ministers indicated? How will it enforce it at European level when it comes to the crunch? I imagine that the Government will return to the Chamber in a couple of years with a similar agreement and seek endorsement. Will the Government build alliances with like-minded countries to form a bloc for the qualified majority vote, or will it simply rely on goodwill, talking and the countries saying they will change their practices?
To be clear, we have worked with like-minded countries. I co-signed a letter with the Belgian trade minister outlining our concerns about the deal, not least in respect of the beef industry. We will continue to work with our colleagues in Europe. We will carry out an economic impact assessment and examine specifically the impact it will have on the beef industry. We will also examine the impact of Brexit and how that will feed into the sector.
There is work to be done. It will be two years before the legal agreements are signed. We have time to do the work and make an informed decision.
It is not that people are against trade deals, although I have heard that thrown out during the debate. I do not often agree with Deputy Boyd Barrett but, in fairness, on the Lisbon treaty he is correct. We have lost our veto and we need to be honest with people about that. There are Brexit headwinds in the UK, where 70% of our beef is sold. Unfortunately, our suckler herd is in trouble and prices for beef have been pulled again. That is because of factories, Brexit and the climate debate. Every time one turns on the television, the farmer is almost the villain of the world. I walked down the street today to the Irish Farmers Association briefing. The air I breathed today was an awful lot different to what I breathed last night at home. It was totally different. Before any cost-benefit analysis or anything else is done, there is a reality to consider. Some 80,000 farmers, families, partners and children rely on the beef and suckler industry. Most of them are from counties Donegal to Kerry and out to County Longford. The sector has to be protected. No matter how the maths or sums are done, there will be a wipeout if Brexit happens. It will be one belt after another.
The Minister, Deputy Humphreys, spoke about doing deals with Cambodia. From what I have read, the measures are similar to being shown a yellow card in a football match but a country can receive five yellow cards from the EU. If a country indicates it will change this, that or the other, the EU will say "Okay" and the country can plod along again. We know the history of the countries in question. We know about the rotten meat and the lack of traceability. They will sign up to everything and say they will do everything but they will cod the EU. There is no point in saying it. Ultimately, 80,000 farmers, families, houses and people living in rural parts of Ireland will be affected.
When the Ministers go to their respective Councils of Ministers, will they oppose this proposal? Will Fine Gael Members of the European Parliament, who are part of the European People's Party grouping, oppose this when it comes before them in three years' time? It may come before that. Will alliances be made with different countries on this? I know President Macron welcomed the deal straight away and he has let down the French farmers. Will the Government make alliances with the different countries to see if it can get what it needs to block this deal?
Farmers in Ireland have heard about the climate action plan. The South Americans can cut down forests the size of football pitches every minute and haul meat across the world. We export meat but in this country we have traceability and high standards are maintained by the Department of Agriculture, Food and the Marine. In fairness, we produce a grass-based product. Will we tell those in Europe that we will not stand for this proposal? Deputy Ferris will propose a motion to the Dáil tomorrow, so will we put in place a legal document as a message from Oireachtas Members on behalf of the people of Ireland before the Dáil within the next three or four months? Will the Government commit to a legal document indicating that we will not accept this deal?
As I said earlier, I do not believe we have a deal. We have the outline of an arrangement that must be given legal effect. When we ultimately have a deal, it will be a decision for the Oireachtas at that stage. My responsibility is to ensure that in that intervening period, we work with like-minded people and use the institutions of the European Union and the State to ensure we get to a point where we thwart, diminish and frustrate the ambition contained in that headline agreement so as to secure the best possible deal. The best possible deal would bring a levelling of the playing pitch in order that the standards alluded to by the Deputy, including those pertaining to the environmental, traceability and veterinary medicine, would be the same as those applied to the product that is coming in to compete with us on EU supermarket shelves. This is the challenge.
In the intervening period we will of course do an appropriate assessment of the deal, investigating not only its economic impact but its environmental effect. There is opportunity in that space to ensure the legal document ultimately drafted protects our farmers from unfair trade. The ultimate ambition is to have fair trade and in the context of that fair trade, if we are not fighting with one hand behind our backs, our producers can compete with anybody. I know that from the privilege I have had working on trade missions with people in the industry. Our product is rightly respected as a high-value sustainable product, and it is in our long-term best interests to keep embracing that model of production.
