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Balmoral Show during the week was dominated by two in or out debates. The most obvious and immediate one is whether or not the UK will vote to leave or stay in the EU. The other intriguing one was whether or not beef would be included in the offer to Mercosur to kick start tariff reduction negotiations. In Belfast on Monday, Agriculture Commissioner Phil Hogan said beef was off the menu to use his phrase and this was repeated and widely reported from his meeting with NFU Wales on Tuesday. Then a twist occurred on Wednesday with Trade Commissioner Malmstrom refusing to confirm in an answer to MEP’s questions whether or not this was the case.
The Balmoral Show during the week was dominated by two in or out debates. The most obvious and immediate one is whether or not the UK will vote to leave or stay in the EU. The other intriguing one was whether or not beef would be included in the offer to Mercosur to kick start tariff reduction negotiations.
In Belfast on Monday, Agriculture Commissioner Phil Hogan said beef was off the menu to use his phrase and this was repeated and widely reported from his meeting with NFU Wales on Tuesday. Then a twist occurred on Wednesday with Trade Commissioner Malmstrom refusing to confirm in an answer to MEP’s questions whether or not this was the case.
Differing interpretations
In South America, there is conflicting interpretations as well. Brazilian farmers are aggravated with the main farming union, the Confederation of Agriculture & Livestock (CNA) saying the EU offer to Mercosur was “disrespectful and highly frustrating” and suggested that the EU didn’t want to negotiate, in an interview with Brussels trade publication Agra Facts.
Meanwhile, Uruguay’s Foreign Minister, Rodolfo Nin Novoa, who is the current Mercosur President, said that all agriculture products are included in negotiations. He went on to say however that volumes and time frames weren’t included at present. This is the nub of the issue. While the offers haven’t been made public, it is known that the EU has offered to include 91% of products and services in a wide ranging offer while Mercosur in return has offered 87% which has underwhelmed many EU member states.
Which is it?
On the issue of beef which was of greatest concern, the 78,000 tonne offer that was floated to member states for consultation isn’t in the EU offer. That does not mean that the issue is gone for good as reported in this week’s Irish Farmers Journal and the reason that both positions on whether or not beef is included are, in a way, correct. The offer that was circulated among members was “taken off the menu,” as Commissioner Hogan said. However that doesn’t mean that it or a variation of it cannot be put back on the menu at a later point in the discussions. This is what the Mercosur President and the EU trade Commissioner Malmstrom are working to.
Next steps
It is inevitable if the negotiations go anywhere, Mercosur will want beef included, it is only a case of when and how much. Negotiators will meet in July to put in place a timetable for negotiating rounds which are expected to commence in the autumn. By that stage it is expected that the new impact assessment of reduced tariff access for more South American beef should be completed. The Irish Farmers Journal is reporting the impact assessment of greater access for US beef in a possible trade deal with the US through TTIP. Unsurprisingly, it is negative and everyone with even the most basic understating of the trade would expect the same with Mercosur.
If progress is made in the early rounds with what is already on the table, the pressure will mount to have beef and sugar, which is an issue in France, included. By then there will be a clearer idea of where the TTIP discussions with the US are heading because the indications from Brussels at present is that they are in difficulty.
The longer game also has trade discussions ongoing with Japan and the EU China Investment Agreement which has its ultimate aim of a FTA agreement with China.
We could visualise progress in Japan sooner which would be a positive to agriculture, particularly dairy and pig meat with beef a poorer relation. China will be the much longer game but if the EU was able to demonstrate progress in these the case will be made that overall Tariff Rate Quotas (TRQ’s) are a good thing.
However it is likely that the beef sector will the one at the end of the line with pressure to allow some Mercosur access with the hope that China will come good. Given that only EU country approved at present approved to export beef to China, never mind at a reduced tariff, this would really be a case of “live horse get grass.”
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