'Toxic' Mercosur deal inches towards agreement with beef talks this weekend

REUTERS/Bruno Kelly
REUTERS/Bruno Kelly

Margaret Donnelly & Anthony Boadle

An IFA delegation will be in Argentina this weekend, as a Mercosur deal is expected to be signed off between the South American Mercosur bloc countries and the EU.

South America’s Mercosur trade bloc is confident a framework agreement with the European Union will be announced next week despite resistance from farmers in Europe to permit tariff-free beef imports, a Mercosur official said this week.

The farm organisation has has called the trade negotiations with Mercosur “toxic” and said the European meat market is being sacrificed for the sake of a deal with the South American bloc.

An IFA spokeperson confirmed that IFA President Joe Healy will travel to Argentina for WTO talks at the weekend and ahead of the talks, he reiterated his total opposition to any Mercosur deal.

Healy met last week with senior EU Commission officials in Brussels, including with the Chief EU negotiator on the deal, Sandra Gallina, DG Trade.

The IFA President said Irish and European beef farmers are very angry at the way they are being sacrificed in Mercosur and there is bad blood over the excessive offer of an additional 70,000t TRQ offered by the EU.

Joe Healy said Irish and European farmers are required to meet the highest food safety and environmental standards in the world. “It is a total contradiction of European policy that Trade Commissioner Maelstrom is now willing to cut a deal for more beef imports from Brazil and sacrifice sustainable production in Europe.”

He said Irish beef production is four times more carbon efficient than Brazil where growth is driven on the back of destruction of the rainforests.

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“There is more than a 70pc chance of reaching a deal,” said the official close to the negotiations that have dragged on for almost two decades. He asked not to be named due to the sensitive stage the negotiations are at.

The EU-Mercosur accord would be announced on the sidelines of next week’s World Trade Organization meeting of ministers in Buenos Aires and could be signed in mid-2018 once all the legal technicalities have been checked, he said.

Negotiators exchanged improved offers in Brussels on Tuesday, though they did not include new offers by the EU for access for South American beef and ethanol, the biggest hurdles to an agreement.

Those offers will be made in Buenos Aires, most likely on Sunday before the WTO meeting gets off, the official said.

Mercosur members Brazil, Argentina, Paraguay and Uruguay are pushing for an improvement on the EU offer of tariff-free imports for 70,000 tonnes a year of beef and 600,000 tonnes of ethanol a year. They complain that it is lower than the 100,000t offer the EU made in 2004, though EU negotiators say Europeans eat less meat today.

“I‘m pretty confident that things are on a good track,” the Mercosur official said. “Beef and ethanol will be tough issues for ministers next week but finding quotas for both is not beyond reach.”

He added, however, that he did not expect Mercosur would be willing to close at anything below 100,000t of beef.

Failure to end the battle over beef has threatened to push the trade talks beyond a year-end deadline and lead to further years of delays.

EU Trade Commissioner Cecilia Malmstrom said on Tuesday that the parties are close to an agreement.

“We are committed to doing this as soon as possible because we are almost there and because there is a momentum and because next year, if it drags on too long, there will be election campaigns and we will risk losing that momentum,” she said.

Resistance to South American beef imports has come from farming countries such as France, Ireland and Poland. French President Emmanuel Macron has said France was in no hurry to reach a deal with the Mercosur.

The Irish Farmers’ Association has called the trade negotiations with Mercosur “toxic” and said the European meat market is being sacrificed for the sake of a deal with the South American bloc.

Brazil’s powerful farm lobby CNA refutes that claim.

“Our beef exports to the EU are only 5 percent of the European market. It is hard to believe that this can prevent an agreement,” said Ligia Dutra, the CNA’s head of international relations.

Dutra said other European farm sectors have much to gain from a deal that will have mutual benefits for both sides.

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