Trading our way out of an almighty mess

As we await the final outcomes of the proposed US tariff impositions on EU exports, the  'Law of Unintended Consequences' is kicking in. It might also be described as 'never missing a chance to turn a crisis into an opportunity'. Our EU leadership wants to conclude the long-proposed Mercosur Trade Agreement, which would open new trading opportunities with Argentina, Brazil, Uruguay and Paraguay. With a combined population touching 300 million people, the benefits to European exporters are potentially significant. The ongoing confrontation with the US will drive the impetus to get the Mercosur agreement implemented as soon as possible. It will be seen as a necessary and useful counterbalance to the cross-Atlantic stand-off with President Trump. Eyes and thoughts of Mercosur opponents have been distracted by kite-flying EU budget proposals and, while European and Irish cattle producers are naturally opposed to any agreement that could put pressure on domestic meat prices, their concerns might not be seriously considered, with a ‘needs must’ Mercosur-EU agreement likely to be fully concluded before the EU Commission’s summer recess. An €8/kg base price for beef is also lulling producers into a sense of security, false or otherwise. Meanwhile, we can also expect progress towards the full implementation of the Canada-EU Comprehensive Economic and Trade Agreement (CETA). In theory, CETA is a done deal, with full implementation delayed by various legal challenges and general tardiness. Expect full speed ahead in the coming months on all trade opportunities as Europe attempts to counterbalance a new order in global trade, the outlines of which are only now emerging. As Europe rearms, it must also reignite its Member State economies. With economic and financial stagnation afflicting several EU Member States, most notably Germany and France, the only means of securing the additional finance required to safeguard CAP funding - as well as provide adequate financing for environmental repairs, border defence, Ukrainian financial and military support, and the increasing societal demands on individual Member States and the EU as a whole - is to lift economic output and increase external trade. A total Brexit reversal is not yet a viable prospect, but we are witnessing the UK taking a more pragmatic approach towards reengagement with its neighbouring EU, the wealthiest consumer market on the planet. All bets are off as Prime Minister Starmer is assailed on every side by ideologically extremist Brexiteers, ever-increasing budgetary demands, and Trump-inspired global trade instabilities. Add in a UK economy that is marginally in growth mode. Again, we should expect further realignment of UK/EU priorities before the year is ended. The Irish economy continues to perform well, with economic growth of up to three per cent still expected for 2025. That’s well in excess of most EU countries so we are something of an outlier. While the growth figures are positive, much depends on decisions and outcomes almost entirely beyond our influence. As farmers, we produce almost nine times more milk and meat than we consume. That makes us reliant on a relatively open global trading regime. While there are threats to our economic wellbeing from every viewpoint, the world, even if temporarily, is sliding into deficit in several essential food products, most notably livestock-based produce. The reasons include global disease impacts on production, environmental constraints and limitations on the resources necessary to drive food production. While this remains the case, Irish farming can look forward positively, despite trade deals, tariffs and other distractions. But we can take nothing for granted.