Farm Ireland

Tuesday 23 January 2018

Officials optimistic South American deal can be sealed

Phil Hogan
Phil Hogan

EU officials are pressing ahead with a trade deal with the South America common market, Mercosur, in the hope that a deal can be done this year.

The EU side is confident it can make an attractive offer on sensitive products including beef, but has insisted there will not be full market liberalisation.

Last year an EU offer that included beef was taken off the table under pressure from EU agriculture chief Phil Hogan and countries including France and Ireland.

Negotiators will hold informal talks in September to discuss a possible exchange of offers, with the next full round of talks due to take place at the beginning of October in Brazil.

A round of talks earlier this month made progress on customs (except anti-fraud), goods - including geographical indications on wine and spirits - sustainable development and dispute settlement.

There were also talks on rules of origin for chemicals and machinery, though the sides are still far apart on textiles.

Public procurement and investor protection are still contentious issues, with Mercosur reluctant to open up state contracts to EU companies, and Brazil particularly wary of the EU's investor court system.

The EU's most sensitive agricultural products - such as beef, ethanol and sugar - were not discussed during this month's round.

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"The understanding with Mercosur is that the time is not ripe to take such a step," Mr Hogan told EU agriculture ministers last week.

"We have already made clear that the EU has strong sensitivities in agriculture which must be respected in a reasonable manner.

"This means that Mercosur needs to moderate its expectations to what is manageable and acceptable to the EU in agriculture."

The EU is seeking market access for its vehicles, chemicals and services, while Mercosur is seeking to increase its exports of beef, ethanol and other agricultural products.

An impact assessment of the EU's recently concluded and upcoming trade deals showed beef farmers were set to be the biggest losers from future accords, particularly Mercosur.

Irish farmers are also under pressure to find new markets for beef, given that Brexit is likely to make exports to the UK more expensive.

EU farming federation Copa Cogeca says the deal will have a negative impact on EU producers as the products both sides are looking to trade are similar.

They are also concerned that high EU health and safety standards could be put at risk by the deal.

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