We are yet to see full texts of the agreement, but the main points that have been identified at this stage from an agriculture perspective are as follows:
For the Mercosur countries, the agreement will liberalise 91% of trade overall - 72% will be liberalised in 10 years or less. On agri-food trade, duties will be gradually eliminated on 93% of tariff lines concerning EU exports, corresponding to 95% of export values. Olive oil, malt, frozen potatoes, wine (except bulk), spirits, soft drinks, fresh fruit (kiwi, apples, pears, plums), canned tomatoes, chocolates and canned peaches will be fully liberalised. In addition, there will be duty-free quotas for EU exports of cheese (30 000 tonnes), milk powders (10 000 tonnes) and infant formula (5 000 tonnes). These will be phased-in in ten equal annual instalments from entry into force.
For the EU, the agreement will liberalise 92% of trade overall, of which 66% were already Most Favoured Nation (MFN) zero. On agri-food trade, EU will liberalise 82% of imports. There will be key quota volumes for sensitive products (all phased-in in six equal annual instalments unless otherwise stated):
- 99,000 tonnes CWE of beef, equivalent to 76,154 tonnes of cuts, subdivided into 55% fresh and 45% frozen with an in-quota rate of 7.5%, and elimination at entry into force of the in-quota rate in the Hilton quotas;
- 180,000 tonnes of poultry CWE duty free, subdivided into 50% bone-in and 50% boneless (boneless sub quota of 90,000 tonnes CWE equivalent to 64,286 of cuts).
- 25,000 tonnes of pigmeat, with an in-quota duty of €83 per tonne.
- no new volume of sugar for Brazil but rather the elimination at entry into force of the in-quota rate on 180,000 tonnes of the Brazil-specific WTO quota for sugar for refining, and a new quota of 10,000 tonnes duty free at entry into force for Paraguay. Specialty sugars excluded.
- for ethanol for chemical uses, 450,000 tonnes duty free. 200,000 tonnes of ethanol for all uses (including fuel), with in-quota rate 1/3 of MFN duty, giving a total of 650,000 tonnes.
- for rice, a quota of 60,000 tonnes duty free.
- for honey, a quota of 45,000 tonnes duty free.
The EU Commission will now commence the process with Mercosur of finalising the text of the agreement. The Deputy will be aware that the Taoiseach has already confirmed that a full economic assessment of the deal will be carried out, and my Department will feed into this work, with the assistance of Teagasc.
It is also worth noting that this agreement will not come fully into effect for some years. It will first go through a process of legal scrubbing, which could take up to two years, before being put before the European Trade Council for ratification by Qualified Majority Vote, and the European Parliament. It may be provisionally applied but will take a further number of years before coming fully into effect. The Oireachtas and other national parliaments may also ultimately have a role in ratification.
We will also now reflect on the appropriate next steps in the context of both engaging further with Member State colleagues, and examining ways to diminish the potential impact of the agreement.
