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Dairy Trade Update

The EU has successfully finalised its Economic Partnership Agreement with Japan, hailed by EU Farm Commissioner, Phil Hogan, as “the most significant and far reaching deal ever concluded by the EU in agri-food trade.”

While a political agreement had been reached in early July, the final technical and legal details have now been completed, it was announced on December 8. The deal, which took four years to agree, cuts tariffs on hard cheeses such as gouda and cheddar, reduces tariffs by 70% for SMP, butter and whey powder, establishes a new duty free quota of 31,000 tonnes for fresh cheese such as mozzarella and introduces co-operation on standards and regulations. It will now need to be approved by both the European Parliament and EU member states, with the aim for it to enter into force in October 2019. Minister of Agriculture, Michael Creed, is helping to facilitate Irish food businesses take advantage of new market opportunities in the region, as the Minister led a trade mission to both Japan and South Korea earlier in November.

This week both Commissioner Hogan and Commissioner for Trade, Cecilia Malmström are attending the 11th World Trade Organisation Ministerial Conference in Buenos Aires, where the most interesting talks will be held on the side-lines, as the EU hopes to reach a political agreement in its trade talks with Mercosur. While there are grave concerns for the beef sector within the agreement, the prospects for dairy are also not looking positive at the moment. While Argentina and Uruguay are both major dairy exporters, Brazil is a major importer, with particular opportunities for cheese and infant milk formula.  In terms of EU market assess, the Commission has offered a TRQ for 20,000t of cheese exports (free of any customs duty as of year five), 15,000t of milk powder and 5,000t of butter with high duties on the latter two €251/t and €142/t, however the expected “generous” market access proposal from Mercosur countries on dairy has not yet come.

Irish dairy co-ops were represented during a high level industry trade mission led by Commissioner Hogan to Iran and Saudi Arabia from 7-13 November, within the framework of the EU’s agri-food promotion policy. Saudi Arabia and Iran are the two largest economies in the Middle East, with populations of 33 million and 80 million people respectively. Both countries are key target markets for Irish dairy (specifically for infant formula, casein and butter) and are set to grow in future. During the trade mission, the EU and Iran committed to speed up authorisations in the SPS field and discuss harmonised import requirements for exports from the EU. Officials in Brussels and Tehran will now set up regular expert meetings on trade and investment in the agri food sector – the first one is tentatively scheduled for the first quarter of 2018.

Alison Graham

European Affairs Executive