Wednesday, 3 July 2019
EU-Mercosur Trade Agreement: Statements
I appreciate the opportunity to address the Seanad this afternoon. The Mercosur agreement reached last Friday was arrived at following 20 years of negotiations.
It is important to acknowledge just how vital international trade deals are for Ireland. As a small, open, export-led economy, we very much support balanced international trade. The key word there is "balance". The Government needs to go through this deal in detail to see if it strikes the right balance for Ireland. As somebody who lives on a beef farm, I absolutely recognise and appreciate the genuine concerns expressed by our farming community over the Mercosur deal. The Government hears those concerns and we understand them.
We need to recognise the positives in this deal for Ireland. There are significant benefits for Irish exporters in sectors such as business services, chemicals, the drinks industry, machinery, medical devices and the dairy industry with a reduction or elimination of tariffs and barriers to trade for these sectors. In 2018, Ireland exported almost €2 billion worth of goods and services to the Mercosur region. Trade with the region has grown by almost one fifth in the period from 2010 to 2016. Against this level of export trade from Ireland to the Mercosur region, we anticipate the EU-Mercosur agreement will allow Irish exporters to expand faster and take advantage of new opportunities. In this regard, analysis by my Department estimates that a potential doubling of annual goods and services exports from Ireland is possible over the period to 2030. The deal ensures Irish whiskey and Irish cream liqueur are protected under the EU’s geographical indication, GI, scheme. There are special provisions for SMEs in the agreement. SMEs benefit most from the simplification of exporting and customs procedures, as the savings accrued are proportionately greater for them. There are also positives for the dairy sector with tariffs on 45,000 tonnes of product, including cheese, milk powder and infant formula, moving from approximately 19% to zero over a ten-year period, presenting significant opportunities for the sector. Those are some of the benefits from this deal and it is important to put those on the record here today.
However, I do not claim that this deal is perfect. As I said at the outset, I absolutely recognise the concerns of our farmers. While beef has been in the headlines in recent days, I know there are also very real concerns in the poultry and pig sectors. Sometimes it is easy to walk into the Dáil or Seanad and criticise the Government and play politics with an issue like this. I come from a rural community and I have spent all my life on a farm. The Government fought to achieve the best deal possible for our farmers.
This is a deal negotiated at EU level. As a member state, Ireland has raised serious concerns over a long period of time over beef access. I have raised these concerns at every opportunity at European Trade Council meetings. I also raised it directly with the trade Commissioner, Cecilia Malmström. As recently as 31 May, I again wrote to her highlighting our serious concerns, particularly given the current challenges and uncertainty facing the Irish beef sector in light of Brexit. There has been a sustained effort across Government on the matter, with both the Minister, Deputy Creed, and the Taoiseach also raising it at the highest levels.
We must remember the South American countries initially sought a beef quota of 300,000 tonnes and the deal on the table offers 99,000 tonnes.While that is still higher than we want it to be, it is important to remember that it is less than a third of what was originally sought. That reduction is due to the active efforts made by Ireland and other member states. It is important also to say that 99,000 tonnes will be split into 45% frozen, 55% fresh, and it is carcass weight equivalent, meaning the whole animal and not just prime cuts.
The agreement also ensures there will be equivalent standards. EU sanitary and phytosanitary, SPS, standards will not be relaxed in any way. They remain non-negotiable. The highest EU standards will be applied to all imported goods, especially food, so no hormone beef or genetically modified organisms, GMOs, will be allowed. I want to reassure farmers that equivalent standards are an integral part of this agreement.
In respect of concerns regarding climate change and deforestation, Mercosur, including Brazil, will have to implement fully the Paris climate agreement as part of this deal. If it does not it is void and the deal falls. I appreciate when this deal was announced last Friday that it struck fear within the farming community. It is important, however, to remember this is far from a done deal. This is an agreement in principle. It has to go through a legal process which could take up to two years. It then has to be voted through by a qualified majority on the trade Council. It also has to go through the European Parliament, where the outcome could be far from certain. After all that, it is highly likely that more than 40 parliaments, including this House will have their say on it. It is also important to remember that the quota for beef would be on a phased basis over five years, so we are talking about a deal here today that might not be fully felt until around 2028.
Meanwhile, we are staring down the barrel of a possible no-deal Brexit on 31 October which could deliver a serious shock to our economy and which, in particular, would have damaging consequences for the agriculture sector. In that context, with serious challenges such as Brexit facing us, we need to take a step back here and look at the bigger picture. That is why my Department, in conjunction with the Department of Agriculture, Food and the Marine, will now proceed to ensure a comprehensive, independent economic assessment is carried out on Mercosur. We have the time and space necessary to do that. The shape Brexit takes and its impact on the agriculture sector will need to be a key consideration of this economic assessment.
The Taoiseach has made it very clear that the Government has an open mind on this deal. As I have outlined, there are benefits in certain sectors but there are also negatives and we need to determine overall if this is going to be a win or a lose for our economy. We should not lose sight of the fact that in recent years we have had EU trade agreements with Japan, Vietnam, Singapore and Mexico which are very positive for our agriculture sector and which, in particular, provide for the export of 105,000 tonnes of European beef. Those were good trade deals for our agriculture sector. Mercosur is a difficult one. I accept that. What we have to do now as a Government is look at this deal in the round. That is what the economic assessment will do and it will ensure that the Government makes a fully informed decision when deciding what position to take when the ratification process on this deal commences in two years.
