The final text of the EU-Mercosur trade deal has been sent out to member states this week, marking the start of the approval process. John Clarke was the senior official in DG Agri heading the negotiation on the agriculture chapter in the EU-Mercosur trade deal. He was then Commissioner Phil Hogan’s right-hand man on all agriculture matters in trade negotiations and is now retired from the European Commission. Speaking to the Irish Farmers Journal this week, he is adamant that Ireland should endorse the deal.
When it was put to him that the deal wasn’t good for Irish beef producers, Clarke accepted the point before going on to outline the safeguards and how in fact the deal could have been so much worse.
He said: “I’m not going to pretend that it’s a positive outcome for Irish or European beef and it would be insincere to say that everything is perfect.”
He went on to highlight several sectors of the EU and Irish economy that would benefit greatly from the deal including dairy and processed foods, plus tech and pharma.
Trade interests
While the EU has a diverse range of export interests to the Mercosur countries of Brazil, Argentina, Uruguay and Paraguay, access for agricultural produce is the main Mercosur interest in the EU. They are major producers of all agricultural products but their main volume interest for EU access centred around beef, poultry meat and sugar.
On beef, Clarke said that it was a major sticking point in the negotiation with the Mercosur group looking for a beef quota in excess of 400,000t until the last moment.
Safeguards
Clarke was robust in his defence of the Mercosur deal. He said that the deal “will not lead to new volumes coming into the European Union”.
He added: “It will simply displace some beef from other countries and beef imports from Mercosur countries will come in now at a slightly lower price because of the lower 7.5% tariff.”
He also highlighted that the 99,000t quota “will be phased in over several years, so the full impact which will be minimal in any case, will only be felt in the middle of the next decade”.
He also referred to the fact that the quota is split “between fresh and frozen so that it will not be possible for the Mercosur exporters to occupy the high end of the market only”.
When it was put to him that despite these restrictions, the overall impact of the deal for beef producers is negative, Clarke referred to the safeguard clause.
He said that “for the first time ever in any trade agreement, there’s a safeguard clause applicable to beef, poultry and sugar which are already subject to quotas”. What this means he said is that if there is a “surge of imports or if the imports of the product cause or threatened to cause some disruption to the stability of the European market and production, the EU can close the market to those imports or reinstate a very high tariff to remove any disruption”.
Hogan billion
Clarke was now hitting his stride in defence of the beef quota agreed in the Mercosur deal. He pointed out that EU importers will manage the quota licences thereby exercising “control over the flow of imports month by month which should avoid any surges. That was a very important ask from Europe, the beef sector, that they could control the flow of imports under the quota.”
The final assurance according to Clarke was what is commonly referred to as the ‘Hogan billion’. This was the €1bn fund promised by then EU Agriculture Commissioner Phil Hogan for use in the support of the EU beef sector in case Mercosur caused disruption. “I’m quite confident that the money will never be needed or used, but it’s my understanding that it is going to be in as part of the deal and in the next EU budget,” Clarke said.
Other deals
When it was put to him that UK trade deals with Australia and New Zealand agreed after the Mercosur EU deal increased risks for EU beef producers further, he pushed back by referring to the deal with Canada. It has what was considered a generous 35,000t fresh beef and 15,000 tonne frozen beef quota under the Comprehensive Economic and Trade Agreement (CETA) deal which has been in effect since 2017.
Clarke recalls that when it was agreed, “Ireland and France thought that the heavens were going to fall in and nothing has happened. Europe has increased beef exports to Canada massively and very little Canadian beef is coming to Europe.”
DG Agri trade data for 2024 shows that EU countries exported 7,944t of fresh and frozen beef to Canada while 792t of Canadian beef was imported by the EU.
Part of the explanation for low volumes of beef imports from Canada is that most Canadian farmers prefer to feed growth hormones to their cattle which excludes them from being exported to the EU.
Clarke is also strongly of the view that Ireland should endorse the EU Mercosur agreement. He said that “Ireland has done very well out of the European Union and the agreement with Mercosur will be good for Ireland overall”.
Hard sell
Despite the assurances, none of the Irish farm organisations are persuaded by the merits of the Mercosur trade deal.
It is the same in the meat processing industry with Dale Crammond of Meat Industry Ireland (MII) telling the Irish Farmers Journal that “MII remains firmly opposed to the ratification of the Mercosur Agreement. There is still an opportunity for the Commission to negotiate a more balanced outcome on behalf of the EU livestock sector.”
The Irish Farmers Journal spoke to Paul Nolan, group development manager at Dawn Meats to explore why there is such fear of the Mercosur deal.
His position is that “we are a major beef exporting country and we cannot have our cake and eat it.” However, what he says is required is a “balanced deal”.
