Trade deal with Mercosur is No. 1 priority: EU trade chief

Trade Commissioner Cecilia Malmstrom
Trade Commissioner Cecilia Malmstrom

Philip Blenkinsop and Ciaran Moran

Sealing a free trade agreement with South American bloc Mercosur after 20 years of talks is the European Union’s top priority, EU trade chief Cecilia Malmstrom said on Thursday.

EU negotiations with the Mercosur group of Argentina, Brazil, Paraguay and Uruguay, the world’s fourth-largest trade bloc, have intensified since Europe’s trade talks with the United States were frozen after Donald Trump’s 2016 presidential election victory.

However, EU nerves about a surge of beef imports and Mercosur hesitation about opening up some industrial sectors, such as cars, have meant past deadlines have come and gone. A deal may be close, but just beyond reach.

European Trade Commissioner Malmstrom said she did not want to specify a new deadline, but believed an agreement could be struck during the term of the current European Commission, which runs until the end of October.

“There are some complicated matters remaining - agriculture and a few others ... I think there is a window now to close this, during this Commission. I will absolutely do my utmost. This is priority number one right now,” she told an event hosted by the Bruegel think-tank in Brussels.

Malmstrom said the two sides were getting closer, with offers exchanged already on less controversial farm products.

In terms of tariff reduction, it could be the EU’s most lucrative trade deal to date, with the savings potentially four times greater than for deals with Canada and Japan combined.

“It would be an extremely powerful signal ... For economic reasons, strategic reasons, and political reasons everything speaks in favor of this,” Malmstrom said.

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Brazilian President Jair Bolsonaro said a week ago that Mercosur would soon sign a trade deal with the EU.

Untold damage

IFA President Joe Healy has called on the Taoiseach Leo Varadkar to intervene at the highest levels in Brussels to stop the EU-Mercosur trade deal, which he says would do untold damage to Ireland's €3bn beef and livestock sector.

He has said “In view of the major Brexit implications overhanging the Irish and EU beef sector and the environmental degradation associated with Brazilian beef exports, it would be reckless to support a Mercosur deal”.

Joe Healy said he has written to the Taoiseach requesting him to make it clear in the strongest possible terms to EU Commission President Jean Claude Juncker that Ireland would not be prepared to ratify a deal which will severely damage our vital national interest in beef production.

"For the EU Commission to ignore the Brexit implications for beef and proceed with a Mercosur deal to import more Brazilian beef is highly irresponsible."

He said a no deal Brexit would take the EU beef sector from 102pc to 116pc self sufficiency, with disastrous consequences for beef prices and farm incomes. This would be further compounded with any increase in imports from Mercosur.

“How can the Commission ignore the fact that in Brexit the UK could impose tariffs as high as €850m pa on Irish beef and possibly the closure of market access for over 290,000t of our beef exports?

"The EU Commission Joint Research Centre conducted an assessment on the cumulative impact of trade deals which showed that increased imports from Mercosur could cost the EU beef sector €5bn to €7bn pa," he said.

In terms of climate change, the IFA President pointed out Irish beef production systems are 4 times more carbon efficient than South America, where increased exports are driven on the back of deforestation of the Amazon rainforests.


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