Any illusions I might have had about the waning influence of Irish farming were quickly disabused when I arrived in Brussels in the mid-1990s to report for this news organisation on the Republic’s relationship with the European Union. No door, it appeared, was closed to, or approach rebuffed from, the indefatigable Irish Farmers’ Association lobbyists or the local Department of Agriculture officials. They had the private ear of commissioners, of Irish ministers ever-eager to fight their corner, and plenty of friends at court.
Moreover, despite agri-food’s relative decline in economic terms, employing just 173,000 people now or 7.7 per cent of employment, the farm lobby still punches well above its weight. It is a clout that is well-illustrated by the political unanimity over opposition to the impending EU ratification of the controversial Mercosur trade accord, finally agreed in December with Argentina, Brazil, Paraguay and Uruguay, after 25 years of talks.
The free-trade accord would create a common market of nearly 800 million people, accounting for one-fifth of global gross domestic product, and is seen as crucial to the union in advance of the return of Trump and his promised tariffs. It is the biggest trade deal ever negotiated by the EU, with the potential to cut import tariffs of more than €4 billion on EU trade with the Mercosur economies. The main beneficiaries — the automobile and services sectors.
The problem is beef. The EU imports some 200,000 tonnes of their beef and the deal will mean increased imports corresponding to about 0.7% of total European Union beef production
Mercosur accounted only for 0.6 per of global Irish exports and 0.3 per cent of our imports in 2018, but a study for the Department of Trade indicates the deal holds the potential to increase Irish manufacturing exports by €1.4 billion.
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The problem is beef. The EU imports some 200,000 tonnes of their beef and the deal will mean increased imports corresponding to about 0.7 per cent of total European Union beef production. This fairly modest rise in imports will, however, be concentrated on high-quality cuts likely to displace some Irish beef in the EU market.
“For the Irish beef sector, ” the report notes, “an upper end estimate of the impact on production is a 0.08 per cent reduction in output. Taking price and quality impacts into consideration, lower production would translate into a marginal reduction in the value of Irish beef output of around €50 million, compared to the total value of Irish beef output of €2.3bn [in 2019].”
Prices for farmers in this State are unlikely to be affected, he says, as those exporters will simply use the access at reduced tariffs to take extra profits
The result is likely to be far from the cataclysm for Irish farmers they predict. Leading agriculture economist Prof Alan Matthews reassures: ”Beef farmers can relax”.
He argues that the likely substantial substitution by Mercosur exporters of cattle from designation under existing high-tariff quotas to the new quotas will result in as little as 10,000 tonnes of new beef coming to the European Union. Prices for farmers in this State are unlikely to be affected, he says, as those exporters will simply use the access at reduced tariffs to take extra profits.
Concerns by environmental campaigners that the deal will accelerate Amazon deforestation and climate damage have also been met in the final agreement, with enforceable provisions on labour standards and compliance with the Paris Climate Accord of 2015, a new sort of conditionality only to date written into the EU’s trade agreements with the United Kingdom and New Zealand.
Matthews argues that the level of deforestation resulting from increased exports is also very much dependent on who is in power in Brazil, with the current Lula government showing a much greater determination to save the rainforest.
Ambiguity is the order of the day — although all the parties, from Fine Gael and Fianna Fáil to Sinn Féin and the rural Independents adamantly opposed the deal during the election
Now the deal needs to be ratified by EU member states and a powerful lobby, led by the French, only needs a blocking minority, four countries, representing at least 35 per cent of the EU’s population, to hold it up. So far they are assured of the Poles, Austrians, and, Paris hopes, an unreliable Italy, whose far-right government has said it is opposed but is anxious to ingratiate itself with Brussels.
The Irish Government has long opposed the deal, particularly its provisions on beef, but is playing its cards close to its chest on the final vote, pleading a need to further analyse the final text. Cynics suggest that Dublin, preferring to let someone else fight the battle, accepts Mercosur’s overall benefit to the Irish and EU economies, but is reluctant to alienate the farm lobby by supporting the treaty.
Ambiguity is the order of the day — although all the parties, from Fine Gael and Fianna Fáil to Sinn Féin and the rural Independents adamantly opposed the deal during the election.
What price the Republic’s much-vaunted enthusiasm for international free trade, supposedly the cornerstone of our economic policy? There are always winners and losers in any free trade agreement, but Is the Mercosur accord really to be brought down at the behest of the powerful farm lobby’s limited sectoral interest?