After 25 years of negotiations, the Mercosur trade deal between the European Union and countries in South America is almost over the finish line.
To take effect, it needs to be ratified by a qualified majority of EU member states – at least 15 countries that collectively make up at least 65 per cent of the population.
Securing that support is proving challenging, however, mainly because of fears over the potential impact on European farmers.
Ireland and France are among the countries most vocal in opposition.
RM Block
The deal with the EU applies to Brazil, Argentina, Uruguay and Paraguay.
Brazil and Argentina are the biggest countries in the region and the market for EU exports would be lucrative.
The Mercosur deal would reduce the high tariffs on machinery, IT and communications equipment, textiles, chocolate, spirits and wine, cutting prices for South American consumers.
However, these countries are also major producers of beef which Irish farmers fear would come into the EU at cheaper prices because of reduced import tariffs at the European end, and economies of scale, weaker food quality and environmental regulations at the South American end.
The EU has moved to counter these concerns, stressing only 99,000 tonnes of Mercosur beef – about half the volume imported into Europe annually – would qualify for the lower tariffs.
Irish farmers, however, are getting good prices for beef for the first time in many years, and do not want anything to jeopardise that.
[ Opposition to Mercosur trade deal waning as crunch EU vote approaches Opens in new window ]
They also fear for their long-term viability if they are perpetually at risk of being undercut from overseas.
The European Commission has offered to insert a safeguard clause to be activated if import prices fell 10 per cent below domestic prices and imports increased by more than 10 per cent.
An investigation would begin and if EU farmers were found to be adversely affected, the lower tariffs could be suspended.
Farming organisations say at that point the damage would already have been done.
Emergency financial support – a Unity Safety Net – has also been promised to help farmers if a crisis develops but that has also failed to win the sector over.
Farming groups – backed by environmental and climate experts – are also concerned about agricultural practices and standards in South America.
Rainforest clearance for livestock, greater pesticide use, animal welfare standards and labour rights violations have all been highlighted.
The commission says imports will have to meet EU production standards and that audits will take place at the source to ensure traceability of produce and compliance with regulations.
It has also been at pains to say that European dairy and grain producers could benefit greatly from new markets in South America.
Still, Irish farming organisations remain opposed to the deal and they have political backing.
In the Programme for Government, the Coalition pledged to: “Work with like-minded EU countries to stand up for Irish farmers and defend our interests in opposing the current Mercosur trade deal.”
With 20 years’ work at stake, there is speculation that the commission will pull something else out of its incentives drawer.
There is some talk that Ireland might be swayed if, say, the application for extension of the nitrates derogation – currently looking very doubtful – was to be granted.
Or if a proposed new approach to accounting for methane emissions – which would allow for lower emission reduction targets for agriculture – was to be approved.
It is not clear, however, that after successfully securing a deal with the governments of 270 million people overseas, the commission is in the mood to be held to ransom in its own backyard.
The Department of Foreign Affairs and Trade did not comment on whether there were new conditions under which Ireland would accept the deal.
“Throughout the negotiations of this agreement, the Government made clear to the commission Ireland’s key requirements in regard to the deal,” a spokesperson said.
“We repeatedly raised concerns in relation to our priority areas of climate, biodiversity, deforestation, as well as protections and assurances in regard to incomes of farmers in Ireland.
“The Government is carefully assessing the EU-Mercosur package in its entirety to understand if our concerns with the agreement have been adequately addressed.”
