MercoPress. South Atlantic News Agency

New Irish government gauges ‘potential damage’ of Mercosur/EU trade talks

Enda Kenny, Ireland’s new PM celebrating on Election Day (Photo AP)

Mercosur negotiations and Ireland’s share of the EU agriculture spending are seen as the main challenging demands for the new Agriculture minister of the Fine Gael-Labour coalition government in Dublin.

According to reports in the Irish press “although the farming sector has weathered the recession better than most, the ongoing CAP (Common Agriculture Policy) reform process and the Mercosur trade negotiations have the potential to seriously dent farm incomes”.

Protecting the level of CAP payments to Irish farmers from the latest reforms will not be easy given the demand from Eastern Europe for a greater share of the total EU farm spend and the real threat to the overall CAP budget. Similarly, “the Mercosur negotiations appear to be building momentum and, as with the 2008 WTO talks, the agenda is being set by the Commission's trade section”.

Reports in the Dublin press indicate that it is difficult to get a real handle on the degree of progress that has been made so far in the talks but “the potential damage that could be done to the local beef industry was highlighted recently by the EU farmer body COPA, which estimated that prices could fall by 30% were South American beef producers allowed greater access to the European market”.

Furthermore “protecting the industry from the impact of any new proposals on reducing greenhouse gas emissions will be a major challenge”.

However “the over-riding consideration in choosing the new minister for agriculture should be suitability for the job and, more importantly, an ability to do it”.

Enda Kenny, who will be the new prime minister, anticipated his coalition government will seek to fulfil the pledge he made to renegotiate the onerous terms of the 85 billion Euro bailout deal agreed with the EU and the International Monetary Fund that lies at the heart of the upheaval in Irish politics.

Kenny wants far better bailout terms, including lower interest on rescue loans. He faces a deadline on March 25 when EU leaders sign off on any changes. But Ireland is in no position to sustain the conditions agreed by the previous government. The 5.8% interest charged on the bailout loan is unreasonably high and the ratio of government debt to GDP has grown from 25% in 2007 to 95%.

Living standards are falling and the Irish are voting with their feet, with about 1000 people leaving the country each week, point out the reports.

The mood of the Irish electorate is also quite clear: Fianna Fail, the party of power for most of the 80 years since Irish independence, was reduced to a rump having lost 60 of its 78 seats, getting just 15 per cent of first-preference votes. Their Green party coalition allies lost all seats.