The Taoiseach has been quite frank about this. If we find with our assessment that the deal is not in our interests, we will try to forge alliances with others to ensure we can meet the required threshold for a qualified majority vote, QMV, at Council level. In the interim, we must do the assessment and look at the detail of the outline agreement to see how we can try to influence that in the intervening period to deliver a legal text that would protect our interests and those of beef farmers in particular. There are 100,000 family farms - not 80,000 - deriving some element of their income from the beef sector. The critical mass of the Irish agricultural sector is involved with beef production. People are also affected in the poultry, pork and dairy sectors, although some of these are affected in a positive sense. The real exposure is to the beef sector.
As the Taoiseach has said, we will do the assessment and take things from there. In due course it will be an issue for the Council of Ministers approval process, the European Parliament and member states. I hope the Deputy and I will be Members of this House at that stage but it is some distance away.
We have spoken about the 80,000 beef farmers in this country and, on average, they spend approximately €30,000 annually in their local communities. We must bear in mind the major losses that will accrue if we sell ourselves down the swanny. Any deal with Mercosur is a shockingly bad deal for Ireland, including its beef, dairy, poultry and pig farmers. I noted the Minister's comments earlier that this may not be a done deal and I sincerely hope it is not. We should bear in mind that cattle in Brazil are not tagged and there is no database or traceability. Hormones, beta agonists and other growth promoters are widely available but these products are all illegal in the EU. Foot and mouth disease is endemic in Brazil. A European Union food business operator audit in Brazil indicates that written guarantees provided by the Brazilian authorities were not reliable. Bearing all this in mind, has there been an assessment of the health of those who consume that beef? Bearing in mind the potential losses to local communities, has there been an assessment of cost to the Irish beef farmer if any deal is done?
The Deputy has clearly articulated the range of concerns and the objective from this side is to achieve a fair trade arrangement. As I said, in all trade negotiations we have offensive and defensive interests and we are not yet in a position where a trade deal is being approved or rejected. We are at the beginning of a process whereby the outline agreement is given legal effect. The issues around traceability, sanitary and phytosanitary standards and hormone-treated beef, for example, will all see engagement by agencies of the European Union so as to be of advantage to us in trying to protect our beef farmers in the final legal document.
We will do an assessment of the impact of the trade agreement, including how it pertains to industrial goods, services, public procurement and, in a broader sense, political co-operation and a range of issues involving most if not all Departments. We are a long way from inking a deal and we have the opportunity to collaborate and ensure we achieve the best outcome for ourselves.
Today was very important as county executive members of the Irish Farmers Association, IFA, from all over the country were here to give an emergency presentation to all Members of both Houses of the Oireachtas. Tomorrow, buses will carry people from the beef sector travelling from all over the country to protest here and highlight that it will be impossible for beef farmers to make money after this is implemented. It will be impossible for a person to survive with a suckler herd. On Thursday, the hill men and women will be here to explain their case across the road in Buswell's Hotel.
There are farmers from all sectors of society coming to Dublin to make their case to us as politicians about why they see this as a bad deal. The members of the IFA and I want to see Deputy Ferris's party's motion being voted on tomorrow night. They want to see us as politicians coming together in the House to support the Sinn Féin motion and clearly stating that we reject the deal. They want us to say it is not a good deal for Ireland or our farmers if it is going to hurt such an important sector, our cornerstone of agriculture in Ireland. We will ask Fianna Fáil, as well as all the other Members elected to represent our farmers, to support the Sinn Féin motion. It is vital.
I know the farmers from my county will be looking to see who will support Deputy Ferris's motion and who will reject it to support Commissioner Phil Hogan on his reappointment in Europe. Good luck to him and I am delighted for him but it is a pity about the farmers he is supposed to be representing. Is it not funny how people forget their roots and where they come from when they get into high office? It is a disgrace. The IFA called this a sell-out and it is right. I do not want to eat into my colleagues' time.
The reference to the Commissioner is somewhat unfair.
Would the Deputy prefer to be going to a Commissioner from another member state?
Such a person might do better.
The Deputy should bear in mind that, during the incumbent Commissioner's tenure, we have secured a ring-fenced fund for the Irish beef industry of €50 million from Europe and €50 million from the Exchequer.
The Minister to speak without interruption, please.
