Dan O'Brien: 'We should be singing the praises of a beef deal that highlights the huge benefits of a free-trade model - and offers the choice of cheaper prices for those in need'

Dan O'Brien

Dan O'Brien

Should you be free to choose whether to buy an Irish steak or a less expensive Argentinian one? Is it right that consumers of food, which includes everyone, pay more for their grocery bills so that the minority of people who produce food are heavily subsidised? Is it a good thing that Ireland, as one of the most trade-dependent countries in the world, is to get better access for its businesses to a market of 300 million people?

These questions have not been posed much over the past week.

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The national debate following the announcement last Friday that barriers to trade between Europe and four South American countries could be lowered, has been overwhelmingly negative and defensive.

This is astonishing in a number of ways. For the past three years there has been near universal agreement in Ireland that for Britain to put up trade barriers would be bad for this island.

That consensus includes the farming lobby, which has been out in force complaining about the lowering of trade barriers with South America this week.

Despite Brexit bringing home the importance of the free exchange of goods and services, the vast majority of the discussion around last Friday's draft EU-Mercosur trade deal has been hostile. Focus has been almost entirely on the potential negative aspects.

As often happens in Ireland, producer interests get priority over consumer interests.

Even in his defence of the new trade deal in these pages on Tuesday, Phil Hogan, the EU's agriculture commissioner, did not mention the gains for consumers. Let's recall that food prices in Ireland are a fifth higher than average across the EU and that EU food prices are higher than they need to be because consumers don't have a choice to buy cheaper non-EU food.

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This disproportionately affects people on lower incomes who spend more of their incomes on food.

If the deal with the four South American countries enters into force, it would allow grocery shoppers have more choice over whether they want that Irish steak or the cheaper Argentine one.

Over the past week this upside of the deal has got little airing by anyone, including from the hundreds of charities that exist to help the less well off.

Many of these organisations are very effective in how they lobby for their cause. They are also vocal in seeking more taxpayers' money for their work. That they have had nothing to say in support of a deal that would benefit those they exist to help is curious.

An aspect of the deal that the farming lobby has been quick to jump on is food standards.

From some of the claims made one might think that eating a Brazilian barbecue is as dangerous as drinking an arsenic-laced caipirinha cocktail. To see why the food safety claims don't stack up, consider children's toys.

If you have a teddy bear close at hand take a look at the label. It will almost certainly show that the cuddly toy was made outside the EU.

But regardless of where it was made it will have the European "CE" stamp on it. That is because all kids' toys that come into Europe have to be manufactured to standards set in Europe. Factory managers across the world have thick manuals of EU specifications.

Their toys are subject to regular checks and testing when they arrive in the EU. If they don't meet agreed standards they don't come in. It's as simple as that.

Just as factories across the world must meet these standards if they want to sell toys into the huge EU market, under the deal with the four countries of Mercosur - Argentina, Brazil, Uruguay and Paraguay - their producers will have to meet EU food standards to sell into the EU.

It should also be said that the origins of the products will be clearly labelled that they don't come from the EU. If consumers want Irish meat, the choice will still be theirs.

If it is understandable that protected sectors lobby hard to keep up their barriers to competition, it is less understandable that there are so few voices in favour of the freeing of trade with as massive a market as Mercosur.

Ireland has become one of the most successful trading nations in the world not only in goods, but even more so in services - as Phil Hogan pointed out on Tuesday, Ireland ran a €1bn trade surplus in services with Mercosur last year.

Taking down barriers to Irish exporters selling into that huge market provides new opportunities for companies based here. The absence of pro-free trade voices over the past week is all the more remarkable given our history. After Ireland's exit from the UK almost a century ago, successive governments put up barriers to trade. Consumers were forced to buy Irish-made goods. The hope was that Irish companies would grow if consumers had no choice but to buy their products.

The plan failed abjectly. Successful, competitive businesses were few and far between.

Instead of becoming strong and competitive, producers sat back and fleeced consumers safe in the knowledge that they would not have to face foreign competition.

By the 1950s, when most of the rest of free Europe was opening up to trade and enjoying explosive economic growth, the closed Irish economy was in crisis. It was doing so badly that emigration rates hit levels not seen since the times of the Great Famine.

The anti-free trade model was tested to destruction and beyond. Only when there was no alternative was a U-turn performed.

The lowering of barriers to cross-border commerce from the 1960s has been a remarkable success. Even accounting for the self-inflicted slumps of the 1980s and the property bubble of the 2000s, Irish prosperity levels have caught up with those of our peers and by some measures overtaken them.

In a country that has got rich from trade, after enduring decades of relative poverty by erecting barriers to trade, there should be no EU country more supportive of doing away with the sort of protectionism that has failed us so badly before.

Irish Independent


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