I think it was Mick Doyle, a famous Irish rugby player, coach and pundit, who coined the phrase "get your retaliation in early". I am intrigued to see that the Minister has taken that up today in her opening statement by criticising Opposition Members for playing politics. I for one have no intention of playing politics or going for headlines, punchlines or soundbites on an issue that is so important to rural Ireland, not just the agriculture sector or the beef-producing sector but rural Ireland in general. I am a beef farmer so I know what I am talking about in that regard and would never play politics with something so important to a sector that is already on its knees, and has been for several years. Pre-Brexit, the beef sector in this country was in crisis. Brexit has added a hammer blow to that crisis and, irrespective of what the Minister says about its timelines, this almost ratified deal seems to me and other farmers to be a fait accompli. Even if it is 2028 before we see the consequences for Irish farms, for the meat industry and the beef sector, which are price takers and are almost totally dependent on an export market and on a factory system that we all know has problems, the scaremongering has started.
Like Brexit for the past two and a half to three years, the Mercosur deal will be used and has been used as a scaremongering tactic on price fixing. Irish beef farmers started feeling the consequences of this proposal the morning after it was announced and the Minister cannot tell me anything different, such is the nature of the industry. The Minister rightly says, and I am not playing politics because we are almost singing off the same hymn sheet on this issue, that the Government, to judge by commentary in recent days, is opposed to this. I am aggrieved at the Government's progress in officially opposing it and having any effect on the outcome. The Minister says, to make it sound good, that the initial proposal from the South American side was for 300,000 tonnes and is almost praising herself for getting that down to 99,000 tonnes. In 2017, the Government was opposing 70,000 tonnes. Its brilliant negotiating skills to reduce that 70,000 tonnes has resulted in 99,000 tonnes.
While the Minister says the deal will be bound by equivalence and the Paris Agreement on climate change, there does not seem to be, from my reading of it, and I have not read the entire document, which is extensive, any guarantee that the Paris Agreement on climate change or equivalence in the standard of traceability and production imposed on us by the European Commission will have to be met by the South American countries. Their carbon footprint for beef production is four times that of ours. We hear daily when we discuss climate action and climate change the proposal bandied about by most people to reduce our herd and increase our afforestation on the land that would then be freed up. However, an area the size of Croke Park is turned every minute from rainforest in Brazil to beef production land.
That is the 99,000 tonnes we will take, on top of the 270,000 tonnes we take already with tariff, because it is produced cheaply due to the methods. The tariff is paid but the beef remains more competitively priced than Irish and European beef. There is never a good time for a bad story or bad news for any sector. We export 90% of our beef and in turn 90% of that goes to the UK. If there is to be a hard Brexit, as the Minister mentioned, and we lose that UK market, a big part of that beef will have to go to continental Europe. We have been trying to find markets in continental Europe. When the damage caused by Brexit is combined with this Mercosur deal, it will increase what is already 102% self-sufficiency in beef in Europe to 116%. That is based on the European Commission's report on the cumulative economic impact of future trade agreements on EU agriculture, which estimates that the European beef trade will take a hit of €5 billion and a price drop of 16%.It has been suggested that a €1 billion package will be offered to farmers for the disturbance of their markets. In such circumstances, there will be a shortfall of €4 billion. I have taken the €5 billion figure from a European Commission report.
I welcome the Minister's statement. I emphasise that she should continue to argue that a new report that takes Brexit into consideration should be compiled. There are now 27 European countries in this deal. When it was initiated, there were 28 countries. It is most likely that as we go forward, there will be just 27 countries. We are losing one of the stronger economies that would have been factored into the initial negotiations.
The Minister spoke about how the deal will be finally ratified. She concluded by saying it is "highly likely" that it will have to be passed by both Houses of the Oireachtas. That is not very reassuring to me, to anybody else in here or, in particular, to the Irish beef farmers who are watching this debate. That is a sell-out. The deal is either going to have to be passed by these Houses or it is not. There is no veto. I can say here and now that if the Upper and Lower Houses do not get an opportunity to pass or refuse to pass this deal, it is a sell-out. The words "highly likely" are not very reassuring. We need this to be clarified immediately.
I have mentioned climate action with regard to Irish beef farmers. The Minister spoke about the importance of this deal for SMEs. There are positives. I support trade deals that break down trade barriers and help to increase employment and exports. We cannot have a loss in one sector, as this deal will entail, to support other sectors. During this crash, SMEs in rural Ireland were kept going by the farming sector. Now that we have turned the corner, we seem to be turning our back on the agricultural sector at every opportunity. This is a particular problem in those parts of rural Ireland that are most in need of job creation and employment support. The SMEs that live off farming communities are those most in need of our support. We cannot sell them out for other SMEs that may or may not be able to tender for export opportunities to South America.
This debate will conclude at 4 p.m. Many Senators are seeking to contribute. I ask Senators to share time with their party or group colleagues if possible. I understand that Senator Humphreys has an agreement to get in early.