He added: “By this I mean the EU is the world’s highest value steak meat market and if this segment of the market becomes over supplied, then the steak premium is at risk.”
He points out that “99,000t may be a small percentage of the overall beef market but it isn’t made up from the full range of beef cuts and doesn’t have carcase balance. If it is used just for steak meat, there is a very small amount in each carcase and it takes a lot of cattle to produce 99,000t”.
An economic impact assessment carried out by the Irish Government in 2021 estimated that the deal would cost Irish beef producers between €45m and €55m annually. These values will have increased in line with beef prices since then.
Paul Nolan, group development managerat Dawn Meats. \ Lorraine O'Sullivan .
Comment: Mercosur is a great deal for
everyone – except for beef producers
The points made by John Clarke on the wider benefit of the Mercosur trade deal to the wider EU and Irish economy are correct.
The only problem with it is – as he identifies himself – that it isn’t good for beef producers in Ireland or across the EU. He is also correct in saying that Mercosur countries would have wanted greater access to the EU market.
Whereas the UK has been generous with market access in their post Brexit trade deals, the EU has kept greater control of quota access.
However, as Figure 1 shows, the Mercosur countries along with the UK supply virtually all of the EU beef imports.
The Brexit deal gives the UK unlimited tariff free access to EU markets while the Mercosur deal proposes a 99,000t quota with additional terms and conditions as explained by Clarke.
Nolan correctly identifies that Ireland has to be open to trade given the level of our beef exports and as Figure 2 shows, the EU is also a major beef exporter.
There is a further moral pressure on the Irish Government from the EU to accept the Mercosur deal. Again, Clarke correctly identifies that in general EU membership has been good for Ireland.
There is also the Brexit dimension where the EU was very supportive of the Irish Government position in the negotiation with the UK.
This, combined with the overall benefit of the Mercosur deal to EU member states means that the deal is likely to be ratified albeit with plenty of noise generated in the debate inside and outside the parliament.
However, we cannot pretend that it is a positive outcome for Irish or EU beef production, the best we can hope for is damage limitation.
In short:
Mercosur deal gives access for 99,000 tonnes of beef at 7.5% tariff.Originally wanted 400,000-plus tonnes.Deal works for wider economy.Beef, poultry and sugar lose out.Safeguards intended for damage limitation.Ratification process underway with final text circulated to member states.
The final text of the EU-Mercosur trade deal has been sent out to member states this week, marking the start of the approval process. John Clarke was the senior official in DG Agri heading the negotiation on the agriculture chapter in the EU-Mercosur trade deal. He was then Commissioner Phil Hogan’s right-hand man on all agriculture matters in trade negotiations and is now retired from the European Commission. Speaking to the Irish Farmers Journal this week, he is adamant that Ireland should endorse the deal.
When it was put to him that the deal wasn’t good for Irish beef producers, Clarke accepted the point before going on to outline the safeguards and how in fact the deal could have been so much worse.
He said: “I’m not going to pretend that it’s a positive outcome for Irish or European beef and it would be insincere to say that everything is perfect.”
He went on to highlight several sectors of the EU and Irish economy that would benefit greatly from the deal including dairy and processed foods, plus tech and pharma.
Trade interests
While the EU has a diverse range of export interests to the Mercosur countries of Brazil, Argentina, Uruguay and Paraguay, access for agricultural produce is the main Mercosur interest in the EU. They are major producers of all agricultural products but their main volume interest for EU access centred around beef, poultry meat and sugar.
On beef, Clarke said that it was a major sticking point in the negotiation with the Mercosur group looking for a beef quota in excess of 400,000t until the last moment.
Safeguards
Clarke was robust in his defence of the Mercosur deal. He said that the deal “will not lead to new volumes coming into the European Union”.
He added: “It will simply displace some beef from other countries and beef imports from Mercosur countries will come in now at a slightly lower price because of the lower 7.5% tariff.”
He also highlighted that the 99,000t quota “will be phased in over several years, so the full impact which will be minimal in any case, will only be felt in the middle of the next decade”.
He also referred to the fact that the quota is split “between fresh and frozen so that it will not be possible for the Mercosur exporters to occupy the high end of the market only”.
When it was put to him that despite these restrictions, the overall impact of the deal for beef producers is negative, Clarke referred to the safeguard clause.
He said that “for the first time ever in any trade agreement, there’s a safeguard clause applicable to beef, poultry and sugar which are already subject to quotas”. What this means he said is that if there is a “surge of imports or if the imports of the product cause or threatened to cause some disruption to the stability of the European market and production, the EU can close the market to those imports or reinstate a very high tariff to remove any disruption”.
