EU-South America trade deal

EU and South America agree on a trade deal

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After 20 years of negotiations agreement has finally been reached between the EU and the four-nation group of South American countries known as Mercosur.

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After 20 years of negotiations, agreement has finally been reached between the EU and the four-nation group of South American countries known as Mercosur.

The deal announced last week is hugely significant because of the sheer size of the two trading blocs and the expectation that it will result in the removal of more than 90 per cent of agricultural and industrial tariffs in both directions.

For the EU's part it will provide improved access to South American markets for motor vehicles, telecommunications, transport and financial services.

For South America, the prize is gaining access to the EU for agricultural products including beef.

Considering the staunch reluctance the EU has always shown toward the freeing up of agricultural imports, this is a big concession.

While details of the beef quota arrangements were not immediately made known, it has been reported that Brazil, Argentina, Uruguay and Paraguay will share an allocation of 99,000 tonnes a year at a preferential tariff rate of 7.5pc phased in over five years.

For Australia, which is in the process of negotiating a trade deal with the EU, this might seem encouraging.

It was only a few weeks ago that Australia capitulated to an EC proposal to allocate the major portion of its global 45,000t high-quality grain-fed beef quota specifically to the United States.

It has been reported that Brazil, Argentina, Uruguay and Paraguay will share an allocation of 99,000 tonnes a year at a preferential tariff rate of 7.5pc.

It has been reported that Brazil, Argentina, Uruguay and Paraguay will share an allocation of 99,000 tonnes a year at a preferential tariff rate of 7.5pc.

While this will occur progressively over seven years it nevertheless spells the end of access to a market that Australia (and other countries) has enjoyed since 2009.

It is not known whether Australia was encouraged to think its agreement to the US arrangement might help its own EU trade deal negotiations but some may now be drawing comfort from the Mercosur outcome that a direct EU quota allocation may be a possibility for Australia.

But before getting too carried away, the EU/Mercosur deal still has a long way to go.

First it has to achieve a qualified majority vote in the EU Trade Council and that is thought to be about two years away.

To get through, 55pc of member states representing at least 65pc of the EU population must be in favour.

To block an agreement there must be at least four council members representing over 35pc of the EU population.

Ireland is one EU country which has already said it will vote against the Mercosur agreement if its impact assessment on the Irish economy and jobs is negative.

For South America, the prize is gaining access to the EU for agricultural products including beef. Considering the staunch reluctance the EU has always shown toward the freeing up of agricultural imports, this is a big concession.

Other countries may face similar pressure to resist the deal as there is heavy criticism coming from environmentalists and the farming sector.

EU farmers see the importation of South American beef as a sell-out on EU standards of food safety, animal welfare and traceability while environmentalists see destruction of South American forests for beef production as a major global warming threat.

Water shortage worsens

WITH the winter solstice passed and the coldest part of the year now upon us, the plight of those battling feed and water shortage can only be expected to worsen unless a repeat of the unusual wet and warm winter of 2016 occurs.

Just last week when I caught up with Warragul livestock agent Roger Tweddle, it was zero degrees on his back verandah at 9.15am and prospects for a warm or even mild day did not look encouraging.

Season wise, Gippsland is probably a lot better placed than most.

Before a late break of around 100mm in May it had been pretty ordinary and an area around Sale remains so, but most of the region is now wet enough.

Elsewhere it is a different picture.

In the mountain country around Omeo and down towards Bairnsdale some have been feeding cattle for over 18 months while others have been selling down breeding heifers and cows.

Like Gippsland, the country around Warrnambool is reportedly okay but otherwise the western districts are more generally in green drought.

Roger thought Victoria had not been as badly affected as central/southern NSW but nevertheless there has been a consistent sell down of female cattle occurring in Victoria and getting through winter will remain tough enough in places.

Further to the north, Glen Innes property agent Jim Ritchie reminded me just how difficult the season remains for the New England Tableland region of NSW.

Stretching from Tenterfield near the Queensland border down through Glen Innes, Guyra, Armidale and west to Inverell, it doesn't start to brighten up until you get closer to Tamworth.

Surprisingly even the usually reliable high-rainfall country in the elevated region around Ben Lomond and Maybole is affected.

Jim said feed and water were both problematic and water particularly in country that does not have springs.

Accordingly a lot of people have cut right back on cattle numbers while others who have poured money into feed are in some instances now forced to buy water.

In central Queensland Rockhampton agent Brad Mulvihill said that lack of surface water was really starting to bite.

Parts of the area he works still have a bulk of dry feed but without piped or bore water, it was rapidly losing benefit.

In the area west to Gogango, down to Moura, Biloela and across to Calliope there are a number of people who have had to move cattle or run poly pipe.

One incidence he cited was 5km of poly pipe being laid to a neighbour's irrigation dam to get stock water.

Another was a 1500 head breeder operation which had been in the district since 1969 and never before had to sell females because of drought.

This dry spell has already forced 12 decks of cows to the meatworks.

Despite these difficulties Brad was inclined to think there hadn't yet been a massive drop-off in breeder numbers.

Older cows and heifers that might once have been given a second chance to get in calf are the ones that are being sent to the works and this, in combination with earlier-than-normal weaning, is so far keeping core herds intact.

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