EU Deal and Trump Tariff Threats Accelerate Mercosur Trade Negotiations
Source: DairyNews.today
Brazil is positioning the South American trade bloc Mercosur to accelerate free trade agreements following its recent deal with the European Union. With the looming threat of tariffs under U.S. President-elect Donald Trump, countries are seeking to diversify their export markets, according to diplomats familiar with the matter, speaking on condition of anonymity.
Diplomats indicate that among Mercosur’s most promising trade negotiations in the coming year are deals with the European Free Trade Association (EFTA), comprising four non-EU countries, and the United Arab Emirates (UAE).
In addition, Singapore has completed an agreement with Mercosur this year, which is now in the translation phase and will soon be sent to the country’s president and lawmakers for ratification, a diplomat revealed.
"This is undoubtedly a good time for Mercosur to advance other negotiations. Several countries have already approached us expressing interest in expanding talks," a Brazilian official told Reuters.
If these agreements materialize, they would mark a significant revival for Mercosur, which has historically faced internal divisions and questions about its effectiveness. The bloc includes South America’s largest economies, Brazil and Argentina, as well as Uruguay and Paraguay, with Bolivia joining this year.
Norway, a member of the EFTA group, has expressed interest in finalizing a deal with Mercosur in the first half of 2025. "A Free Trade Agreement between Mercosur and the EFTA states is a high priority for Norway. We aim to conclude negotiations as soon as possible," said Norwegian Minister of Trade and Industry, Cecilie Myrseth, in a statement to Reuters.
"With the EU-Mercosur deal now concluded, we expect EFTA and Mercosur to resolve the few remaining issues quickly," she added.
For its part, the UAE aims to deepen trade ties with Mercosur within the next year. UAE Trade Minister Thani Al Zeyoudi said in a statement to Reuters that an agreement would open up opportunities for businesses across both the Middle East and Latin America.
Impact of Trump Tariffs
The prospect of new tariffs under President-elect Trump, set to take office in January, is prompting major U.S. trade partners to reassess their options. While countries like Mexico remain focused on defending the US-Mexico-Canada Agreement (USMCA), they are also exploring alternatives, including expanding trade relations with Mercosur, according to two Mexican government sources.
"In an increasingly fragmented world with growing protectionism, President Claudia Sheinbaum is pursuing a more integrated Mexico to better navigate these challenges," one source said. "This means diversifying investment, trade, and diplomatic relations."
The Mexican presidency and Economy Ministry did not immediately respond to requests for comment.
A Mercosur official confirmed that discussions are also underway for a potential trade deal with Canada. However, a Canadian diplomat noted that Canada's focus on USMCA negotiations could delay any new talks with Mercosur.
"Our negotiators will be fully occupied with Trump-related matters, leaving little bandwidth for Mercosur discussions," the Canadian diplomat said. Canada's Global Affairs Ministry confirmed that the last round of talks with Mercosur took place in 2019, and no additional rounds are currently planned.
Mercosur is also engaged in talks with South Korea, Vietnam, Indonesia, and Lebanon, according to Brazil’s Foreign Ministry. Embassies in Brasilia for these countries did not respond to requests for comment.
"There are other trade partners we are interested in, especially in Asia," added another Brazilian official.
Despite some resistance from agricultural lobbies in other countries wary of competing with Brazil and Argentina’s dominant agricultural sectors, progress is being made in Mercosur’s trade negotiations as countries seek to diversify their export markets.
In addition, Singapore has completed an agreement with Mercosur this year, which is now in the translation phase and will soon be sent to the country’s president and lawmakers for ratification, a diplomat revealed.
"This is undoubtedly a good time for Mercosur to advance other negotiations. Several countries have already approached us expressing interest in expanding talks," a Brazilian official told Reuters.
If these agreements materialize, they would mark a significant revival for Mercosur, which has historically faced internal divisions and questions about its effectiveness. The bloc includes South America’s largest economies, Brazil and Argentina, as well as Uruguay and Paraguay, with Bolivia joining this year.
Norway, a member of the EFTA group, has expressed interest in finalizing a deal with Mercosur in the first half of 2025. "A Free Trade Agreement between Mercosur and the EFTA states is a high priority for Norway. We aim to conclude negotiations as soon as possible," said Norwegian Minister of Trade and Industry, Cecilie Myrseth, in a statement to Reuters.
"With the EU-Mercosur deal now concluded, we expect EFTA and Mercosur to resolve the few remaining issues quickly," she added.
For its part, the UAE aims to deepen trade ties with Mercosur within the next year. UAE Trade Minister Thani Al Zeyoudi said in a statement to Reuters that an agreement would open up opportunities for businesses across both the Middle East and Latin America.
Impact of Trump Tariffs
The prospect of new tariffs under President-elect Trump, set to take office in January, is prompting major U.S. trade partners to reassess their options. While countries like Mexico remain focused on defending the US-Mexico-Canada Agreement (USMCA), they are also exploring alternatives, including expanding trade relations with Mercosur, according to two Mexican government sources.
"In an increasingly fragmented world with growing protectionism, President Claudia Sheinbaum is pursuing a more integrated Mexico to better navigate these challenges," one source said. "This means diversifying investment, trade, and diplomatic relations."
The Mexican presidency and Economy Ministry did not immediately respond to requests for comment.
A Mercosur official confirmed that discussions are also underway for a potential trade deal with Canada. However, a Canadian diplomat noted that Canada's focus on USMCA negotiations could delay any new talks with Mercosur.
"Our negotiators will be fully occupied with Trump-related matters, leaving little bandwidth for Mercosur discussions," the Canadian diplomat said. Canada's Global Affairs Ministry confirmed that the last round of talks with Mercosur took place in 2019, and no additional rounds are currently planned.
Mercosur is also engaged in talks with South Korea, Vietnam, Indonesia, and Lebanon, according to Brazil’s Foreign Ministry. Embassies in Brasilia for these countries did not respond to requests for comment.
"There are other trade partners we are interested in, especially in Asia," added another Brazilian official.
Despite some resistance from agricultural lobbies in other countries wary of competing with Brazil and Argentina’s dominant agricultural sectors, progress is being made in Mercosur’s trade negotiations as countries seek to diversify their export markets.
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