I am pleased to say that, during all of my engagements with the Commissioner, whether on this issue or any previous issues that arose about any particular sectoral aspect of the Irish agricultural and food industries, he has been most responsive to the concerns we have raised and I think most farm organisations would acknowledge that. He has worked within a framework where he has to represent all European agricultural interests but, even in the context of that, Ireland is the only member state that got access to this €50 million from the Commission. No other member state is getting that. Deputy Michael Healy-Rae is telling me, in his criticism, that he would prefer to be going to a Commissioner from Malta, Romania or Luxembourg-----
It is sell-out money.
-----when looking for a deal from Irish farmers. I can only say that is not my experience.
I acknowledge the point Deputy Michael Healy-Rae makes about the challenge that this poses for the beef sector in particular and, as I said, we are far from a situation where we are approving or rejecting a deal. We are not at that stage. Deputy Healy-Rae knows, from his wide experience in life, that there is a big difference, for example, between making a decision to purchase a property and the contract one ultimately signs. Terms and conditions apply. We need to use our influence to shape the terms and conditions that apply to this deal in order to benefit our farmers. That is my function as long as I am in this position and I would also see it as my function to work collaboratively if I was sitting in Deputy Healy-Rae's position. This is in the national interest and we can make progress together. Ní neart go cur le chéile.
The Minister mentioned forging alliances after the impact assessment. That unnerves and concerns me greatly. The Minister and Commissioner have been informed of the serious and genuine concerns of the farming organisations such as the Irish Farmers Association. Our beef farmers are struggling as it is and it is unbelievable that the Government has lost valuable time and is on the back foot again on such an important issue. I have serious concerns.
I am from a good agricultural county in Offaly where many beef and suckler farmers are struggling. I ask the Minister to reconsider that.
We know the Mercosur agreement will have obvious impacts on our economy but it will also have an impact on the future of Irish agriculture and its generational renewal which is a serious threat to the sustainability of Irish agriculture. What young person is going to decide to take up farming as a way of life if the industry is in absolute chaos and the future is bleak? That is the situation the Minister is creating. This Government needs to step up to the mark and take action. There have been enough reports and assessments. The Government should take action now before it is too late.
I appreciate the Deputy's concern. She has raised the issue in the House previously and her rural constituency obviously has her well informed, as is the case for all other Members.
To be fair to the track record of the Government, I point to the aforementioned €50 million that the Exchequer is putting in to support the beef industry, the beef environmental efficiency scheme and support being provided to producer organisations. In the context where we do not have a direct influence on price, we can deliver income support through extending the disadvantaged areas and by putting €50 million back into the sector. Every opportunity we have had through any initiatives that are supplying additional resources have been targeted at this sector and we continue to make such efforts.
It is not about forging alliances into the future. That work is ongoing. Most recently, the Taoiseach co-signed a letter with President Macron of France and the Prime Ministers of Belgium and Poland on the issue of the Mercosur agreement. We will continue because we are not without other member states which share our concerns on specific aspects of this.
As I said, this is not a deal yet and there is still an opportunity to shape and influence it. It is something on which we can all work collaboratively to ensure the ultimate terms and conditions that apply will deliver a level playing pitch on standards and that we can invoke the environmental chapter, or the chapter on sanitary and phytosanitary standards, to deliver that. We must work with the EU institutions, within Government here and with other governments across the EU. Simultaneously, we must do the appropriate economic and environmental assessments so we are armed with the necessary information to sustain the arguments that we make.
Commissioner Hogan has said that the EU will put in place a €1 billion stabilisation fund in the event that the Mercosur deal leads to market instability. We know it will lead to market instability and I do not have the same faith in the Commissioner as the Minister has.
I welcome farming families from all the different farming organisations to the Public Gallery. Those people want to be at home and farming tonight, looking after their hay and crops, not in Dublin today, tomorrow and Thursday. They would not be here if they could avoid it. These are hard-working, decent people. The Minister, Deputy Creed, knows that as he is from farming stock. These farming families have been let down by Commissioner Hogan and the Government.
We know that our indigenous beef sector generates approximately €2.8 billion annually. It does not take a genius to figure out that even if Ireland was to receive the entirety of that fund it would be insufficient to match the fiscal damage that will ensue. There will be widespread chaos with the wipeout of farming families and communities. The Government has attacked the pubs, schools and An Garda Síochána. It is now going to plant trees in our good land.
