The Mercosur deal: What it is, whether it’s a done deal, and why it matters to Leitrim farmers

The European Parliament will ultimately have the final say on the Mercosur trade deal, but this week it has an opportunity to derail the agreement that will affect Leitrim beef farmers before it ever reaches a final vote.

The deal was ratified by a majority of the governments of EU member states earlier this month, despite Ireland voting against the agreement. It was then signed by the EU and Mercosur countries over the weekend.

However, it is not a done deal yet.

Long term, it would need to win a vote in the European Parliament later this year, in May at the earliest, before it becomes a reality.

In the short term, it must survive a resolution in the European parliament on Wednesday that, if accepted, would see the deal sent for legal review and effectively put on Ice until 2028.

What is the deal?

The deal, which has taken 25 years of negotiations to get to this point, would see the removal of around 90% of the tariffs that currently exist on imports from South American countries, including Argentina and Brazil.

Growing global instability due to rumbles of a trade war with the US to the west, real war with Russia to the East, and an inability to break the Chinese tech market meant the EU pursued negotiations at a growing pace in the past year in the hopes of building security alternative trading partners.

The deal would create a 700 million-person free trade zone between the two blocs, which would be phased in over the next 10 years, with specific tariffs and limits being put on the imports of specific products.

EU industries such as cars, machinery, chemicals, and pharmaceuticals from the EU will benefit substantially from the tariff reductions. 

For those in agricultural sectors, it will pose an unwelcome challenge to their livelihoods and to some, a betrayal by the EU.

Beef

Irish farmers, along with their EU counterparts, have argued that the deal would allow cheaper beef that is not made with the same standards as EU beef to be sold and undercut domestic farmers.

Under the agreement, tariffs on beef imports from Mercosur countries will drop to 7.5%, and they will be permitted to sell up to 99,000 tonnes to the EU at that rate, 55,000 tonnes for fresh beef and 44,000 tonnes for frozen beef, which represents about 1.6% of EU beef consumption.

Irish beef is produced to a high standard in line with strict EU regulations, which do not apply in the Mercosur countries. 

The EU has said the same standards will apply to beef bought from South America; however, farmers are not convinced, as shipments of such beef to Ireland were turned away due to the use of illegal hormones in recent months, according to the IFA.

Thousands of farmers turned out to Athlone and Brussels earlier this month to protest the deal, which has been largely condemned across the Irish political system since it was passed by the member states.

Legal challenge

The resolution that will be before the European parliament on Wednesday will look to have the deal put before the European Court of Justice for a legal review, which would take between 18 and 24 months.

More than 145 MEPs have declared their support for the resolution, though this remains well short of a majority in the 720-seat parliament.

Sinn Féin has called on Irish MEPs to back a resolution which would effectively put the deal on hold pending a legal review by EU judges.

According to a report in Agri-Land, only two of Ireland’s 14 MEPs have said they will support the Mercoser deal when it is put to a vote- neither of which are representing Leitrim.