I suggest that the Acting Leader should review the situation because we have a gap between 4 p.m. and 4.30 p.m. when nothing is happening. If the Minister agrees to stay for a few extra minutes, perhaps this debate could be extended slightly to take in everybody.
I will try not to use all the time available to me. This agreement should not come as a surprise given that it has been negotiated over 20 years. I recognise that there are problems in the beef-farming industry. That difficulty has to be recognised and in some way alleviated as we go forward. I believe in fair trade deals. Trade deals have to be fair. We have a small open economy. We trade right across the world.
There is a danger that South American countries will drift towards American control and Trumpian ideas. That was evident during last year's elections in Brazil. All of this poses a danger to the Paris accord.
The positive aspects of this deal should be recognised. The agreement includes an obligation to implement the international organisation of fundamental standards and freedom of associations. It recognises the right of collective bargaining, which we have campaigned for in this country for many years and has recently been recognised in law here. The deal recognises freedom of association. All of these are key elements within the deal. It is important to raise workers' standards across South America. Anyone who understands the history of what has been happening in South America will see the fundamental importance of these matters.
The Paris accord on climate change will not be implemented and regulated by blue helmets. We are not going to be able to send the UN into Brazil to protect the rain forest. We have to ensure it is controlled by international agreements, including trade agreements. I would love to see blue helmets implementing the Paris accord, but that is not going to happen. It is going to be implemented and regulated by bureaucrats. Satellite photographs will be used to make sure agreements that are made on an international basis are enforced. Draft trade agreements include ways and mechanisms to enforce the Paris accord. That has to be recognised. There is agreement on the restoration and reforestation of 12 million ha of forest. That is important because America and Trump have reneged on the Paris accord. We are tying several important South American countries into the Paris accord under an international trade agreement. The agreement will fall if they do not meet these obligations.
The World Health Organization has continually flagged the use of antibiotics in certain sectors of agriculture, including the beef, poultry and pigmeat sectors. Antibiotics can work their way into the human food chain. We need to be honest about the fact that the regulations in South America are weak.
I emphasise that this is only a draft agreement. We will get the proof of this agreement when we get the detail right and make sure climate change is stitched into it. These countries must recognise that. At all stages over recent weeks and months, everybody has been speaking about the importance of climate change. Practical steps are needed to tie countries into the process. It is a question of the carrot and the stick. We can engage in fair trade and open our markets, but if the regulations are not met we can close those markets again.
It is worth noting that the deal states that food safety standards are absolutely not for negotiation. A 100% level of compliance with EU food safety standards will have to be achieved. The deal makes it clear that EU food safety standards are non-negotiable and will be applied rigorously. It is worth noting that the deal states that the EU Food and Veterinary Office, which is based in County Meath, will be the authority that ensures this happens.
We can go with the soundbites I have been listening to since the weekend, or we can sit down and start looking at the agreement in detail. We can selfishly look at how this deal affects Ireland, or we can start looking at our climate and our planet as a whole. If we want to tackle climate change, we must encourage other countries that have difficulties in coming along with the climate effort. Some of that will involve doing trade deals. We have to accept that such deals will not always go in our favour. As a First World country, Ireland is part of the problem. We have to help Third World countries to meet certain standards. That will be done through fair trade deals.
I hope and pray that the Government will take care when the detail of this agreement is being finalised. I hope we will protect our environment and workers' rights and assist domestic industries, such as the beef industry, where such assistance is needed. We need to make sure it receives as much help as possible.We have a broader obligation to humanity but that has fallen at the first hurdle. Before the local and European elections were held, every party and the Government said, "Oh, my God. The green issue is the issue for the future". I have been saying for three years that a price must be paid to get our climate right and these prices must be paid over the coming months, years and decades. We have to get fair trade correct and must assist Third World countries. We have to protect our own industries as much as possible but above all, we have a responsibility to humanity and to the planet. I am sorry to say that too often, over the past three or four days, I have heard sound bites taken straight out of the IFA's handbook. We must get beyond interest groups and think of the bigger picture. We have to ensure that we protect the rainforests. We have to ensure that any international agreements are enforced, which is key if we want to stop the deforestation of the rainforests.
"Disappointment", "betrayal", "catastrophic", "reckless", "irresponsible" and "devastating". These are not my words but all of them have been used in the press by journalists and farm lobby groups to describe the deal in the last number of days. We should not be surprised because the deal has the potential to cripple the industry here.
In a former life, I was the president of the Ulster Farmers' Union. Nearly four years ago we were acutely aware of Mercosur and the risks it presented. In fact, the deal has been on the table for nearly 20 years. We were always fearful that agriculture and food would be used as trading or bargaining chips in a deal. We warned people about the impact the deal could have, the potential damage and the devastating effect it could have on the meat industry and, lo and behold, it has happened. The risks presented by the deal four years ago are exactly the same now.
