Mirror clauses in international trade

One of the most controversial issues in international trade is the issue of standards and what governments - or in our case, the EU - accepts as equivalence.

For example, the EU, which regulates trade on behalf of members, will not accept production standards that include the use of hormones in feed for livestock for imports.

It has been banned for use by EU farmers since the 1980s and any imported meat product coming from animals that have been fed hormones is also banned.

However, the rules for EU imports don’t exactly mirror what is required for EU producers.

Staying with agri food, there are multiple examples of sprays that can be freely used in the rest of the world, but are banned in the EU, while cattle traceability means different things in different places.

In the EU, every animal must be registered within the first 28 days of its life, whereas EU beef imports in the Mercosur trade deal are required to be tagged and traceable for the final 70 days of the animal’s life.

Precaution versus scientific

There is a valid debate on whether or not the EU is overcautious in its demands on these issues.

Canada and the USA in particular have a serious issue with the EU not accepting their beef that has been produced with the assistance of hormones.

In fact, the US secured a judgement at the World Trade Organisation (WTO) ruling in their favour in this matter because the EU precautionary principle was considered secondary to the science which favoured the US position.

As for lifetime traceability as required in the EU, this - like banning the use of hormones in production - is a relatively recent development.

The main benefit in having real time traceability for livestock is in animal disease management.

It was made compulsory across the EU following the spread of BSE in the 1990s and full traceability was also used to give consumer reassurance on the source and safety of beef.

BSE was never as widespread an issue outside Europe and in any case the logistics for full national herd tagging were considered not justified by countries with large cattle populations.

Of course, countries trading with the EU had to introduce traceability for cattle used in these beef exports.

It is also interesting to note that Brazil announced at the end of last year that it is phasing in a full herd traceability system which they plan to have completed by 2032.

Many of the finer nuances of international trade have taken a back seat in recent weeks with the return of President Trump and his more cavalier approach to trade, the announcement of a 25% tariff on US imports from the EU being the latest example.

However, this in its own way will make other countries reflect on their trade alliances and how they do business and they are all exposed to what the US might do by way of unilateral tariff actions.

Ireland and the EU are exposed to US tariff threats on technology, pharma and industrial goods, while the South American countries in Mercosur are all major beef exporters to the US.

Irish and EU farmers will protest that there isn’t equivalent standards for imports compared with domestic production, but they could be overlooked in the wider interest of the deal.