Ireland’s beef industry may need quota protection within TTIP deal, says Irish government

By Poorna Rodrigo

- Last updated on GMT

There is hope that Irish beef can get a foothold in higher-value niche US beef outlets
There is hope that Irish beef can get a foothold in higher-value niche US beef outlets

Related tags Irish beef European union Beef

The Irish government has predicted to GlobalMeatNews that American beef exports to the European Union (EU) will be limited by quotas in future, even if the EU and USA successfully negotiate a Transatlantic Trade & Investment Partnership (TTIP) deal.

An official for Ireland’s department of jobs, enterprise and innovation explained: "The position of beef as a sensitive sector for Ireland is well known by the government and the EU Commission. For this reason we expect that full market liberalisation will not apply to the beef sector and that the sector will instead be the subject of quotas."

Fresh concerns about full-blown trans-Atlantic trade liberalisation emerged after an Irish government-commissioned Copenhagen Economics report warned Ireland’s beef sector stood to lose between €25 million and €50m a year from increased American competition should a deal go ahead. That said, it stressed Ireland’s overall economy could benefit – with an additional €270m-worth of agricultural exports annually, under a TTIP trade regime.

However, the Irish beef industry is adamant that its interests must be respected: "While the TTIP offers opportunities for Ireland overall, the Irish Farmers’ Association [IFA] is clear that the interests of European and Irish agriculture must not be sacrificed by EU negotiators in pursuit of an overall trade deal,"​ said IFA president Eddie Downey. Almost 99% of Irish beef exports are sold in the EU and a reduction in EU prices following an influx of American imports could be devastating.

"Ultimately, the question is whether US beef imports into the EU will displace Irish beef exports or force Irish prices down, and whether there is any upside in terms of getting Irish beef onto US markets,"​ said the general secretary of the Irish Cattle and Sheep Farmers’ Association (ICSA) Eddie Punch. It boils down to the euro to [US] dollar exchange rate and US beef supplies: "At the moment, both are remarkably favourable to Irish exports,"​ Punch explained.

"It is remarkable that US beef farmers are getting some 30% more for their steers at the moment than Irish farmers with the price at over €5.20/kg carcase this week compared with just over €4/kg for the Irish equivalent.While it is clear that, historically, low supplies of US cattle are driving a boom in the US beef price, the significant fall in the value of the euro against the dollar to date in 2015 is amplifying the difference,"​ he said, adding: "If we could assume that this situation will persist into the long term, then perhaps there would be grounds for optimism." 

Unfortunately, reports suggest otherwise: "US cattle farmers are rebuilding herds, meaning that their price is near a peak and will fall in the next 18-24 months as numbers come out."​ Moreover, the chances are that the European Central Bank quantitative easing (QE) programme, alongside the phasing out of QE in the US means continued weakness for the euro, Punch said. "And beyond two years, one might doubt that the euro will remain so weak."​ Historically, US beef production is more competitive due to hormones, less regulation and scale, Punch said, adding: "When currency and supplies revert to a more typical long-term average, Irish beef farmers are concerned."

Moreover, Ireland has a carbon-efficient model of food production and the deal should not replace the "carbon efficient Irish produce on the EU market with carbon-intensive US imports"​, Downey added. EU negotiators must "insist on equivalence of standards"​ – and all US imports must meet the same animal health, welfare, traceability and environmental standards as are required of EU producers, he argued.

Yet, there is hope that Irish beef can get a foothold in higher-value niche US beef outlets, especially restaurants, Punch said. "The Irish brand is potentially in a strong position in the USA, thanks to St Patrick and Irish American diaspora and there is potential to build a premium, natural-based image, linked to Irish grassland production systems,"​ Punch stressed. But a lot needs to be done in "getting agreement with US regulatory authorities and determining exactly what claims can be made about grass-fed beef,"​ he added.

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