How was that figure of €1 billion arrived at? Will the Minister accept that it is entirely inadequate?
How much control did elected governments and Members of the European Parliament have during the negotiations? The European Commission says it negotiated on behalf of the EU in line with the guidelines given to it by the governments of the 28 EU member states. What specific guidelines did the Minister or Ireland give to the Commission? To what extent did Ireland work together with EU member states to prepare the negotiations and negotiating strategies? What was the specific level of involvement? I want those questions answered.
I want to broaden out away from the agricultural sector. I understand the agreement will also open up the government procurement market of member states of Mercosur. The agreement will make it easier for European firms to bid for government contracts in Mercosur countries on equal terms with local companies. Is that going to be reciprocated here? Will small firms from Mercosur countries have easier access to our procurement bidding process? Has any analysis been conducted to assess how that might impact our SME sector which will be devastated, along with the small farmers? There are questions there for both Ministers.
There are benefits in this agreement for the SME sector. There are also benefits for the dairy sector with quotas for cheese and infant formula. The SME sector will have much greater access to the procurement process in Mercosur countries. They will also have an easier process and an agreed customs procedure that will make it much easier and more cost effective for them to do business in that sector. The Minister for Agriculture, Food and the Marine, Deputy Creed, will answer the other part of the Deputy's question.
The Deputy referred to the figure of €1 billion. That is the chapter to which I have paid least attention because I am not in the business of being bought off when we talk about the content of the deal.
One cannot be bought off if one has sold out.
My efforts are entirely focused on ensuring that the ultimate deal protects our interests. To concentrate on the €1 billion is, in a way, to throw in the towel and I am not at that stage at all.
I am at pains to point out that we can work to influence the terms and conditions of this scheme. It will undergo the appropriate economic and environmental assessment. We can influence and work with other people. We can work collaboratively in this House and we can work with people outside this House and across the European Union to influence and shape the terms and conditions of the final legal document that will be put before the Council of Trade Ministers, the European Parliament and national parliaments in due course. That job of work needs to be done. We have none of that detail now.
I made reference, in reply to Deputy McConalogue, to carcass weight equivalent. The only segmentation we have in that context is the breakdown between fresh and frozen goods. There is an opportunity to ensure that we influence that in a way that is positive for us.
There is a whole host of other things we can do as to the terms and conditions outlined in the agreement on, for example, environmental standards, traceability, sanitary and phytosanitary standards, SPS. We can do that and that is where the focus is now. This is not about being bought off. That is the least of my concerns at this stage.
That is not the least of my concerns.
The Deputy might be interested in the buy-off but I am interested in enuring we secure an appropriate trade agreement.
I am unable to sell out.
I must call on the Ministers to conclude at 8.45 p.m., which leaves five minutes for Deputies to make further contributions.
I seek clarity on the Minister's reference to a mixed trade deal. If it is a mixed trade deal, it will come before the parliaments of all EU member states. I understand we are not certain whether that is the case but assuming it is, will the Oireachtas vote on the deal when the time comes? If we were to reject it, would the trade deal fall for the whole EU?
As the time is limited, I will ask one question which I do not believe anyone has asked. Can the Minister not stipulate that the Commission restrict the importation of prime cuts of beef into the Irish market on the basis of our unique vulnerability, especially in the context of the impending Brexit time bomb? If the larger EU economies want to export cars and agricultural machinery to South America, should they not take the lion's share of the beef from South America?
It is important that people in the Gallery know that Deputies are fortunate to get two minutes to ask a question. The arrangements in the Dáil mean each group gets 15 minutes. Many more back bench Deputies would like to speak on this issue.
I thank the Minister for the commitment he gave me in the House last week that the €100 million provided under the exceptional aid plan will be paid to farmers this year. I welcome that decision. I do not doubt the Minister's sincerity about trying to have the Mercosur deal changed. Do I believe he will succeed? To be honest, I very much doubt it. That is plan A. We discussed the 100,000 people who depend on farming, particularly suckler farming, in the north west and the area I represent. Plan B should involve the Minister seeking to secure funding of at least €200 per cow to support suckler cattle farmers and keep them in business. Otherwise, they will go out of business.
