EU pressured to remove beef from Mercosur trade talks

Farming groups are piling pressure on the European Union to remove beef from its negotiations with a South American trading bloc, Mercosur.

British farmers could be impacted by such a deal, even if the UK exits the EU (see more below).

An offer from the EU to Mercosur to allow in 78,000t of hormone-free beef was made in Spring 2016, but later removed.

But the EU is now planning to put beef (and ethanol) back on the negotiating table in the coming weeks.

Meat Industry Ireland called on the Irish government to block such a move, raising concerns about a double whammy from potentially losing free access to its biggest market, the UK, after Brexit.

See also: Three Brexit scenarios could be positive for UK milk prices

European farming union Copa-Cogeca warned that including beef in a Mercosur deal could “threaten quality EU beef supplies, growth and jobs in rural areas”.

Whether a trade deal goes ahead – and therefore whether UK producers are affected – is a “huge if” though, said David Swales, head of strategic insight and AHDB.

The beef sector is hugely sensitive for the EU and came close to sinking the EU-Canada trade deal, he added. Personally, he said he would be surprised if the EU didn’t continue to protect the sector. 

How could it impact UK producers?

The UK is a net importer of beef, with more than 90% of the product coming from other EU countries.

About the same proportion of UK exports go to the EU, but a significant volume of this is cow beef, which is processed on the continent before being imported back to the UK, said Mr Swales.

The Latin American countries have significantly lower cost of production than the UK and EU, so there could be scope to increase imports to the UK.

Such beef doesn’t tend to be seen on UK retail shelves as British supermarkets are currently largely committed to UK and Irish beef – but it could become more commonplace in the food service sector, he said.

Outside the EU, the UK could still be affected indirectly. Ireland, a big beef producer and the UK’s main import source for beef, could see its exports to the continent disrupted by a Mercosur trade deal.

This could lead it to target the UK market even more.

But whether and how UK producers and the EU market is disrupted if a deal goes ahead will also depend largely on what volumes of tariff-free beef are allowed in and whether these are low-cost carcasses or high-value cuts, said Mr Swales.