Trade is a two-way transaction

Farming, for all the challenges it faces, contributes significantly to Ireland’s continuing economic success. Irish food exports annually hit new records. We argue as to whether the primary producers receive a fair share of the largesse, but we have no wish to shrink the size of the cake, only to pursue a fairer and more transparent allocation. Whether the Agri Food Regulator can change that dynamic remains to be seen. It needs greater powers, but that does not remove the potential of the regulator, if not to ensure a greater share of the profits from our food production accruing to the producer, then at least that a fuller disclosure of margins along the chain be disclosed. Food producers cannot endure an erosion of our competitiveness. We must, though, remember that competitiveness and protectionism are not compatible. 

Trade deal reservations
In the early years of our country’s independence, protectionism was pursued. It was not a sound strategy then, and it would not be a positive strategy for the global economy now. Globalisation has detractors. For Ireland, it has delivered success and wealth. We are a trading nation and, however difficult to accept, that is a two-way process. The negotiations over a trade agreement with the Mercosur countries have been ongoing intermittently for almost a quarter of a century. Several EU Member States baulked at the last hurdle to concluding an agreement in 2019. Now, there is another attempt to finalise the trade deal in the coming months. Many countries have again expressed reservations, and it is by no means certain that the long gestating trade deal can be concluded in 2025. The European Union is in a different and more difficult place than it was six years ago. It has fallen behind the other major trade blocs, US and China, in competitiveness terms. Its economic growth rates, too, are lagging. Add in the fact that Germany and France, the long-standing powerhouses and paymasters of Europe, have significant economic and financial problems, and the extent of the differences and difficulties become obvious. The EU needs a big economic win. A trade agreement with Mercosur is seen as that. At a time when the US seems to be reversing its outward trading philosophy by threatening the imposition of tariffs on its neighbours and trading partners, including the EU, there is a rationale for Europe to be seen as a supporter and driver of international trade and globalisation. Add in the threats to European carmakers and high-tech companies from Chinese imports and the necessity to broaden the scope of European trade becomes even more compelling. 

A two-way street
Irish food producers are rightly worried about the effects of increased food imports from South America. Our beef trade is seen as vulnerable to Brazilian and Argentinian import displacement in our lucrative European markets. Another 99,000 tonnes of high-end and lower-value beef cuts from the Mercosur countries are a relatively small tonnage in the greater scheme of European beef consumption. However, it only takes a small surplus to distort price and that is the real concern. The tentative EU-Mercosur trade agreement contains safeguard clauses allowing the EU to suspend aspects of the deal, including meat imports, in the event of market distortion being proven, though such damage-limitation is little consolation to producers at the receiving end of price falls. Equivalence of production standards is not a bulletproof argument against South American beef imports, given that the EU already imports 200,000 tonnes of Mercosur beef annually. Ireland exported 489,000 tonnes of beef in 2023. The unavoidable truth of trade is that it is a two-way street.