Business Irish

Thursday 18 October 2018

Irish farmers set to milk benefits of EU trade deal with Mexico

Last year, Ireland exported over €40m of Irish dairy to Mexico, including cheese, milk powder, and specialised nutrition products. Stock photo
Last year, Ireland exported over €40m of Irish dairy to Mexico, including cheese, milk powder, and specialised nutrition products. Stock photo
Ellie Donnelly

Ellie Donnelly

A new trade deal between the European Union and Mexico could help Ireland's agri-food sector diversify as Brexit looms.

Under the agreement, reached last Saturday, practically all trade in goods between the EU and Mexico will now be duty-free, including goods in the agricultural sector.

The agreement, which will secure considerable volume for milk powder exports, starting with 30,000 tonnes from entry into force, and rising to 50,000 tonnes of milk powder exports from the EU after five years, is expected to bring benefit for Irish dairy farmers, with the industry in Ireland currently exporting 90pc of its produce.

Conor Mulvihill, director of Dairy Industry Ireland, said the deal was a "rather unexpected development" and represents a "massive positive" for the agricultural sector in Ireland.

"Certainly, for the Irish dairy industry it represents another piece of the jigsaw for our Brexit diversification strategy," said Mr Mulvihill.

"While details of the deal are still to emerge, this should be of benefit to deliver for our farmers and our export-dependent industry."

Mr Mulvihill described the deal as a "total coup" for the EU Commissioner for Agriculture, Phil Hogan, and the EU as a whole.

"Mexico was focused on Nafta (North American Free Trade Agreement), but the deal occurred due to a combination of good diplomacy and Mexico saying to the US 'we have other trading partners'," Mr Mulvihill said.

Last year, Ireland exported over €40m of Irish dairy to Mexico, including cheese, milk powder, and specialised nutrition products.

"We expect that this deal will give us the potential to grow that substantially into a country that is adding one million people a year to the population, as well as having an expanding upper and middle class," Mr Mulvihill said.

The deal also allows for the EU to "substantially" increase its pork exports to Mexico, with duty-free trade for virtually all pork products.

Mr Hogan described it as very positive for the agri-food sector, "creating new export opportunities for our high-quality food and drink products, which in turn will create and support more jobs and growth, particularly in rural areas".

Commissioner Hogan went on to say that the agreement proved "yet again" the value of the EU leading from the front globally in promoting open and rules-based trade.

The agreement is also set to ensure the protection from imitation for over 300 distinctive European foods and drink products in Mexico, with so-called geographical indications, such as Comté cheese from France, Queijo São Jorge cheese from Portugal, and Szegedi szalámi from Hungary.

This means that EU producers of traditional delicacies are not struggling against copies.

Since the previous EU-Mexico trade agreement came into force in 2000, trade between the EU and Mexico has risen at a rate of around 8pc per year.

This has resulted in an overall increase of 148pc in trade in goods over the period, according to figures from the European Commission.

"Despite these positive results, there was still a wide margin for improving the trade relationship that the new agreement is addressing, by making virtually all trade in goods duty-free," the Commission said.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business