The Government has decided not to back a significant European Union trade deal with a South American bloc in a move that risks damaging relations with Brussels but preserves Coalition stability.
Taoiseach Micheál Martin said the decision, which came after speculation that the Coalition could change course and back the Mercosur agreement, was due to inadequate concessions by Brussels which had not allayed the concerns of Irish farmers.
Tánaiste Simon Harris said it was in line with a programme for government commitment to oppose the deal.
Supporting the deal would have faced strong resistance from the farming lobby and Independents supporting the Government, both of which welcomed the news.
Dublin was buoyed on Thursday evening when the French government confirmed it too will oppose the deal, although the trade agreement is still expected to pass with the support of Italy in a vote on Friday.
However, European Commission officials were publicly and privately critical of the Government decision.
Peter Power, the head of the European Commission representation in Ireland, told RTÉ Radio that Ireland’s concerns had been listened to and accommodated.
“It is a big disappointment,” he said, questioning whether the deal would now go through at all.
Mr Power said the concerns were legitimate, but the farming lobby had exaggerated the impact of the deal.
“Ireland’s voice in this will be diminished somewhat,” he said.
Mercosur is a South American free-trade bloc consisting, for the purposes of the deal, of Brazil, Argentina, Uruguay and Paraguay.
Its major exports to the EU include agricultural products and minerals, while the EU exports machinery, chemicals and pharmaceuticals in return.
Fianna Fáil MEP Barry Andrews also indicated his disappointment, saying the decision was a “testament to the power of the agricultural body” but that the debate in Ireland had “focused exclusively on beef”.
While he said that was an important element, other sectors stood to “obviously benefit”. This had been “completely ignored and set to one side” during the debate.
Two senior commission officials separately expressed the view it would specifically harm relations between the Government and commission president Ursula von der Leyen.
A third official expressed the view it would hurt relations between Ireland and the commission without mentioning Ms Von der Leyen by name.
In the wake of the decision, a Fianna Fáil figure expressed concern about the potential impact on relations with Brussels, including accommodating future Irish “asks” in areas such as the Common Agricultural Policy.
Two Fine Gael sources accepted there would be unhappiness in Brussels, but they expressed the view that Ireland was now among the biggest contributors to the EU budget on a per-capita basis, with one arguing the Government had acted in line with its mandate.
Minister of State for European Affairs Thomas Byrne said that, notwithstanding the Government decision, Ireland would likely be one of the biggest beneficiaries of the deal, including the agri-food sector.
The Mercosur deal will also need to be agreed by a majority of MEPs in the European Parliament, where voting coalitions have become much more volatile and unpredictable.
Should national governments approve the trade agreement on Friday, the European Parliament would vote in the coming weeks.