Chapter 1: What is the significance of the EU/Mercosur trade deal?
Next, though, the trade agreement between the EU and the South American Mercosur countries comes into force today, at least provisionally. Now, business leaders have welcomed the deal's commencement and blasted critics of the pact, saying the downsides have been catastrophised. So is this a good day for Europe or a catastrophe?
I'm joined now by Neil Macdonald of ISME and Francie Gorman, president of the Irish Farmers Association. Good morning to you both. Neil, I might start with you first. You say this is a good day for Europe.
Chapter 2: How do business leaders view the Mercosur deal?
It's a good day for Europe, it's a good day for Irish exporters and it's a great day for Irish farmers. They're now going to have tariff-free access to a market, an immediate market of 280 million people in Brazil, Argentina, Uruguay, Paraguay and Bolivia. And if the manner in which the agreement with Canada, which is now...
In effect, for eight years or so, if that comes to pass with Mercosur, we'll see beef exports rise. And also, you know, other producers, chocolate is going to go tariff free, cheese, baby formula. There are huge opportunities here for Irish exporters. And that's just on produce. We're not even talking about services yet. So this is a great day.
OK, and you claim that the downsides of Mercosur have been catastrophized.
Yeah, I mean, unfortunately, you know, fear is the easiest commodity to sell. It's much harder to relate to people about hope and upside. But, you know, we have great opportunities here. Ireland's prosperity since we joined the EC has been built on free trade and access to markets.
and ultimately Mercosur direct trade with the immediate five countries, but the seven associated countries are probably going to be on the way. We're dealing with a market that's almost as big in size as the European Union. And at a time when globalization is under threat, certainly in North America, it's absolutely good news to see
that saner heads have prevailed and we're going to have a free trade agreement between Europe and most of South America.
OK, Francie Corman, I'll bring you in there. Fear is the easiest commodity to sell, Neil says. Have you been selling fear?
Well, I'm always amused, David, when non-farming people start telling farmers what's good for them. We represent our members. That's our job, to lobby on their behalf. The EU membership of the European Union has been good for Ireland, but we are entering a phase now where we're going from what was a very protected market to a very open market.
And we always seem to have agriculture as a bargaining chip in all these trade deals. And our concerns about it are, number one, the standards that are applied to production in South America that we have to compete with, the damage that that's going to do to the market. You cannot bring product into a market without undermining it in some shape or form. And that's acknowledged.
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Chapter 3: Why do some believe the downsides of Mercosur have been exaggerated?
And the idea that there's going to be huge benefits for Irish agriculture in this, that doesn't stack up.
Well, you accept that there's benefits for the dairy sector?
Potentially. Very, very, very, very minimal benefits for the dairy sector, but they will be absolutely wiped out by the damage that's done to the beef sector. And remember, David, you don't have a dairy sector if you don't have a beef sector. We have every dairy calf, every cow that produces milk eventually finishes up in the beef sector. And we have farmers whose markets and our prices
are already been undermined by trade deals that have been done with Europe, by Europe and by the English. And we've seen that play out in the marketplace over the last five or six months where farmers who have purchased cattle in the autumn for finishing now see themselves suffering heavy losses because our prices have been undermined by imports into the UK in particular.
Okay, Neil Macdonald, prices are being undermined and crucially, and this affects everybody, consumers as well as producers, standards are being undermined.
No, and that's factually untrue. And CETA has given us the playbook on that already. So this is exactly the same rhetoric as was applied when Europe did the deal with Canada. Because our standards have remained robust, because our inspection regime has remained robust, the amount of Canadian beef coming into Europe has remained very small.
And as a matter of fact, it's a provable fact, our beef exports to Canada have increased. Whether I'm wearing wellingtons or not during this conversation is completely irrelevant. The data says that free trade is good for farmers as well as everyone else. And I would like to remind Francie and other people in the agricultural community, it's not just about agriculture.
There are other people working in this. There are sons and daughters of farmers who stand to gain from this deal as well. So this is almost all upside and very little downside. The 99,000 tonnes of beef that are coming in this direction, if every single one of them is prime fillet, That's one steak per European citizen per year. Please, let's not exaggerate the cost of this deal.
Okay, Francie.
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Chapter 4: What opportunities does the Mercosur deal present for Irish exporters?
And I know from meeting people at trade forums, our association does, they're more concerned about the trade deals to the US and North America than they are on the Mercosur trade deals to South America. And if there were benefits to other sectors in the economy. Why does agriculture, why do farmers have to carry the cost of this?
And if the European Union were serious about insulating farmers on this, they wouldn't have went about cutting our cap budget by 22% in the discussions that are going to take place in the latter half of 2026. So we do need a bit of perspective on this. It's not just about benefits for the other parts of the economy.
It is how are we going to carry this as a sector, as a beef sector and as farmers back home.
OK, Neil Macdonald, two points there. One, can you quantify the benefits for other sectors of the Irish economy? And two, Francie makes a point. Why does agriculture always end up being the one bearing the cost?
Well, I mean, the facts around CETA are actually quite clear. Not alone have they not borne cost. First of all, substandard beef has not made it back into this market.
But we've seen substandard food products coming in from South America.
We've seen substandard products produced in Ireland as well. That does not constitute a legitimate reason to hold up the largest trade deal forming the largest trade block in the history of the planet.
You know, the fact that someone put some horse meat into a packet down the country here in Ireland does not mean that our entire beef industry is blameworthy for what happened among a tiny minority.
But there's different standards in Brazil to the standards that are applied here.
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