Irish Examiner | 27 Janaury 2021
Drystock farmers to lose out to increased imports in EU plans for 12 trade agreements
by Stephen Cadogan
Beef cattle prices in the EU will fall by 2.4%, if the Mercosur trade agreement is ratified, according to the latest assessment by the Joint Research Centre (JRC), the European Commission’s science and knowledge service.
Under the provisional agreement with the Mercosur countries in South America, the EU will allow 99,000 tonnes of beef to enter its market, with a 7.5% import duty.
It will take five years after ratification and implementation of the trade agreement until the 99,000t amount is reached.
The JRC price prediction is for 2030, and also takes into account 11 other trade agreements either concluded or still under negotiation.
In the other trade agreements which the EU is negotiating, it is envisaged sheepmeat imports from Australia and New Zealand would result in sheep prices in the EU falling by 1.9% to 3.1%.
In recent years, the EU concluded trade agreements with Canada, Japan, Mercosur, Mexico, and Vietnam.
Some of these have yet to be ratified.
Further trade agreements under negotiation or possibly envisaged are with Australia, Chile, Indonesia, Malaysia, New Zealand, the Philippines, and Thailand.
However, the Mercosur trade agreement would have by far the biggest impact on the beef market.
If all 12 trade agreements were implemented, they would increase the value of EU beef imports by 21%-26% (by €512m-614m).
Most of this increase in imports derives from the Mercosur trade deal (€422m, or 69%-82% of the increase in imports), but Australia also gaining EU market access for beef would bring €45m-121m of additional imports.
The JRC says the EU would meanwhile increase beef exports, mainly to Japan and the Philippines, by a predicted €105m-150m, partially cancelling out the impact of Mercosur and Australia imports.
EU beef production falling 0.3%, and becoming strongly linked to development of the dairy herd, are envisaged.
EU sheepmeat production is envisaged to fall by 0.2-0.4%.
The JRC said the EU trade agenda is set to have an overall positive impact on the EU economy, and on the agri-food sector.
It predicted trade agreements would result in substantial increases in EU agri-food exports, with more limited increases in imports, creating a positive trade balance overall.
Despite No 1 global dairy exporter New Zealand being one of the countries with which a trade agreement is being negotiated, the JRC says potential gains from trade opening up are particularly large for the EU dairy sector, and for the pork sector, and for more high value/processed products of the EU agri-food industry, such as wine, beverages, and tobacco.
Additional export demand enhanced by trade agreements could translate into an important source of growth, jobs creation, and value added for the European agricultural and food sectors, according to the JRC.
But imports would grow of products such as beef, sheep meat, poultry, rice, and sugar.
“The successful conclusion of trade agreements will have to strike a balance between the protection of sensitive products [such as beef] and the achieved market access for EU agricultural products, if the overall result of trade negotiations is to remain economically and socially acceptable for EU agriculture,” said the JRC.
Overall, if 12 trade agreements are implemented, the value of EU agri-food exports in 2030 will have increased by 2.8%-3.3% (or €4.7bn-5.5bn).
Imports would increase by 10%-13%, or €3.7bn-4.7bn, predicted the JRC, which noted that environmental and climate effects, or any EU Green Deal-related initiatives, did not fall within the scope of its research on trade agreements.
And its results are only available for the EU as a whole, not for member states or regions.
Its findings are for 2030, compared to “business as usual”.
Dairy exports (cheese, butter, skimmed milk powder, whey) are predicted to increase as much as 7.3% (€1.3bn), with Japan the main destination envisaged for additional exports.
Increasing EU milk production (by 0.2%) and milk prices (by 1.3%) are predicted to add €890m to the revenue of dairy farmers, by 2030.
Pork exports increasing as much as 8.9% (€914m) are associated with a 3.3%-4.6% pig price increase and a 0.7%-1% production growth in the EU, in the JRC projections for 2030.