Tatiana Prazeres, Brazil’s secretary of foreign trade, stated that Brazil and Canada were ready to restart the stalled discussions on an “action-plan” for reopening trade between Ottawa, Canada and Mercosur.
Prazeres said that the current exchanges represent a “constructive dialog” and added that Canadian officials will be visiting Brazil by the end of August.
She said in a response written to a Reuters question that the visit was part of the ongoing discussions about reengaging with the trade dossier.
Reuters reported that the Canadian Minister of International Trade, Maninder Sidhu, will visit Brasilia in August.
Prazeres stated that the mission was a test to see if formal negotiations could resume.
Canada renews interest
Ottawa renewed its interest in Mercosur last month as part of an overall push to diversify the trading portfolio it has outside the United States.
This drive is a response to the ongoing uncertainty surrounding tariffs that were imposed by Donald Trump as former US president, disrupting traditional trade patterns.
Mercosur is the world’s largest exporter of minerals, cattle and soybeans. It includes Brazil, Argentina and Uruguay. Bolivia will soon join as a full-member.
Brazil is the largest economy in the group and often seen as being the driving force for any deal with Canada.
Talks stalled since 2021
Since 2021, formal negotiations on a Mercosur Canada free trade agreement are stalled. Talks were initially hampered by the South American countries’ focus on their domestic politics, which included elections.
Canada and Mercosur were forced to change their trade strategy after Trump’s changes in US policy.
Prazeres emphasized that while there has not been a formal date set for the resumption of negotiations, the visit in August could clarify the way forward. She told reporters that “Mercosur was willing to assess the next steps.”
A relaunch of any kind, even if it is just establishing a calendar for discussion, will still require internal co-operation within the union.
Overview and timeline
Two senior diplomats told Reuters that formal discussions may resume by the end of September or beginning of October.
Source who monitors the talks said that both sides believed the Mercosur and Canada agreement had few, if not any major sticking points. They estimated it would take an entire year for the process to be completed once the negotiations were back on track.
Statistics on bilateral trade show the scope of expansion. Brazil’s surplus was $3.5 billion last year. Trade between Canada and Brazil totaled $9.1 Billion.
This highlights both Brazil and Canada’s relative size, as well as their potential for expansion.
Mercosur: Internal coordination
Prazeres said that any further decision would depend on the Mercosur’s consensus. Each member must first agree to the goals and scope of an agreement before formal negotiations can resume.
The Uruguayan Foreign Ministry told Reuters there had been “no progress” in the Mercosur-Canada negotiations, but that it was still on the agenda of the Mercosur bloc.
It is clear that while there may be a political will to move forward, it will require agreement on the procedural aspects amongst members.
Strategic importance
Brazil views the restart of Mercosur and Canada discussions as an excellent opportunity to build economic relations with other countries than its traditional allies, while also integrating further into global supply chain.
Mercosur could help Canada achieve its goal of reducing its reliance on US market while also gaining access South America’s mineral and agricultural resources.
Both sides are eager to explore the benefits that a possible deal could bring.
In the coming weeks, and in particular, Sidhu’s visit at the end of August, it will be determined if political momentum can translate into a specific timeframe to resume negotiations.
As new information becomes available, this post Brazil and Canada revive Mercosur Trade Negotiations may be updated.
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