The Irish Times view on the Mercosur trade deal: the EU puts down a marker
The trade deal between the EU and Mercosur countries in South America is noteworthy for its scale and timing. It creates a market straddling the Atlantic of close to 800 million people. In terms of tariff reduction alone, it is the largest deal ever struck by the EU, but its scope goes far beyond lifting tariffs. It includes access to public procurement contracts, protection for regional food specialities and greater freedom to provide services.
Opening up EU markets to beef from Brazil, Argentina, Paraguay and Uruguay was apparently a sweetener that got agreement after 20 years of negotiations over the line. Some 99,000 tonnes of beef will be on EU supermarket shelves in eight years time – Mercosur sought 350,000 tonnes.
In Ireland, fallout has been concentrated on that concession amid accusations by farmers of a “sell-out”. In crude terms, however, the share represents a mere 1.2 per cent of EU beef production based on 7.2 million tonnes produced in 2017, though Mercosur could attempt to put competitive pressure on EU member states by concentrating on more expensive meat cuts.
The beleaguered Irish beef sector faces many challenges and too many family farmers are struggling to earn a decent living, which requires a fundamental redirection of Irish agriculture. But, compared to the potential damage to the beef industry from a hard Brexit, Mercosur is a side-show. Moreover, the deal under agrifood alone goes far beyond beef.
So the Government should temper its response, as the deal will open many Irish businesses to what amounts to the fifth largest economy outside the EU. It should concentrate on opportunities for many Irish companies.
Separately, however, there are potential downsides that cannot go unaddressed. A hard look at its robustness in relation to food safety is essential as Brazil, in particular, has a reputation for lax standards and meat fraud. Most importantly, climate commitments underpinning the deal must be deliverable. Beef production has become a major driver of tropical deforestation and most blame attaches to Brazil. President Jair Bolsonaro, a climate science denier, has shown little inclination to reverse the trend though the European Commission insists the deal is “contributing to sustainable production”. EU countries including Ireland are committing to achieving net-zero carbon by 2050, but this will prove meaningless if the planet’s greatest carbon sink is destroyed.
Politically, the EU has put down a marker of immense significance, suggesting the international trading system will endure, despite US protectionism and Chinese state-backed capitalism. It has got first mover advantage, but all could unravel without rigorous enforcement and an immediate end to rampant deforestation across much of South America.