First, granting access to the European market for 99,000 tonnes of product at a reduced tariff is still a major concern albeit a reduction from the initial figure of 300,000 tonnes. A beef industry under immense pressure on a number of fronts cannot take any more burdens. There is no question that the deal will ultimately impact on the European market where cheaper product, sourced in South America, will depress the market. The deal will curtail any improvement in prices. Most important, the deal will leave our farmers and producers at a distinct disadvantage. Products will be imported into Europe without the assurances and guarantees that we currently demand from our own farmers. The products sourced in regions will not be bound by the environmental protections and regulations that we have observe. Products will be sourced from places where no minimum wage exists, where workers' rights are not protected and where the costs of production are stripped back to the bare minimum. In reality, when products reach these shores they will be judged as being of equal standing as Irish beef, which they definitely will not. Will discerning consumers differentiate or identify different production methods? Will they be willing to pay more for Irish beef? Will they question the validity of cheaper food? I think not. In fact, I know they will not because many consumers cannot afford to do so. Anyone who struggles to get their weekly spend on food and provisions down may welcome cheaper food but what is the real cost of doing so?
On this island we have world-leading standards for traceability, animal welfare, food safety and environmental protections, which address all of the concerns consumers may have regarding where their food comes from and how it is produced. This deal presents a double standards policy and completely discriminates against our own farmers and producers. However, it must be stated that the deal is not bad for all sectors, as the Minister has indicated. The dairy sector is set to gain and possibly capitalise on opportunities. The Minister highlighted the examples of cream liqueurs, cheese, milk powder and infant formula. I have no doubt that many other sectors of trade and industry will benefit from the Mercosur deal. The European car industry and many others have openly welcomed the deal but that is of little consolation or comfort to anyone in the Irish beef industry. Where do we go from here? What are the solutions? How will we deal with this matter? The industry must be given solutions to these problems within the deal. The deal has been agreed in principle but the end deal will probably look quite similar to what we have in front of us.
Standards of food production on imported goods must be identified with robust monitoring and examples of malpractice highlighted as was the case in the audit reports performed by the EU Commission in 2013 and 2017, respectively. The reports clearly identified that Mercosur countries were not complying with the EU's strict sanitary standards or food safety standards. Furthermore, as regards sustainability, it is imperative that the Mercosur countries are held to account with binding commitments to the Paris climate agreement, under which Brazil has committed to end illegal deforestation by 2030 and restore and reforest 12 million hectares of forest, of which we have seen very little evidence.
In addition, we must consider mechanisms to ensure viable businesses remain viable. We must also avoid land abandonment, which could become a reality if margins are further eroded in beef production. We must ensure that assistance to underpin sustainability and profitability is implemented. Additionally, we must educate consumers to question food sourcing and integrity, and to place food procurement at a much higher priority in their value set. Consumers must get all the facts and information to make informed decisions when they purchase.
This week has not been a good one for Irish beef producers and many people have likened the deal to the boy who cried wolf. I urge people to be under no illusion because the wolf is at our door and the threat is real. The deal has created another layer of uncertainty in an industry facing unheralded pressure from a lack of profitability and environmental concerns, veganism, vegetarianism and alternative proteins, and draws into question its sustainability and future. The one thing that is for sure is that if we do not protect this industry then we will lose it.
As has been demonstrated by a number of scientists and academics, livestock production and beef production will be critical components in maintaining a healthy environment and rural landscape, to return nutrients to the soil, to maintain pastures and uplands and will be a vital player in the business of carbon management. The ideology of a world of vegans and vegetarians that is devoid of livestock but planted with fruit and vegetables has been proven to be unsustainable. Livestock production and beef production will be part of the mix for a healthy planet.
In conclusion, we must deal with uncertainty and give clarity. We must support sustainability and ensure margins. We have a deal and two years of a legal process before us. Therefore, we must engage immediately to protect those who will be the most affected.
As the Minister will know, the Amazon rainforest represents half of the world's remaining rainforest. Last month, an area of 739 km2 was destroyed which equates to two football pitches every minutes. She is doing commerce with one of the most right-wing political leaders in the world, President Bolsonaro.
President Bolsonaro is a climate change denier and is up to his neck with the ranchers and people who are destroying the rainforest whom he funds and backs. He has made no secret of the fact that this is his agenda.
Farmers in Donegal and any other county in this State live up to very onerous environmental legislation and regulations and inspectors check farms of all sizes. Farmers rely on the cheque to arrive and always worry about inspections. Farm planners try to make farmers live up to the standards that we are all proud of in the beef sector but the work is tough. We talk to young people to get green flags displayed at their schools. We also talk about climate change being the challenge of our generation and acknowledge there is a crisis.These Houses accept that it is a climate crisis. The proposed Commissioner, the Irishman Phil Hogan, says with a serious face that this is a fair and balanced deal. It is an absolute scandal. It is an insult to all the people working in our beef sector who try to live up to the standards we are told are absolutely necessary because of the climate crisis we face; and now we are proposing a deal with Bolsonaro and telling people not to worry because he will sign up to the Paris Protocols and transform overnight from a climate change denier to a Green Party candidate in the next presidential election in Brazil. That is utter nonsense. We know that this deal is really about the people who inhabit the corridors of Brussels: the lobbyists for big business. This is about major corporations and industries getting access to the South American markets to privatise their resources and drive down workers' rights. We can be sure that that is what this deal is all about.
Back in the day, it was said that we sold out the fishing communities.