Cá bhfuil An Comhaontas Glas? Where are the Social Democrats? Those parties had time to speak tonight. Are they not interested in rural Ireland in any shape or form? We are being dosed with the green agenda and listening to an Teachta Eamon Ryan every day of the week. He claims his grandmother is from Tipperary but on a serious issue like this Green Party Deputies do not even have the respect to come into this Chamber and address questions to the Minister. Shame on the Green Party and the Social Democrats.
The Mercosur deal provides for additional imports from South American countries. Has that been taken into consideration? These countries are seeking 99,000 tonnes of beef exports in addition to the 269,000 tonnes they are allowed already. Has that been considered seriously by the Government and the Commissioner? It seems to be very excessive.
Does the Minister accept that there will be a deal? I gather from his contribution that there will be a deal, although we might not like it. I may have picked him up wrong. Has he accepted that there will be a deal between the EU and Mercosur countries?
Picking up on Deputy Fitzmaurice's question, we get the impression, as does the farming lobby, that the Government has thrown in the towel on the deal despite what the Minister says. Will the various Government agencies such as Bord Bia introduce new measures to market the prime Irish grass-produced beef to counteract this deal? Surely that would have to be up at the top of the agenda.
To clarify, this is an association agreement which means it covers trade and other matters. If it is an association agreement, as it is being presented by the EU, it will have to come before the Dáil to be voted on. My preference would be to have it come back to the Dáil but the Commission may decide to seek a provisional application, which would mean the trade aspects of the deal could be provisionally applied. Ultimately, however, the deal will have to come back to the Dáil as an association agreement. If the trade element is to be provisionally applied, the process is that it will go to the Council of Ministers and then to the European Parliament. Members should note that trade is a European Union competency so the EU has the competency to negotiate trade agreements. The full deal will eventually come back to the Houses. However, to be straight, fair and open about this-----
The trade deal is already done.
No, the Commission may decide that but it is a decision for it. I have no guarantee that it will or will not do so. We will do everything we can to forge alliances and minimise the impact of the deal. It has good parts and we should accept that but there are challenges for the beef sector. We will do all we can to minimise the difficulties it presents for the beef sector.
I thank Deputies for their engagement on this issue. It is a contentious topic for any Deputy, but especially those from rural Ireland. The breadth of the contributions reflects the scale of the issue, not only for individual beef farmers but for the rural economy generally. It is probably not widely understood outside the rural economy that the multiplier effect for the indigenous sector and the beef sector in particular is many times higher than it is for people involved in foreign direct investment, for instance, because of the purchase of local inputs and so on. Farming is critical to our rural economy and our biggest indigenous industry. The scale of the issues related to Mercosur as they relate to and impact on agriculture are of real concern to the farming community. There may be benefits for public procurement, services and manufacturing. In assessing the deal, we will examine all of these issues and the impact on the farming sector, especially the beef sector. We will consider how we can use the intervening period appropriately to ensure that the ultimate terms and conditions which apply to the deal when it is reflected in a legal text are used to protect and deliver a fair trade agreement and a level playing pitch.
From my constituency experience and engagement with farmers generally, they do not fear competition provided it is fair. What we fear in the context of Mercosur is the potential for competition to be unfair. The Government's function and responsibility, during the close-out period of a possible trade agreement, is to ensure its terms and conditions are influenced in our favour. I reiterate the point I made on carcass weight equivalent. The segmentation of that insofar as it is currently articulated only deals with fresh or frozen beef. It is critical in serving our industry to ensure the appropriate segmentation is secured, in particular the imports cannot only be prime cuts and the only segmentation that applies will between fresh and frozen.
I accept the points made about the beef sector in general and its current difficulties. I refer again to the initiatives being taken in that area. This trade deal comes on top of other challenges facing the industry, such as the new Common Agricultural Policy and climate change.
One of the great hallmarks of the Irish agrifood industry in all its manifestations, inside and outside the farm gate, is the capacity to work together. We have met big challenges such as foot and mouth disease and the pork dioxin crisis, and we can rise to meeting this challenge as well. It is critical that we use the intervening period to influence the shape of the deal that is done. In everything I will be doing for as long as I am here, I commit to ensuring we deliver fair competition. In this context, fair competition will ensure we can compete with anybody throughout the world.
