Fears of ‘damage’ from trade deal

A leak of a report from a European Commission research unit says farmers could lose more than 3 billion euros a year by 2020, and up to 33,000 jobs, under any likely deal with the Mercosur region, which includes Brazil, Argentina, Paraguay and Uruguay. Some farming organisations have predicted much worse.

Brazil alone counts for nearly double the EU-27 area.

The EU-Mercosur free trade talks were launched in 1999 but stalled in 2004 because the EU could not get the guarantees it wanted for industrial goods and services going south in exchange for more basic agricultural exports coming north. The talks were relaunched in May 2010, under the Spanish EU Presidency. Some members of the European Parliament have picked up on farming concerns, championed by France and Ireland, and have slowed progress. But the UK and most other EU member governments are broadly in favour.

Even the opposition seems to think it can do no better than put the final handshakes off until next year and get some concessions meanwhile – mainly to do with Mercosur assurances of compatible animal welfare and health standards.

The main concern is a flood of cheap beef and the leaked report, from the EC’s Joint Research Centre (JRC) to its agriculture department, estimates that by 2020 EU beef production would fall by 150,000 tonnes a year and producer prices for the remaining meat would be cut by nearly eight per cent. EU cereals exports to the four Mercosur countries would increase by about one million tonnes a year over the same period. But farm incomes would be down four per cent on average in Ireland, three per cent in Britain and two per cent in France.

EU officials made no attempt to deny the gist of the report, put out by the Reuters news agency, but pointed out that member states would get a chance to consider any proposed deal before it was put to the Mercosur group.

The Brazilians and Argentinians have been aggressively challenging Irish-led criticism of their food safety standards and the EC’s trade department has been pointing out that when all sectors of industry are taken into account, both sides would expect to benefit by £4.5bn a year from the increase in transAtlantic trade.

Euro-MP Stuart Agnew, agriculture spokesman for the UK Independence Party, drew attention to the JRC report this week. He commented: “It makes clear the huge damage that will be inflicted on British farmers and farmers in the rest of Europe. I have been consistently raising concerns about the Mercosur talks and in particular its potential effect on the beef sector.

“If we were not members of the EU we would not be getting dragged into any such deal. This is yet another example of the EU leading us down the garden path to disaster.”

Paul Temple, East Yorkshire beef farmer and a former vice president of the NFU, said: “The trouble is, from the political point of view, it looks like a win-win proposition, because anything that works against rising food prices would be welcomed by the public.”