We absolutely did, given the waters that we gave away. I suppose it was always going to come to this, but we are now selling out the farming sector. Beef farmers have been struggling for so many years under the cheap food policy of the EU, as my colleague Senator Marshall mentioned. We have forced farmers into a market where the meat factories, supermarkets and corporations dictate the farming model. Farmers have been forced away from practices that were traditionally organic and environmentally sustainable to an intensive farming model that feeds a corporation-driven food policy. How dare anybody in the European Commission lecture anybody in Ireland about our responsibilities in tackling climate change? What hypocrites they are, given that they enter into commerce with Bolsonaro, knowing what is happening to our rainforest and to the environmental standards that the ranchers who got that guy elected live under. How dare any inspector lecture farmers across this State, when they have put this deal into ink?
As a parliamentarian representing the rural community and others, I join my colleagues on all sides and demand that the Government does what is right. This is about not just the beef sector but consistency. It is about being able to look young people in the eye when the green flags are raised above their schools and about their future. This is a complete sell-out of our beef sector. Our fishing sector was previously sold out and this is a sell-out of those whose hearts are in tackling climate change and in doing what is right by our future.
What has been agreed is a political agreement and so we cannot say that we cannot play politics with it; it is a political agreement. However, it still has to be turned into a legal document. This process will take approximately two years and then it will be brought to the Council of Ministers for a vote. Ireland does not have a veto because voting is done on a qualified majority and not unanimously, but these changes came in as a consequence of the Nice and Lisbon treaties. Sinn Féin opposed these treaties, warning at the time of the dangers to agriculture. Other countries such as Belgium, France and Poland have spoken out against the agreement. To stop it, Ireland would need them and others to vote against the agreement. If the deal was passed by the Council of Ministers, it would then go to the European Parliament for ratification. There is a debate over whether it is a so-called mixed agreement, and therefore needs ratification by the Parliaments of all member states, or whether it can simply be decided upon by the Council of Ministers and the European Parliament. The Government must act to get clarification on all these matters - we really need to know this information - and then act accordingly.
Sinn Féin came in for criticism during the recent European Parliament elections for opposing every treaty. However, we opposed those treaties because they left Ireland open to harmful trade deals such as this one. The treaties are exactly why we are in the mess we are in. There is no point saying that it will be two or eight years down the line before the deal is done; we have seen the same thing happen with designations. Rural Ireland has been destroyed by designations. The very people who stand up here and give out about designations are the same people whose own parties voted for it. Not only did they implement the designations as asked by the EU, saying "yes, sir; no, sir", they went on to implement further designations to show what good boys and girls they are. This deal is devastating for Irish beef farmers and the west of Ireland, in particular for Mayo.
I am bemused by the Sinn Féin presentation today. On the one hand, Senator Mac Lochlainn espouses a great love for climate, yet his colleague and leader in the House, Senator Conway-Walsh, then gives out about special areas of protection and designations that protect our environment. That shows the confusion that pertains in this House and elsewhere when it comes to Sinn Féin policy.
As the Minister has pointed out, we need to go through this deal in detail. There are many aspects of it, affecting many parts of our community, not just rural Ireland and the beef sector but other parts of the rural economy such as the dairy sector. Of course we should be concerned about our beef producers and should protect them. We need time to examine this deal to see how we can mitigate the impact of 99,000 tonnes more beef coming into the EU market, which we sell into. However, we also have to look at the positive impact it will have on the drinks industry, machinery and medical devices, an area in which we are a world leader.
Senator Mac Lochlainn talks of a sell-out, but there was no sell-out here whatever. While we might consider the rainforests ours, the people of Brazil might have a very different attitude, as we might if they called the bogs in Ireland "our bogs". The best way to influence people is to negotiate, have a relationship and trade with them, not to ignore them.
There is much in this deal that can be good and many thousands of jobs can flow from it, but there are dangers too. The Minister highlighted those dangers clearly, as somebody who lives in rural Ireland and grew up on a beef farm. I grew up on a farm in north County Dublin and there are 800 farmers in my constituency. I am concerned for their welfare but I am also concerned about the climate and am committed to our climate change protocol. I want to see it protected for our own well-being and for the future of our children, their children and their children's children. However, we will not do that by refusing to deal with those who are in control of large tranches of our earth, where the lows of the world exist. Our best chance of influencing them is to try to bring them around to our way of thinking and up to our standards. This deal makes it very clear that there will be no dilution of standards in beef production.
The EU cannot go backwards and this is a deal for both sides. It is worthy of proper and full examination. We should not throw the baby out with the bathwater, as some here intend for us to do, before we have even seen what the deal really means. There is much time left to examine this. If it transpires that this Government or the next - there could be an election between now and then - deem it inappropriate for us to pursue this deal, I have no doubt that we will oppose it. As has been outlined, we have European allies in Poland, Belgium and France, which is a heavy hitter in this area, and others will share our concerns, given the pigmeat industry in Denmark and the Netherlands.
This is not a done deal; it is a headline deal and an agreement in principle, which needs to be examined. We can be negative and throw it out before examining it or we can be sensible and look at the positives and at mitigating the negative impacts to bring us into a new market. I will finish with this. At a time when we might be about to lose the British market because of Brexit, we need new partners, new allies and new markets.
