EU to drop beef deal with South America

The EU is set to withdraw a series of tariff concessions on beef and other imports from its proposed trade deal with South America. This follows pressure from a number of EU states, led by France and Ireland, which fear that the opening up of the EU market to cheaper food from Brazil and Argentina would disadvantage their farmers.

European Commission sources said a more favourable tariff regime for beef and ethanol imports had been removed from a draft offer expected to be sent to Mercosur, South America's largest trading bloc, next week. Both sides are scheduled to exchange formal offers next week after more than a decade of stop-start negotiations.

The deal, which encompasses €115 billion in annual trade, had been expected to include a new tariff rate quota for beef imports from Mercosur of 78,000 tonnes, on top of the preferential 275,000 tonnes access it already receives.

However, European farmers fear they would be unable to compete with Argentina and Brazil, two of the world’s largest beef exporters, even with import tariffs.

Negotiating position

EU commissioner for trade Cecilia Malmström and commissioner for agriculture Phil Hogan are understood to have agreed changes to the EU’s initial negotiating position at a meeting last Friday. This followed heated exchanges at a meeting of the EU’s trade policy committee the previous day, where 14 delegates criticised the timing of the negotiations, which coincide with crashing commodity prices and falling farm incomes.

Ireland, which exports more than 90 per cent of its beef output to Europe, is vulnerable to competition from South America. The Irish Farmers’ Association (IFA) welcomed the removal of some sensitive products, particularly beef, from the offer.

Grave concerns

IFA president Joe Healy said the association had raised grave concerns over the inclusion of beef in the commission’s draft offer and had taken up this matter directly with acting Taoiseach Enda Kenny and Minister for Agriculture Simon Coveney.

“Any negotiating strategy based on concessions on sensitive products, including beef, is totally flawed, and this is clear from the growing opposition that had emerged to the inclusion of beef among 20 member states at the EU Farm Council,” he said.

Mr Healy said the government must make it clear in Brussels that there is no justification for reintroducing beef into the Mercosur talks.

The president of the Irish Creamery Milk Suppliers Association, John Comer, also welcomed the EU’s reported withdrawal of its original Mercosur offer. He said that, if confirmed, it represented “very welcome news for Ireland’s hard-pressed farming sector, who would have been left fighting to keep our beef export markets in the face of cheaper South American imports farmed in an environmentally unregulated fashion”.