On Friday 28th June last, the EU concluded negotiations for an Association Agreement with Mercosur – after nearly 20 years and 40 rounds of talks. This marks the EU’s largest trade deal to date and is four times the size of the trade agreement with Japan.
Irish exporters have been subject to trade tariffs, barriers and restrictions when exporting to Mercosur. This Agreement will see a significant reduction, or elimination, of tariffs and barriers to trade which will allow a cross flow of trading and investment between Ireland, the EU and the Mercosur region. The EU-Mercosur Agreement should make exports from Ireland more attractive, and potentially increase the demand for Irish products.
As with every Free Trade Agreement, Ireland – like all Member States – has defensive as well as offensive interests. The Agreement with Mercosur presents sectoral opportunities for Ireland in areas such as software and services in telecoms, financial services, digital content and travel, engineering products and services, life sciences, food and beverages, and education services.
On the other hand, I was always keenly aware of the potential impact that this Agreement presents to the EU’s and Ireland’s beef sector. Ireland, along with a number of other Member States, asserted early on in the negotiations that these agricultural sensitivities (and beef in particular) must be fully considered in the negotiations.
In this regard, Ireland has continually highlighted the cumulative impact of agricultural market access in relation to all EU trade agreements. My Department has done this through engagement with the Trade Policy Committee in Brussels, as well as joining with other Member States in formally writing to the Commission outlining our concerns. In addition, our concerns have been raised at political level – including myself and my officials raising the issues with counterparts, both at Trade Council deliberations and bilaterally with the EU Commission.
To that end, I wrote to the EU Trade Commissioner, Cecilia Malmström as recently as 31st May this year to restate my views, which I had previously articulated at European Trade Council meetings, as well as directly with the Trade Commissioner, regarding the current challenges facing the beef sector.
I had sought assurances from the Commission that the final offer on beef – an offensive demand from the Mercosur side – would ensure that:
- the tariff rate quota for beef was low.
- that phasing-in periods were designed to allow sufficient time for Irish and EU industry to adjust,
- the Commission continually monitor quota levels taking into account domestic market conditions,
- the composition of beef imports from the region would be limited in relation to fresh chilled beef, and
- robust checks would be established and monitored at points of import to the EU to ensure animal health and welfare standards have been maintained.
As I am sure you are aware, An Taoiseach also recently wrote to the Commission to highlight our particular sensitivities in these negotiations. An Taoiseach joined the leaders of France, Poland and Belgium on 17th June, in writing to Commission President Juncker expressing our concerns on the inclusion of sensitive agricultural products in the negotiations, and stating that the current quotas for such products must not be increased.
It is disappointing that the agreement reached on beef access is more than we would have wished. Although the quota of 99,000 tonnes is far less than the Mercosur countries were looking for. Also, the Agreement ensures an extended lead-in period before the full “TRQ” takes effect and that five-year period will only commence after the legal text of the Agreement is finalised and “legally scrubbed”, such that the full TRQ for beef will not take effect for some 7/8 years from now. The Government’s active campaign, together with some other Member States, to secure the viability of the Irish and EU beef sector, has been a key component in achieving these ameliorating elements to this particular TRQ for beef.
Despite our strenuous efforts, we obviously are disappointed in relation to beef. However, it’s important also to recognise the positive aspects to the deal as I’ve outlined earlier. In terms of Agriculture, it is important to note that the dairy sector will benefit from the removal of tariffs on cheese, milk powder and infant formula. There are also benefits for the drinks industry.
We now intend to carry out a comprehensive economic assessment of the deal to see what impact it’ll have on the Irish economy and on jobs and that will inform future actions.