I welcome my constituency colleague, the Minister for Business, Enterprise and Innovation, Deputy Heather Humphreys. I know from working with her in the constituency of her concern for the welfare of farmers. I acknowledge, as did my colleague, the potential benefits of the deal. However, I wish to focus on the potential pitfalls. At present, beef farmers are experiencing dreadful conditions. I find it strange that store cattle are making a very good price, and perhaps my colleagues who are beef farming will tell me about it. The problem is at the fattening stage.
The Minister stated there will be equivalence of standards and the Government would want to ensure that is the case, but how does one control the quality of meat so that we do not get imports of hormone beef? The departure of the UK from the European Union could help us in that there would be a greater imperative for the UK to get cheaper beef because of the demography of its population. How the import of beef will be vetted is a major issue. We would need alternative markets to meet the market that will be displaced from the import of 99,000 tonnes of beef under the Mercosur agreement. If as Senator Marshall said it will represent a 16% reduction of farmer incomes, we would have to compensate our farmers directly to make up that loss of 16% of income. We would have to do that.
If the economic analysis were to throw up a situation where overall Ireland benefits from this, then we have to focus on our beef farmers and support them in two ways through this. We would have to make direct payment support and open up new markets. I know that some new markets have been opened up in recent times. There would have to be measures to ensure equivalent, hormone-free quality beef.
Coming from Cavan, I wish to stress the importance of the pig and poultry sectors. Farms in counties Cavan and Monaghan are not specifically beef or dairy, as they might be in the south. The small farms in Cavan will rear store cattle, and have a small dairy herd and both need protection.
My point is that we to protect our farmers through this process. There can be no diminution of their income, as the income of the small farmers and those engaged in mixed farming is not there and we need to save them.
I am taking six minutes and Senator Norris must be satisfied with two minutes.
I have previously spoken in the House on the CETA trade agreement and other trade agreements. It is important that we are really clear that when we speak about trade it is not a simple matter of those who are pro-trade and those who are anti-trade, those who are protectionist and those who are open. It is and must always be about what is the best quality of trade deal, the kind of trade that will be constructive and positive and deliver for the citizens that we represent as politicians as well as for corporate interests and that is why we need to review and examine trade policies and strategies on a regular basis. That is a fundamental point. Concerns have been raised about regulations around the investment court system and other trade agreement. We need to think carefully about the ratification of the last part of the CETA agreement because of the investment courts and the chill we have seen from legal challenge, for example the legal challenge that the coal industry sought to bring against the introduction of smokeless coal. We are at a moment now when we need a new kind of trade policy and a new trade mandate.
It has been mentioned frequently that the Mercosur agreement has been 20 years in the making and they have been negotiating for 20 years. Some of that is evident in that much of the proposal is dated. Twenty years is not something one must accept, but it must be noted that much has changed in the world in that period. It was mentioned that we may be looking at 27 countries in the European Union rather than 28 but that we are also looking not just at the Paris Agreement but the climate crisis which has necessitated the Paris Agreement. The Paris Agreement is not the end, there will be further agreements as the climate crisis intensifies. There will be further standards that need to be added in terms of biodiversity. Similarly, the sustainable development goals are an internationally agreed blueprint for what sustainable development should look like. Surely the trade we have globally between countries is part of the picture for sustainable development. It concerns me that I have seen no reference to the sustainable development goals and the 2030 agenda anywhere in respect of the discussion on this agreement. If we have an agreed idea of what it means to develop in a sustainable way, environmentally, socially and inclusively, that should be reflected in the trade deals that we mark down for the future.
The concerns of the beef industry have been raised but there are many industries in other areas that are of concern. I note that Irish whiskey and Irish cream liqueur were mentioned quite a lot. It speaks to the fact that the alcohol lobby are very strong but there are more than 320 exceptions. Are those the only two? What other exemptions are there? What about future produce, such as the seaweed production which is now becoming an industry? What protections have we for the development of high quality produce, which is an area that we have urging farmers to move into as they may move away from beef production for other reasons in the future? One cannot overlook the fact that President Bolsonaro in his first hundred days legalised 150 new forms of pesticide. Let us consider that in terms of the impact on biodiversity in what is the treasure box of the world, the rainforests. Senator Reilly, I note that the rainforest is of global interest and our bogs are of global interest. When one looks at the incursions into indigenous lands and the dismantling of environmental protections under Bolsonaro, these are very serious issues; simply requiring a planting of trees does not replace the rich biodiversity of the rainforest, which cannot be replaced by commercial planting here or anywhere else. It is about the millennia of development.
In terms of pharmaceuticals that were mentioned, of course the treasure chest for pharmaceuticals is the rainforest. That is where so many of the medications which have saved lives around the world have come from.
There is a duty on the European Union to ensure that human rights are protected. We have very serious human rights violations, including for the LGBT community and others that we are seeing in Brazil. Today, I met advocates who talked about the blood coal from Colombia, the fact that Moneypoint is using 90% of coal sourced from Colombia, in spite of massive human rights issues. Again we had the EU Colombia Peru trade deal. We were assured at the time that human rights concerns would always be addressed, yet it seems that advocates have to travel the world looking for justice and not getting it, because of the inadequacy. These are measures that must be addressed.
