Mercosur: Safeguards could kick in before 10% price impact
Safeguards for EU agri-food sectors under the EU-Mercosur Trade Agreement could kick in even if the 10% 'threshold' for activating the safeguards is not reached.
That's according to a European Commission official who addressed a question from Irish MEP Barry Cowen in a European Parliament agriculture committee meeting yesterday (Monday, December 1).
The controversial trade deal will allow 99,000t carcass weight of Mercosur beef - mainly from Brazil - to enter the EU at a much reduced tariff rate of 7.5%. The quantity of beef under this quota will be phased in over a five-year period.
Under the proposed safeguard legislation to protect certain sectors from the impact of Mercosur imports, which is being debated by EU lawmakers at present, a price undercut of 10% in sensitive products - including beef - coupled with either a 10% increase in preferential import volumes or a 10% drop in import prices will be treated, as a rule, as sufficient grounds to launch an investigation and potentially take measures to offset the impact.
Barry Cowen has recently raised questions over whether those 10% figures would be rigid or indicative, i.e, if it was possible for safeguard measures to kick in before the 10% threshold was reached.
In response, the European Commission official told Cowen in the parliament agriculture committee meeting yesterday: "The bilateral safeguard clause in the agreement and in this regulation allows the commission to intervene when there is a threat of serious injury.
"So when the serious injury has not materialized yet but there is a threat."
The commission official explained that this can happen either by farmer organisations or member states making a complaint to the European Commission, or by the commission itself deciding to take action.
"The [safeguard] regulation provides that the commission has an obligation to start an investigation when, on the basis of monitoring, it sees that there is something that doesn't work," he said.
The official confirmed: "The thresholds that you seem to be very interested in are actually indicative thresholds. It could well be that in a specific product the threat of injury occurs before the famous 10% is reached, of course it could."
"But what is sure is that when the 10% is reached, then the commission has an obligation to start an investigation, unless there are other indications that prove the contrary."
Reacting to the comments from the commission, Cowen said: "Delighted to receive confirmation from the EU Commission at [the agriculture] committee...that the 10% price and volume fluctuation threshold for safeguard triggers is indicative, not rigid, and that impacts well below 10% can also activate support measures."
