Coveney ‘shock’ over EU-Mercosur deal

AGRICULTURE Minister Simon Coveney has expressed “shock” at EU trade talks with South America which could cost European farmers €3 billion between now and 2020.

A private document by the EU’s Joint Research Centre (JRC), seen by the news agency Reuters, advises that 33,000 farm jobs could be lost in Europe if it approves the draft EU-Mercosur deal in its current format.

The JRC’s report to the European Commission predicts the worst losses would be felt by beef producers in Ireland, Britain and France. In its present form, the deal would see a 200,000-tonne annual increase in beef imports into the EU from Argentina, Brazil, Paraguay and Uruguay.

Minister Coveney said: “The initial presentation from the EU Commission is quite shocking and confirms the point I have been making for the past number of weeks that a Mercosur deal would damage EU and Irish agriculture. Ireland cannot allow the Irish and European agri-food sectors to be sacrificed to get a trade agreement.

“Though the initial analysis shows an overall benefit to the EU from such a deal, the results across all agriculture sectors are negative and the implications for the beef sector and for Ireland are particularly damaging.”

Minister Coveney said he wanted the Commission to produce the full impact assessment as a matter of urgency. He said this would have to be debated thoroughly within the EU Agriculture Council and directly with the Commission.

The present EU-Mercosur talks were relaunched last year with the aim of creating the world’s biggest free-trade zone, with 750 million people and trade in goods and services worth €84bn in 2010. The talks had stalled in 2004.

Analysts agree that any deal is likely to see Europe open its markets to South American agricultural imports in return for greater access to Mercosur’s markets for services and goods such as cars.

However, the talks face strong opposition from European governments such as France and Ireland, where influential farming groups have warned that an increase in cheaper food imports could put many EU producers out of business.

The JRC’s leaked report will add fuel to this resistance. By 2020, the study predicts that EU beef production would fall by over 150,000 tonnes a year, with producer prices for the meat falling by nearly 8%.

The study’s authors state: “The overall impact of a possible EU-Mercosur free trade agreement on the EU agricultural sector is negative, but the intensity of the effects considerably varies across agricultural products (and) regions.”

Ireland would see its annual farm revenues fall by more than 4% in 2020, due to the high share of beef production in overall farm output, while farm income in Britain and France would fall by 3% and 2% respectively, the study showed.

EU cereal exports to the four Mercosur countries would increase by about one million tonnes a year by 2020, while the deal would have little impact on EU sugar production or prices, the authors said.

The Commission’s trade department argues that an EU-Mercosur trade deal would deliver net economic benefits worth about €4.5bn a year to both regions.