The Minister has mentioned having an open mind about the process. An open mind is not enough, we need action. We need an active strategy. We do not want the Irish Government watching with interest and an open mind. We need a new strategy, active engagement and we need to know very vitally that it is not enough to say that it is highly likely that we may get to discuss it. We need a guarantee from the Government that it will go to both Houses of the Oireachtas to discuss it and we will oppose if the European Commission seeks to challenge our right for ratification on this. We know the European Commission has sought to avoid it.These are very practical measures.
I will conclude and pass to my colleague. This is going to be an ongoing issue. This is the outgoing European Commission. Let us hope that the new Commission will adopt a more progressive strategy and engage more actively with national governments and parliaments to ensure that trade serves citizens and not just corporations.
I listened with interest. I spoke passionately on the Order of Business about the Mercosur deal yesterday. Senator Humphreys spoke after me. He was also passionate on this topic and he spoke about the details of the agreement and the necessity of understanding that, etc. I listened to him again today and he was not as impressive at all. He did not convince me. I was convinced by Senator Mac Lochlainn-----
-----and his passionate contribution to this debate. He is 100% right about Bolsonaro and the ranchers. Irish beef is four times more compliant, it is traceable and it is monitored for hormones. If we look at the deal, there is also a question concerning the distribution of the cuts. There could be up to a 30% of an impact on the Irish beef industry. I am not just concerned with the beef.
I am concerned for the planet. That is why I used bad language on the Order of Business. I did want to get a soundbite. I wanted to get something out there and to get the people of Ireland to wake up to what is happening on this planet. I have been in the Amazon basin and seen the deforestation. I have heard the chainsaws working and seen the enormous clouds of smoke over the forest. It is appalling what is going on there. People are not speaking out against that. Regarding what was said about reforestation, that is a complete load of nonsense. The rain forest is a naturally-occurring wilderness in which all kinds of diversity occurs. It is not possible to replicate that diversity with replanting. That is complete and utter nonsense as well.
The Minister stated that she has heard and understood the concerns expressed. That is not enough. We need action. Regarding her earlier statement that in the context of "concerns regarding climate change and deforestation, Mercosur, including Brazil, will have to implement fully the Paris climate agreement as part of this deal" and so on. Who is going to monitor that? What mechanism will be involved? I do not trust Bolsonaro for one second, particularly when he is protected by the other arch-climate change denier, President Trump. We have to have proper monitoring mechanisms or it will be a complete farce and a load of nonsense.
It is positive that the Minister and her colleagues, in particular the Taoiseach and the Minister for Agriculture, Food and the Marine, Deputy Creed, are taking this issue seriously. As others have stated, this deal, if passed by the European Council and Parliament, has the potential to decimate the Irish beef market. I listened to Mr. Phil Hogan, European Commissioner for Agriculture and Rural Development, on the radio on Saturday morning. He spoke about a €1 billion displacement fund having been secured as part of this deal. What farmers really want, however, is a fair price for their produce. They do not want displacement funds. They produce beef to the highest possible standards and they want a fair price for that produce. As the Minister stated, this is not a completed deal. We need to ensure that EU beef markets are protected, not just in Ireland but in other European countries.
As other Senators have said, Ireland's predominantly grass-based beef production is one of the most carbon efficient in the world while Brazil removes vast amounts of rain forest each year to enable extra beef production. This point must also be recognised, as others have stated. Our farmers, along with other European farmers, must be supported accordingly. The Minister has stated that the Government will be looking at this deal in detail. It is important that we ensure better outcomes for farmers, meet the challenges of climate change and protect the integrity of the EU food market.
I will be brief. I welcome this important debate. I would also like to have the Minister for Agriculture, Food and the Marine, Deputy Creed, in the House but I respect all that the Minister has had to say on this issue. Much of this debate has been pretty surreal or has oscillated between reality and unreality. Trade is really important. We are a small, open economy and we like to reward enterprise. We also see the benefits of people doing so. There is no objection to that in principle. Let us be very clear, however, that our beef farmers are being asked to take one for the team. This deal boils down to that.
The European Union, which I will call the western world, is dressing up this deal with a smattering of icing around the Paris Agreement. It is being claimed that this is really going to bring these South American countries into line and all of the developing countries that cannot possibly go in the direction in which we need them to go. The other unreality is a failure to recognise our position on the planet. That is absolutely fantastic and I will not take from that. Let us compare the position and size of our country with the size and position of those South American countries. Ultimately, we do not need any more beef coming into the European market. Our farmers are already demoralised. If they were not demoralised before, they will be now when they see what is before them. Why is the beef from South America cheaper? It is not of the same standard. What about the 270,000 tonnes already coming in? We are now faced with the prospect of those imports having the same reduced tariff as the 99,000 tonnes to come.
Our farmers are increasingly being edged out. I agree with Senator Hopkins that we do not want a €1 billion rescue package on the premise that we are going to have all of this increased trade, whether in pharmaceuticals, this, that or the other. I have the height of respect for the foreign direct investment industries operating here. We are in danger, however, of putting all of our eggs in one basket and forgetting that the champion and leading light in our economic recovery was our agriculture and agrifood sector. Some 170,000 people are employed in that sector. I know that not all of those people are working in the beef sector. We are, however, losing the run of ourselves a bit.
