Fears Mercosur could cost Irish beef sector up to €130m
Foreign ministers and delegates attend the opening session of the LXV Mercosur Summit in Montevideo on December 5, 2024. Picture: Nicolas GARCIA / AFP via Getty Images
The Mercosur Trade Agreement is predicted to cost the EU Beef Market around €1.3bn loss in value and have a disproportionate impact of €100-130m to the Irish beef sector, according to Meat Industry Ireland.
MII, the Ibec sector association representing beef, pork and lamb processing members, warned the agreement, if ratified, would open access for a further 99,000t of high-value steak cuts into the EU market. It will also lead to tariff reductions, in perpetuity, for the Mercosur beef exporters in the order of €400m a year.
Speaking at Friday's Bord Bia meat marketing seminar, Dale Crammond, director of MII, said: “Meat Industry Ireland beef members remain extremely frustrated. Once the deal is fully phased in, Mercosur exporters will have additional market access of 99,000 tonnes and will be better off to the tune of €400m per annum. These impacts will be felt across the entire supply chain and are in addition to the well-publicised differences in production, sustainability and traceability standards between the EU and the Mercosur region.
"Not only would this €400m be a significant loss of tariff revenue for the European Commission, which could be used to part fund the next CAP, it will also have a very significant impact on the EU beef market. An analysis carried out by MII indicates that once the proposed Agreement is fully phased in, the annual reduction in EU beef market output values will be approximately €1.3bn, with a disproportionate impact of an estimated €100-130m to the Irish beef sector because of its very high export-dependence on other EU markets. This equates to a loss of €75 to €95 per head based on our prime kill.”
These impacts would arise from South American beef exporters increasing their overall share of the EU market by leveraging their increased quota access and from the windfall tariff reduction gains. As there are no volume limits in the Agreement, Mercosur countries can continue, as they do today, to selectively target the high-value steak market in Europe by paying the full out-of-quota tariffs and still land products into Ireland’s main EU markets at cheaper prices.
Mr Crammond warned there was no safeguard in place to ensure a more balanced range of carcass cuts, and said he believed there was "still time" to engage politically with EU leaders to stop the formal ratification of the agreement.
IFA president Francie Gorman said the analysis by MII backs up the concerns raised by beef farmers here and across Europe.
“The new Government needs to hit the ground the running to block this flawed deal,” he said. “Our MEPs will also have an important role here. Given the critical importance of our livestock sector to the rural economy, we expect them to resolutely oppose the deal."
