As the Deputy will be aware, in June 2019, the EU reached political agreement in their trade negotiations with the Mercosur region (Argentina, Brazil, Uruguay, and Paraguay). The EU-Mercosur Agreement is the EU’s largest trade deal to date. The Agreement covers a population of over 770 million with trade in goods and services valued at €122 billion. It aims to reduce and, in some areas, eliminate trade tariffs between the EU and the Mercosur region.
The Agreement, once ratified, would see a significant reduction or elimination of tariffs and barriers to trade that would enhance trading and investment opportunities between Ireland and the rest of the EU, and the Mercosur region. It would make exports from Ireland more attractive and potentially increase the demand for Irish product. In that regard, Ireland exported approximately €0.5 billion worth of goods to the Mercosur region in 2019 and Irish goods exports to Mercosur have grown on average by 2% annually with Mercosur accounting for 0.3% of total Irish goods exports last year. It is anticipated that this Agreement would allow Irish exporters to expand faster and open opportunities across a wide range of sectors – in business services, chemicals, machinery, medical devices and processed food and dairy.
In January 2020, my Department, in conjunction with the Department of Agriculture, Food and the Marine, commissioned independent consultancy firm, Implement Consulting, to undertake an Economic and Sustainability Impact Assessment (ESIA) of the EU-Mercosur Agreement following a competitive tender process. The ESIA will consist of two equally important and complementary components, namely a comprehensive analysis of the potential economic benefits as well as a robust sustainability impact assessment (including social, human rights and environmental impacts) that the trade Agreement could have in Ireland and the Mercosur countries. Wide-ranging stakeholder engagement by the Consultants is a key part of the Impact Assessment.
While the European Commission works to finalise the legal texts of the Agreement in a process known as "legal scrubbing", many Member State Parliaments, including our own, have debated the terms of the Agreement as announced in June 2019. A lot of the debate has concerned the sustainable development elements of the Agreement, and I and colleagues have indicated that enforceable guarantees which strengthen environmental protections, particularly with regard to the Amazon rainforest and climate action, are one of the priority considerations in assessing Ireland’s position on the Agreement.
In this regard, Commission Executive Vice President and Trade Commissioner, Valdis Dombrovskis has stated that the EU is engaging with the Mercosur countries to negotiate an additional text on climate and deforestation as there must be: “lasting solutions for the Amazon region” before the Agreement is proposed for ratification. Accordingly, any additional text on the issue of strengthening climate and deforestation provisions within the Agreement will be assessed, and along with the overall ESIA report, will assist our decision-making on the Agreement ahead of the European Commission presenting the Member States with the final text of the Agreement which we anticipate will be in Spring 2021. I have been clear that additional safeguards are needed for my support.