The Common Commercial Policy, including trade, is an exclusive competence of the European Union under the EU Treaties. The European Commission acts as lead negotiator on behalf of all EU countries in relation to trade agreements with non-EU countries. Member States, in Council, approve negotiating directives (or mandates) before negotiations begin, are consulted with as the negotiations proceed, and have final approval at Council, as has the European Parliament. I and my Department lead for Ireland on these matters.
As the Deputy will be aware, the EU concluded negotiations for an Association Agreement with Mercosur countries on 28th June, 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 an increased flow of trade an 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 and the employment that supports.
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 could present to the EU’s and Ireland’s agricultural sector. In that regard, Ireland, along with a number of other Member States, asserted early on in the negotiations that agricultural sensitivities – and beef in particular – must be fully considered in the negotiations.
Ireland has also continually highlighted the cumulative impact of agricultural market access in relation to all EU trade agreements. Our concerns have been raised at all political levels, including by myself and my officials raising the issues with counterparts, both at Trade Council of Ministers deliberations and bilaterally with the EU Commission, and with my Member State counterparts.
Further, I wrote to the EU Trade Commissioner, on 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 recently as Tuesday of last week 1st October, in my discussions with fellow Trade Ministers at the EU Council, I reminded colleagues that while the Mercosur Agreement offered clear geopolitical and economic opportunities the beef tariff rate quota presented difficulties for Ireland given the current economic viability challenges faced by our primary producers.
Following the conclusion of the negotiations for the EU-Mercosur Association Agreement, the Government committed to undertake full economic and environmental sustainability assessments of the political agreement. My Department, is working collaboratively with the Department of Agriculture, Food and the Marine in this regard. These assessments will consider the impact the Agreement will have on the Irish economy and on jobs, as well as the environmental sustainability aspects of the deal. It will also consider how the EU-Mercosur Agreement might mitigate/exacerbate the likely impact of Brexit for our economy. This assessment will help to inform our future actions in relation to the EU-Mercosur Agreement.
In relation to EU-US trade, on 25th July 2018, European Commission President Juncker and President Trump met in Washington to launch a new phase in trade relations between the United States and the European Union. In a joint EU-US Statement, they agreed to:
- work together toward zero tariffs, zero non-tariff barriers, and zero subsidies (on non-auto industrial goods) and to work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans,
- strengthen strategic energy cooperation to potentially increase US imports of LNG to diversify the EU’s energy supply,
- launch a close dialogue on standards to ease trade barriers, reduce bureaucratic obstacles, and slash costs, and
- work closely together with like-minded partners to reform the WTO and to address unfair trading practices, including intellectual property theft, forced technology transfer, industrial subsidies, distortions created by state-owned enterprises, and overcapacity.
On the foot of this joint statement, an EU-US Executive Working Group (EWG) was established to carry forward this joint agenda, co-chaired by EU Trade Commissioner and the US Trade Representative.
On 18th January 2019, the EU Commission adopted proposals, or mandates, for two negotiating directives for sector specific trade talks with the United States: one on conformity assessment (making it easier for companies to prove their products meet technical requirements on both sides of the Atlantic), and one on the elimination of tariffs for industrial goods (excluding agricultural products). After discussions by Member States in the Trade Policy Committee on a number of occasions and against the backdrop of the European Council in March 2019 calling for the ‘necessary steps towards rapid implementations of all elements of the US-EU Joint Statement of 25 July 2018’ to be taken, the EU Council voted by qualified majority on 15th April 2019 to approve both negotiating directives. These mandates enable the EU Commission, in consultation with the Member States, to work towards removing tariff and non-tariff barriers to EU-US trade in industrial goods – a key goal of the July 2018 Joint Statement.
The negotiating directives make it clear that agriculture is specifically excluded from these negotiations. This was something I had sought specific assurances on from Commissioner Malmström in Council last year.
I believe a future trade agreement between the EU and US that is targeted specifically at the sectors of conformity assessment and the removal of tariffs on industrial goods, coupled with the lifting of current US tariffs on steel and aluminium products, would be a positive development for our economy and for jobs. In this regard, a recent economic analysis released by the EU Commission found that a targeted EU-US agreement eliminating tariffs on industrial goods would increase EU exports to the US by 8% and US exports to the EU by 9% by 2033. In this context, where Ireland and the US have a bilateral trading relationship worth more than €100 billion per annum, the potential gains for Ireland, and resultant employment, from an EU-US trade agreement would be very positive.