G20 ‘trumps’ COP29 for farmers

While US president-elect Donald Trump doesn’t formally take up office until 20 January, he is very much the elephant in the room at the Conference of the Parties (COP) 29th summit, which opened in Azerbaijan this week.

This gathering is not being attended by several global leaders including the presidents of the US, China and the European Commission, as well as the leaders of several European countries. This has meant that COP29 is on course to be a relatively low-key event without the political heft that comes from having global leaders present.

The annual COP summits are a gathering of the nations to review progress on the ambition of restricting the increase in global temperatures to 1.50C, which was agreed at the Paris conference in 2015.

This ambition has not been fulfilled and outside of Europe there appears little appetite for the measures required to limit the increase in greenhouse gas emissions, never mind reducing them.

The other key ambition for COP29 was to identify a funding stream that would compensate developing countries for loss of economic development.

However, the election of Donald Trump as US president last week has added a new dimension to proceedings. In his previous term as president, he controversially withdrew the US from the Paris commitment to limit to temperature increase to 1.50C. This was reversed when Joe Biden became president in January 2021 and now the focus switches back to what president-elect Trump will do.

If his campaign criticism of the Democrats’ green energy funding and commitment to fossil fuel extraction in the US is any indication of intent, climate would appear to be a low priority for the incoming president.

There was something of a resigned tone to the comments of John Podesta, the US climate envoy, when speaking to the press at COP29 this week when he talked about the US election.

“For those of us dedicated to climate action, the election was bitterly disappointing, particularly because of the unprecedented resource that Biden and Harris brought to the fight,” Podesta said.

Trade

The other headline-grabber from the US election campaign was Donald Trump’s commitment to impose at least a 20% tariff on all imports to the US.

For Irish farmers, this would have a direct impact on our €467m of dairy, €16m of pigmeat and €11m beef/offal exports to the US (January to August 2024). However, it is its potential indirect impact that is even of greater concern.

Figure 1 shows the major suppliers of US beef imports so far in 2024 and all of the big suppliers, apart from Brazil, have some level of a free trade agreement with the US.

In the previous Trump administration, the president insisted on a renegotiation with Canada and Mexico.

If he decided to do the same with Australia and New Zealand, they may look more to the UK where they have a free trade deal for beef and lamb. Brazil and Uruguay could look to the EU as a better option if the Mercosur trade deal is finalised.

One of the reasons for many global leaders not being at the COP29 event is that they will be attending the G20 summit in Brazil on 18 and 19 November.

This economic forum is made up of the top 19 economically performing countries, plus the European Union and African Union.

No doubt, future US tariff plans will feature in the conversations that take place in the margins but the one Irish farmers will be watching is for any progress in the Mercosur trade deal.

It is widely reported that there will be a push in the margins of the G20 between the EU and Brazil, Uruguay, Argentina and Paraguay, which make up Mercosur to resolve the final environmental issues that have delayed the deal being put forward by the EU for ratification by the European Parliament and member states.

If this goes to plan, it is reported that a special EU Mercosur summit is being lined up for the first week of December to conclude the agreement.

The trade spat with China over electric vehicles, plus the fear of what the US will do with tariffs in the new year, adds an urgency for the EU to have what it considers a positive trade story, even if this would be disputed by farmers.

Open letter

This week, Copa Cogeca, the EU umbrella body for EU farm organisations and agri co-operatives, wrote an open letter to European Commission president Ursula von der Leyen and Council president Viktor Orban warning against closing the deal because of the inequality between EU and South American production systems.

However, the reality is that farming is very much a lone commercial voice in opposing the deal, though there is also opposition from the environmental lobby in the EU.

Last week’s US election is the latest twist on the uncertain world of global trade. While the current Biden administration hadn’t delivered a reduction in US emissions, it has been investing huge resources in a green energy plan designed to deliver future reductions from the latter part of this decade.

After the US walked away from the Paris targets during the last Trump presidency, this investment had moved it up towards the top of the class. That is now in serious doubt as is the wider global trading picture if the US introduces wholesale tariffs next year.

Meanwhile, in the EU, farmers are preparing for the worst with Mercosur where agriculture, particularly beef and poultry producers, stand to lose. Huge uncertainty is the new normal.