Hogan billion
Clarke was now hitting his stride in defence of the beef quota agreed in the Mercosur deal. He pointed out that EU importers will manage the quota licences thereby exercising “control over the flow of imports month by month which should avoid any surges. That was a very important ask from Europe, the beef sector, that they could control the flow of imports under the quota.”
The final assurance according to Clarke was what is commonly referred to as the ‘Hogan billion’. This was the €1bn fund promised by then EU Agriculture Commissioner Phil Hogan for use in the support of the EU beef sector in case Mercosur caused disruption. “I’m quite confident that the money will never be needed or used, but it’s my understanding that it is going to be in as part of the deal and in the next EU budget,” Clarke said.
Other deals
When it was put to him that UK trade deals with Australia and New Zealand agreed after the Mercosur EU deal increased risks for EU beef producers further, he pushed back by referring to the deal with Canada. It has what was considered a generous 35,000t fresh beef and 15,000 tonne frozen beef quota under the Comprehensive Economic and Trade Agreement (CETA) deal which has been in effect since 2017.
Clarke recalls that when it was agreed, “Ireland and France thought that the heavens were going to fall in and nothing has happened. Europe has increased beef exports to Canada massively and very little Canadian beef is coming to Europe.”
DG Agri trade data for 2024 shows that EU countries exported 7,944t of fresh and frozen beef to Canada while 792t of Canadian beef was imported by the EU.
Part of the explanation for low volumes of beef imports from Canada is that most Canadian farmers prefer to feed growth hormones to their cattle which excludes them from being exported to the EU.
Clarke is also strongly of the view that Ireland should endorse the EU Mercosur agreement. He said that “Ireland has done very well out of the European Union and the agreement with Mercosur will be good for Ireland overall”.
Hard sell
Despite the assurances, none of the Irish farm organisations are persuaded by the merits of the Mercosur trade deal.
It is the same in the meat processing industry with Dale Crammond of Meat Industry Ireland (MII) telling the Irish Farmers Journal that “MII remains firmly opposed to the ratification of the Mercosur Agreement. There is still an opportunity for the Commission to negotiate a more balanced outcome on behalf of the EU livestock sector.”
The Irish Farmers Journal spoke to Paul Nolan, group development manager at Dawn Meats to explore why there is such fear of the Mercosur deal.
His position is that “we are a major beef exporting country and we cannot have our cake and eat it.” However, what he says is required is a “balanced deal”.
He added: “By this I mean the EU is the world’s highest value steak meat market and if this segment of the market becomes over supplied, then the steak premium is at risk.”
He points out that “99,000t may be a small percentage of the overall beef market but it isn’t made up from the full range of beef cuts and doesn’t have carcase balance. If it is used just for steak meat, there is a very small amount in each carcase and it takes a lot of cattle to produce 99,000t”.
An economic impact assessment carried out by the Irish Government in 2021 estimated that the deal would cost Irish beef producers between €45m and €55m annually. These values will have increased in line with beef prices since then.
Paul Nolan, group development managerat Dawn Meats. \ Lorraine O'Sullivan .
Comment: Mercosur is a great deal for
everyone – except for beef producers
The points made by John Clarke on the wider benefit of the Mercosur trade deal to the wider EU and Irish economy are correct.
The only problem with it is – as he identifies himself – that it isn’t good for beef producers in Ireland or across the EU. He is also correct in saying that Mercosur countries would have wanted greater access to the EU market.
Whereas the UK has been generous with market access in their post Brexit trade deals, the EU has kept greater control of quota access.
However, as Figure 1 shows, the Mercosur countries along with the UK supply virtually all of the EU beef imports.
The Brexit deal gives the UK unlimited tariff free access to EU markets while the Mercosur deal proposes a 99,000t quota with additional terms and conditions as explained by Clarke.
Nolan correctly identifies that Ireland has to be open to trade given the level of our beef exports and as Figure 2 shows, the EU is also a major beef exporter.
There is a further moral pressure on the Irish Government from the EU to accept the Mercosur deal. Again, Clarke correctly identifies that in general EU membership has been good for Ireland.
There is also the Brexit dimension where the EU was very supportive of the Irish Government position in the negotiation with the UK.
This, combined with the overall benefit of the Mercosur deal to EU member states means that the deal is likely to be ratified albeit with plenty of noise generated in the debate inside and outside the parliament.
However, we cannot pretend that it is a positive outcome for Irish or EU beef production, the best we can hope for is damage limitation.
In short:
Mercosur deal gives access for 99,000 tonnes of beef at 7.5% tariff.Originally wanted 400,000-plus tonnes.Deal works for wider economy.Beef, poultry and sugar lose out.Safeguards intended for damage limitation.Ratification process underway with final text circulated to member states. 
This is a subscriber-only article
SHARING OPTIONS: