MercoPress. South Atlantic News Agency

EU report quantifies losses for farmers from a trade accord with Mercosur

Losses mainly for the beef sector could reach 3bn Euros annually by 2020, says the report

A week before the next round of negotiations for an ambitious association and trade agreement between the European Union and Mercosur, a paper from the EU Joint Research Study centre, JRS, quantifies the alleged losses of such a deal for European farmers.

The paper warns that European farmers could lose more than 3 billion Euros in annual revenue by 2020 under any free trade deal between the EU and Mercosur.

The deepest losses would be felt by beef producers in Ireland, Britain and France, hit by a predicted 200,000-ton annual increase in beef imports from Argentina, Brazil, Paraguay and Uruguay, the study for the European Commission showed.

In May 2010 the European Union and Mercosur re-launched talks stalled since 2004 with the aim of creating the world's biggest free-trade zone, with 750 million people and trade in goods and services worth 84 billion Euros in 2010.

The round of negotiations last met in Brussels and next week is scheduled to take place in Asuncion, Paraguay, that currently holds the Mercosur chair.

Negotiators remain hopeful of reaching an agreement later this year. Any deal is likely to see Europe open its markets to Mercosur farm imports in return for greater access to Mercosur markets for services and goods such as cars.

But the talks face strong opposition from almost a dozen EU governments such as France and Ireland, where influential farming groups have warned that an increase in cheaper food imports could put many EU producers out of business.

The study was produced for the Commission's agriculture department by the EU scientific research centre, JRC, and was presented to EU government trade officials in Brussels on Thursday, according to Reuters.

It showed that up to 33,000 farm jobs could be lost in Europe if the draft EU-Mercosur deal was approved.

”The overall impact of a possible EU-Mercosur free trade agreement on the EU agricultural sector is negative, but the intensity of the effects considerably varies across agricultural products (and) regions,” the study's authors said.
By 2020, EU beef production would fall by over 150,000 tons a year, with producer prices for the meat falling by nearly 8%, the study said.

Ireland would see its annual farm revenues fall by more than 4% in 2020, due to the high share of beef production in overall farm output, while farm income in Britain and France would fall by 3 and 2% respectively, the study showed.

EU cereals exports to the four Mercosur countries would increase by about 1 million tons a year by 2020, while the deal would have little impact on EU sugar production or prices, the authors said.

However the European Commission's Trade Department has said an EU-Mercosur trade deal would deliver net economic benefits worth about 4.5 billion Euros a year to both regions.