The European Union (EU) has approved a trade deal with a bloc of South American countries, opening up a big new market for European producers but likely drawing backlash from farmers.
The Mercosur trade deal has for years been a contentious flashpoint between efforts to expand the union’s global influence and the powerful farming lobby in many European countries.
A sufficient majority of EU states confirmed their backing for the trade deal in a crunch vote in Brussels on Friday, paving the way for its adoption after years of false starts.
In a closed-door discussion beforehand, the Italian government, which held the decisive vote, confirmed it would support the deal, according to three sources in the room.
The deal, which has been negotiated on and off for more than 25 years, will lower barriers to trade between Europe and the Mercosur countries of Brazil, Argentina, Uruguay and Paraguay.
Irish farmers are concerned about the extra 99,000 tonnes of beef the deal will allow Mercosur countries to sell into the European market. Farmers fear they will be undercut by cheaper Brazilian and Argentinian products that may not have been produced to the EU’s strict environmental standards.
The Government confirmed it would vote against the deal, following pressure from farming organisations, rural Independent TDs who support the Coalition, as well as Fine Gael and Fianna Fáil backbenchers.
While placating domestic opponents of the deal, Ireland’s vote is likely to damage its standing in Brussels.
The European Commission, the EU’s powerful executive that leads on trade and negotiated the deal, has insisted any negative impacts will not be as dire as beef farmers fear.
The Mercosur deal will now need to be ratified by a majority of MEPs in the European Parliament, where voting coalitions have become much more volatile and unpredictable.
[ The Irish Times view on Mercosur: a deal too far for this GovernmentOpens in new window ]
Irish whiskey and dairy, the Republic’s big pharmaceutical industry, and other Irish businesses would be expected to benefit from easier access to the South American market.
What is the Mercosur trade deal?
Who is for and against it?
Fans of the deal say it offers access to new markets and helps combat Donald Trump’s tariffs. In Ireland, France and Poland, farmers fear more beef coming into the EU.
The programme for government codifies Ireland’s opposition to the deal, committing the Coalition to “work with like-minded EU countries” in opposing Mercosur.
France and Poland opposed the agreement, under pressure from farmers.
The commission made a number of last-minute concessions to the French and Italian governments, such as promising more funding for agriculture in the EU’s next budget and lower tariffs on imported fertiliser. The sweeteners were seen as crucial to locking in the support of Rome.
However, the French government could not be brought around, judging that domestic pushback from protesting farmers would be too great if Paris voted for the trade deal.
The maximum amount of South American beef the trade pact would permit into Europe at lower tariff rates would equate to about 1.5 per cent of beef produced by all EU states.
Ireland currently only exports a very small amount of agri-food products to Mercosur countries. Steep import tariffs ranging up to 55 per cent effectively make trade unviable, but these duties will be slashed or removed entirely as part of the trade deal.