Regarding standards, previous speakers have referred to traceability and the use of antibiotics and hormones. We set up the Common Agricultural Policy, CAP, and we have rules and regulations for everything to do with farming. We are now stating that that does not really matter because we will take in beef from somewhere else as long as a few boxes are ticked. I do not believe that we are going to be in South America monitoring carbon emissions and standards in any way comparable to what happens here. Farms and farm families have to deal with that real burden. When we get down to the essentials of this deal, we are talking about farms and farm families. The way that this is proceeding means that we are talking about changing the face of rural Ireland. The farmers have to be protected. That is what I believe.
I would like to see not just an economic assessment of the impact of this deal but also an assessment of the carbon emissions, and that has to be based on reality. I have a question I asked here earlier for the Minister on this area. Are all of the cars that are going to be sold to South America going to be electric vehicles or will they be diesel and petrol? Do we have details concerning that aspect of the deal? Is it the case that the manufacturers will be able to dump all of the vehicles that they cannot sell in Europe in South America? That will show the hypocrisy and double speak of the green agenda and the western world. I subscribe to the idea of sustainability. On a somewhat related matter, however, we can see that cobalt is required for electric vehicles. Where does that come from? It comes from the Democratic Republic of the Congo where children aged seven, eight or nine years old are down mines all hours of the day. Is that where we are going to be buying cobalt from? We are going to crucify our farmers on the back of a green dream that is totally unreal and does not face up to the reality with which human beings are dealing. In this case, I am referring in particular to farmers and farming communities. I ask everyone to please wake up.
I thank all of the Senators for their contributions on the Mercosur trade agreement. The debate here follows on from our discussions in the Dáil this morning. I understand there will be an opportunity for further debate in the Dáil next week. It is only right and proper that we have this debate. It is important that everybody is given the opportunity to fully discuss this trade deal.I have carefully listened to the concerns raised, particularly regarding the impact the deal will have on beef farmers. I come from a farming community so I fully appreciate and understand the genuine concerns that have been expressed by farmers. I have acknowledged that the agreement does not deliver all that the Government may have wanted.
I assure Senators that the Government fought hard to achieve the best deal. I availed of every single opportunity at EU level to raise our concerns, especially in respect of the beef sector. Senators have no need to doubt that I availed of every chance to mention our concerns. I will continue to work to ensure that the concerns raised by farmers are addressed. Other member states had similar concerns to Ireland about the beef sector. In the period ahead we need to consider ways to work with those parties to see if we can diminish the impact on the agricultural sector. I assure Senators that the Minister for Agriculture, Food and the Marine and I will explore all avenues in this regard. There is still a long way to go with this deal and we should not lose sight of the fact that Brexit is a much greater and more immediate challenge facing our agricultural sector.
Naturally, the focus of many Senators is on agriculture but it is important that we recognise the benefits that Ireland will accrue from the deal. There will be opportunities for our SMEs in particular with the opening up of the public procurement sector in Mercosur. This deal will also benefit the dairy industry, business services, the chemical sector and the drinks industry as tariffs are significantly reduced and barriers to trade are lessened.
Ireland exports €2 billion worth of goods, services and trade and the EU-Mercosur agreement should allow us to grow exports further and faster. The deal was only agreed in principle on Friday last and it must go through a number of different stages before it comes into force. It will take up to two years for the agreement to go through a legal scrubbing process. I recall that the EU-Canada Comprehensive Economic and Trade Agreement, CETA, is a comprehensive document of more than 2,500 pages with 500 pages of legal text and detailed text on each tariff line included as part of the deal. That shows that the final agreement will take a considerable time to be completed. In the meantime we will continue to assess the impact of the deal as more detailed information comes to hand.
Regadring the climate impact, the agreement includes a detailed chapter on sustainable development goals, SDGs. It recognises the need to address the urgent threat of climate change and the role that trade has played as well as underscoring the importance of both parties implementing the provisions of the Paris Agreement. The Paris Agreement includes, for example, a pledge by Brazil to reduce, by 2025, its net greenhouse gas emissions by 37% compared with the 2005 levels, a pledge to stop illegal deforestation in the Brazilian Amazon basin by 2030 and to reforest 12 million ha, and a pledge by the EU to reduce its domestic emissions by at least 40% by 2030. There is also a role for NGOs in the oversight of adherence to the deal.
The issue of geographic indicators was raised. We can only protect geographic indicators that exist. We have two protected products on the list - Irish whiskey and Irish cream liqueur. I do not have the full list of 300 products to hand but there is one available and they have all been decided. Products are protected, particularly products that come from certain areas.
The ratification process has been raised. As far as Mercusor is concerned, we understand from the Commission that it will be an association agreement. That means that for the full agreement to come into effect, individual member state ratification procedures are likely to be necessary, including approval by the Oireachtas. We will only be sure of that when we see the text. I am taking it that Oireachtas approval will be legally necessary. I cannot give a commitment on that until we see the text but I hope that will be the case.
My Department, in conjunction with the Department of Agriculture, Food and the Marine, will work to ensure that a detailed, independent economic assessment is carried out to examine the full impact of the agreement on our economy as a whole, including the environmental impact and specifically the impact on the beef sector and the challenges it faces regarding Brexit. We have the time and space to do so. I believe that this is the sensible thing to do before determining the Government's position on the deal. We have time to conduct a detailed examination of the deal and carry out any necessary assessments.
I thank the Senators for their time and their contributions.