EU Mercosur Trade Deal – Damaging for European Producers and Consumers
A EU/Mercosur bilateral trade deal will seriously damage European and Irish agriculture and in particular the important beef and livestock sector.
The severe negative implications for European agriculture from a Mercosur deal are very substantial, with losses estimated at up to €36bn, depending on import volumes, while the possible benefits to other sectors are not at all evident.
The implications for producers and consumers in terms of food security, price stability and future EU beef production are very serious. A bilateral deal with the Mercosur group would mean that the EU would be effectively abandoning community preference for its 500m consumers and exposing the EU to the vagaries of world commodity markets and prices, inferior standards and unstable supplies. Such a move would seriously undermine the Common Agricultural Policy.
It is estimated that a EU/Mercosur deal could reduce Irish beef prices by at least 30% or €1.00/kg, which would inflict losses of up to €500m in Ireland alone.
The Irish Agra food sector accounts for 60% of exports from Irish owned companies, valued at €8bn p.a. and provide up to 250,000 jobs or 20% of all jobs outside greater Dublin.
With an output value of €2bn., including beef exports of 500,000t and live cattle exports of 300,000 head; the beef and livestock sector employs over 120,000 people including farmers.
Given the importance of agriculture and beef and livestock in the Irish economy, any negative impact from a EU/Mercosur trade deal would seriously damage Ireland’s economic recovery and inflict major job losses at farm and industry level across rural areas.
Negative Impact on EU Beef Market and Steak Market
A major reduction or elimination of import tariffs and/or a significant increase in a tariff free quota (TRQ) for beef, as demanded by the Mercosur group, would significantly cut the EU import price for beef. This in turn would severely damage beef prices on the EU market, particularly for an export country like Ireland.
It is clear any new tariff rate quota (TRO) to Mercosur will be used to import high value steak cuts. Of the total 8 million tonne EU beef market, high value steak cuts account for only 560,000t. While steak cuts make up a small percentage of the carcase volume, they can account for up to 40% of the carcase value. Therefore any increase in the volume of steak imports from South America would have a very disproportionate negative impact on European EU beef prices.
Sustainability and Climate Change
The European and Irish beef and livestock sectors operate to the highest EU standards of traceability, food safety, animal disease and environmental controls.
In Ireland, the sector is based on environmentally sustainable grassland production systems from the progeny of our one million sucker beef cows and one million dairy cows. Sucker beef production is particularly vulnerable to the uneconomic beef prices from a EU/Mercosur deal as it is entirely dependent on beef price and direct payments.
Irish beef production systems are between 2 and 4 times more efficient than South American production in terms of climate change and greenhouse gas emissions (GHG). GHG emissions from imported Brazilian beef are estimated at up to 80kgs CO2-eq/kg, including land use changes (LUC) and 48kgs CO2-eq/kg, excluding LUC. Domestic EU beef production is far more sustainable in terms of carbon and water; with GHG emissions from Irish sucker beef production estimated at 18/22kg CO2-eq/kg meat.
It would be a total contradiction of EU policy on climate change for Europe to agree a Mercosur deal that replaces sustainable EU beef production for European consumers with product from South America, which has a much higher carbon footprint.
It is well established that the growth in South American beef exports and particularly exports from Brazil has come about on the back of widespread destruction of the Rainforest in the Pantanal and Amazon regions.
Amazonian deforestation accounts for over 75% of Brazil’s contribution to Global warming. Amazon deforestation averaged 2.15m hectares per annum (2000 – 2005) with 70% to 80% (1.72m ha/pa) attributed to cattle ranching. This has major ongoing implications in terms of climate change and carbon leakage and a EU/Mercosur deal will only compound this problem.
Reports from the EU Food & Veterinary Office (FVO) highlight the ongoing failure of Mercosur countries including Brazil to meet EU producer and consumer standards on the key issues of food safety, animal identification and traceability, animal health, environmental and disease controls.
Most Mercosur countries do not have a tagging, traceability or movement control system in place for livestock and, as a result cannot guarantee origin or food safety. These countries use branding as the main means of identification, undermining the credibility of any certification process for beef exports into the EU.
Many drugs including some antibiotics and insecticides, which are banned in the EU, are cleared for legal use in some Mercosur countries, with no controls on purchases or withdrawal periods. In addition, many illegal drugs such as hormones and clenbuterol are widely available and used in South American beef production.
With the underlying FMD problem in South America and no effective traceability or movement controls, the disease risk associated with beef imports from Mercosur is unacceptable for the European Union.
IFA Opposition to Mercosur
IFA is totally opposed to a damaging EU/Mercosur trade deal that will impact negatively on Irish Agriculture, damage exports and costs thousands of jobs in farming and industry
IFA is demanding that the Government and all of the political parties outline their strong opposition to a Mercosur trade deal at National and EU level, and protect Irish agriculture, beef exports, as well as economic recovery and thousands of jobs.
Before negotiations proceed any further, IFA is demanding that the EU Commission undertake and publish a detailed analysis, for each sector including agriculture and specifically beef and livestock, of the economic, environmental and social impact of a EU/Mercosur deal.
IFA is calling on our MEP’s and the European Parliament to fully defend agriculture by stopping a damaging Mercosur trade deal in the European Parliament and by ensuring that the EU Commission insist on European standards for all imports and on the protection of the Common Agricultural Policy.
With a growing world population and rising demand for food, the EU must protect Europe’s ability to feed its 500m consumers and not rely on unsustainable imports from volatile international markets.