While US President Donald Trump continues to dominate the global trade-deal news, other deals that matter to Irish farmers are moving towards a conclusion. In the case of Mercosur, it is ratification at an EU level whereas with the Comprehensive Economic and Trade Agreement (CETA) with Canada, it is ratification in the Dáil that has come on the agenda this week. CETA has been operating provisionally pending ratification by EU member state governments since 2017 in all matters relating to trade.

The amended Mercosur agreement, which was concluded last December, is about to begin the political approval process in the coming weeks. If successful, it could become provisionally operational from the end of next year.

Mercosur steps to approval

Mercosur is the trading bloc formed by the South American countries of Brazil, Argentina, Uruguay and Paraguay. They began a trade deal negotiation with the EU in 1999, and after multiple stops and starts, reached agreement in 2019. The environmental chapter of this agreement was subsequently renegotiated and agreed in December last year. Since then the agreement has been going through the administrative process of legal scrubbing and translation into EU languages.

It is now about to enter the political approval process as the deal will come before the European Council of Ministers in the coming weeks, before Brussels takes its summer break in the middle of July.

If, as expected, they give it the go ahead, it will move into the EU Parliament, where a simple majority is required for approval. The Parliamentary process will take several months and if they clear it, it’s back to the Council of Ministers for final sign off. The view in the EU Commission is that if everything goes to plan, the deal could be operating provisionally by the end of 2026, or the start of 2027.

It is unclear yet whether or not member states will have the opportunity to decide on the deal. Trade is exclusively an EU matter, but wider political issues need individual member state approval.

Farmer concerns

As Figure 1 shows, the Mercosur member countries are the largest suppliers of beef imported by the EU apart from the UK. A further 99,000t preferential quota with a 7.5% tariff is part of the deal and this is what is causing Irish and EU beef producers huge concern. Poultry producers are also very worried as there is an 180,000t, zero-tariff quota for poultry imports.

The problem for beef and poultry producers is that overall the Mercosur deal is beneficial to the wider EU and Irish economy, with opportunities for technology, pharma, machinery and car exports. Removal of tariffs by Mercosur on dairy imports from the EU are also expected to create some opportunities, especially for cheese.

CETA is effectively a done deal

Before Mercosur, the most generous quota ever granted by the EU for beef imports was to Canada for 50,000t in the CETA negotiation. This concluded in 2016 and came into effect provisionally the following year. However as Figure 2 shows, Canadian beef reached just over 2,000t of EU total imports at their highest point in 2022 and this has fallen back to half that in 2024. The reason for this is that most Canadian beef is produced from cattle that have been fed growth promoting hormones which are banned in the EU.

Faced with a decision on using hormones or exporting to the EU, Canadian farmers opt for using hormones. Canadian farmers and exporters are very unhappy with the EU ban on their hormone-fed beef. Post-Brexit trade negotiations between Canada and the UK broke down on this issue.

While EU imports of beef from Canada have been small, as Figure 3 shows, Irish beef exports to Canada have grown to over 4,000 tonnes in 2024.

While this is modest in the overall context of Irish beef exports, it is nevertheless one of the more successful export developments outside of Europe in the past decade.

Comment

The CETA deal has been in place several years and the EU has not been flooded with Canadian beef. In fact, Irish beef exports to Canada have grown from nothing to over 4,000t. The main concern for the Irish Government isn’t trade, but the constitutional implications of CETA in relation to the forum for resolution of disputes in relation to the deal. With Mercosur, while the Irish economy overall would benefit, there are huge fears in relation to beef and poultry meat. Apart from the UK, the largest suppliers of EU beef imports are Brazil, Uruguay and Argentina.

China has replaced the EU as their main export market in the last decade but if anything disrupts that, an additional 99,000t beef quota makes the EU an attractive option.