On Deputy Nolan's point about the 260,000 tonnes, in global trade anybody can export provided they meet the terms and conditions of EU consumer protection standards and pay the appropriate tariff for trade with third countries. Much of the access people enjoy is on the basis that they pay the most favoured nation, MFN, tariff rate. We cannot stop that product, other than insisting it meets the appropriate terms and conditions. With regard to the future agreement and the 90,000 tonnes, it is about making sure that whether or not the figure becomes the reality, we ensure the terms and conditions under which the market is accessed deliver fair trade and competition for our industry.
My colleague has dealt extensively with the approval process. It is some distance away from us. I appreciate we will have an opportunity to debate all this tomorrow. It is some time away and it will be an issue for a future Oireachtas. It is not an issue this Oireachtas will consider because there is not a deal to be considered at this stage. I commit to ensuring that if the deal ever becomes a reality it will not have the outline of the deal we have seen.
I thank the Deputies for their contributions this evening. As the Minister, Deputy Creed, said, we want to get the best possible deal for the country and we will work towards that. The key word is balance and as a Government we need to go through this deal in detail and see whether it strikes the right balance for Ireland. I recognise and appreciate the very genuine concerns expressed by our farming community about the Mercosur deal but it is also important that we recognise there are positives in the deal for Ireland and significant benefits for Irish exporters in sectors such as business services, chemicals, the drinks industry, machinery, medical devices and the dairy industry, with a reduction or elimination of tariffs and barriers to trade for these sectors. As I said earlier, and I will say it once again, trade deals have been very good for this country. We are a small open economy and we depend on them. We exported €316 billion worth of goods and services in the past year, which is a lot of goods and services. Many products coming out of this country go across the world and it is important we remember this.
I want to be clear that the fact of the matter is that as a Government we absolutely fought to achieve the best possible deal for our farmers in terms of the agreement in principle that we see. The deal was negotiated at EU level. As a member state, Ireland raised serious concerns over a long period of time. We had various meetings and we made all the contacts we could. The Minister, Deputy Creed, also outlined this. It is important to say that the agreement as it stands at present ensures there will be equivalent standards. The EU sanitary and phytosanitary, SPS, standards will not be relaxed in any way. They remain non-negotiable. The highest EU standards will be applied to all imported goods, particularly food, so there will be no hormone beef and no GMOs will be allowed. I reassure farmers that equivalent standards will be an integral part of this agreement.
With regard to concerns regarding climate change and deforestation, Mercosur, including Brazil, will have to fully implement the Paris Agreement as part of this deal. If it does not, the deal will be void and will fall. It is important to remember this is far from a done deal. It is an agreement in principle. It has to go through the legal process and that will take up to two years. It then has to be voted through by a qualified majority of the Trade Council and then it must go through the European Parliament. As I explained earlier, as a mixed agreement it will have to come back to Dáil Éireann and we will be involved in the final ratification process. I certainly hope this is the case and I will certainly be making the case that it should come back to the Dáil.
The quota for beef will be phased in over six years, so we are talking about a deal that might not be fully felt until 2028. Meanwhile, we are staring down the barrel of a possible no-deal Brexit on 31 October. That is 115 days from now. As everyone in the House is very aware, a no-deal Brexit could deliver a serious shock to our economy. In particular, it would have very damaging consequences for the agricultural sector. It is in this context, with serious immediate challenges such as Brexit facing us, that we need to take a step back and use the time available to examine the Mercosur deal in detail. This is why the Department, in conjunction with the Department of Agriculture, Food and the Marine, will proceed to ensure a comprehensive independent economic assessment is carried out on Mercosur. We believe we have the time and space necessary to do this. I believe the shape Brexit takes and the impact it will have for the agricultural sector will need to be a key consideration of this economic assessment.
The Taoiseach has made it very clear that the Government has an open mind on the deal. As I outlined earlier, there are benefits in certain sectors but there are also negatives. What we need to do is determine overall whether this will be a win or a loss for our economy. We should not lose sight of the fact we have had EU trade agreements with Japan, Vietnam, Singapore and Mexico and they have been very positive for our agricultural sector. In particular, they provide for the export of 105,000 tonnes of European beef. They were good trade deals for the agricultural sector. I accept that Mercosur is difficult but what we have to do now as a Government is look at the deal in the round. That is what the economic assessment will do. It will ensure that the Government makes a fully informed decision when deciding what position to take when the ratification process on this deal commences in two years' time.
I thank the Ministers, their hard-working officials, all the Deputies who have contributed to the debate and the very engaged Public Gallery.