Trade showdown looms
TRADE TALKS with the South American Mercosur bloc have reached a critical point as farm groups fear beef, sugar and ethanol are being sacrificed for the sake of a quick deal.
Agriculture chief Phil Hogan flew to Buenos Aires last Friday to try to keep a lid on agricultural import quotas, but there was no progress in negotiations by Monday.
Trade commissioner Cecilia Malmström is keen to ink a deal as soon as possible, which would likely entail a bigger beef offer than the 70,000 tonnes currently on the table.
And the Commission has also been warned on its sugar and ethanol offers, with farm lobby Copa and Cogeca saying EU farmers can’t compete with their Mercosur counterparts given the “sophisticated” domestic subsidy schemes in place. Mr Hogan is in Buenos Aires to participate in the World Trade Organisation’s ministerial conference, where a joint EU-Brazil proposal on domestic support in agriculture will be discussed. Irish Farmers’ Association president Joe Healy, who was in Buenos Aires for the WTO meeting, said that a surge in beef exports would cripple the Irish beef sector as it grapples with Brexit. He said the current offer was “excessive” and that EU trade chief was “willing to sacrifice the beef sector to secure a deal at any costs”. Last year, a European Commission report found that a boost in Mercosur beef imports would slash EU beef prices by up to 16pc, costing produc- ers around €5bn a year. And European meat producers say Brexit will lead the EU’s remaining members to 116pc self-sufficiency in beef.
Meanwhile, the Commission has celebrated the formal signing of a trade deal with Japan, which reduces tariffs on a large range of alcohol, dairy and meat products.
It eliminates duties on processed pork, and cuts duties on fresh pork meat exports. Tariffs on beef will be cut from 38.5pc to 9pc over 15 years for number of beef products.
It also scraps duties on cheddar (currently at 29.8pc) and increases quotas for EU exports of malt, potato starch, skimmed milk powder, butter and whey.
Mr Hogan said it was “the most significant and far reaching deal ever concluded by the EU in agri-food trade”.
The deal has yet to be approved by MEPs and EU governments, while a chapter on dispute resolution between companies and governments — which threatened to derail a previous deal with Canada — has yet to be worked out.