BRUSSELS, (Reuters) – European farmers could lose more than 3 billion euros in annual revenue by 2020 under any free trade deal between the European Union and Latin America’s Mercosur region, a study for the EU’s executive showed.
The deepest losses would be felt by beef producers in Ireland, Britain and France, hit by a predicted 200,000-tonne annual increase in beef imports from Argentina, Brazil, Paraguay and Uruguay, the study for the European Commission showed.
Last year, the European Union and Mercosur relaunched 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 euro ($124.6 billion) in 2010. Negotiators remain hopeful of reaching an agreement later this year. Any deal is likely to see Europe open its markets to South American agricultural imports in return for greater access to Mercosur’s markets for services and goods such as cars.
But the talks face strong opposition from 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’s scientific research centre, the JRC, and was presented to EU government trade officials in Brussels on Thursday. It remains private but Reuters has seen a copy.
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 tonnes a year, with producer prices for the meat falling by nearly 8 percent, the study said.
Ireland would see its annual farm revenues fall by more than 4 percent 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 percent respectively, the study showed.
EU cereals exports to the four Mercosur countries would increase by about 1 million tonnes a year by 2020, while the deal would have little impact on EU sugar production or prices, the authors said.
The 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.
