Brazil and Canada are ready to revive stalled talks on an “action plan” to free up trade between Ottawa and the Mercosur trade bloc, said Brazil’s foreign trade secretary, Tatiana Prazeres.
The current exchanges are a “constructive dialogue,” Prazeres explained, adding that Canadian officials are scheduled to visit Brazil at the end of August.
In a written response to a Reuters query, she said the visit is part of ongoing preliminary discussions around re-engaging on the trade file.
Canadian International Trade Minister Maninder Sidhu would visit Brasilia on August 25, diplomatic sources in both countries told Reuters.
Prazeres said that his mission should be a chance to test the waters for the possible resumption of formal negotiations.
Canada’s renewed interest
Last month, Ottawa expressed renewed interest in the Mercosur accord, as part of a larger push to diversify its trading portfolio outside the United States.
That drive comes amid ongoing uncertainty about tariffs imposed by former US President Donald Trump, which disrupted traditional trade patterns.
Mercosur, which includes Brazil, Argentina, Uruguay, and Paraguay, with Bolivia on its way to becoming a full member, is a major global exporter of cattle, soybeans, and minerals.
Brazil, the bloc’s largest economy, is often regarded as the primary driving force behind any agreement with Canada.
Stalled talks since 2021
Formal negotiations for a Mercosur-Canada free trade agreement have been stalled since 2021. The talks were first hampered as South American countries focused on domestic political cycles, including elections.
Later, alterations in US trade policy under Trump compelled both Canada and Mercosur members to reconsider their trading strategy.
Prazeres highlighted that, while no formal date has been set for resuming negotiations, the August visit could help clarify the road forward. “Mercosur is willing to evaluate the next steps,” she told reporters.
Any official relaunch, including the establishment of a discussion calendar, would still necessitate internal cooperation inside the union.
Timeline and outlook
Formal discussions could restart by late September or early October, two senior diplomatic sources told Reuters.
The source, who is monitoring the talks, said both sides considered the Mercosur-Canada agreement to have few, if any, major sticking points, and estimated the process might take a year to complete once it was back on track.
The scope for expansion is apparent in the bilateral trade statistics. Brazil had a $3.5-billion surplus last year, while trade between Canada and Brazil amounted to $9.1 billion.
Compared with Canada’s gargantuan $727 billion in trade with the United States, this underlines both the relative smallness and potential expansiveness of the Brazil–Canada relationship.
Internal coordination within Mercosur
Prazeres stated that any decision to move further would be based on Mercosur consensus. Before formal negotiations may resume, each member state must agree on the scope of the agreement and its goals.
Uruguay’s Foreign Ministry confirmed to Reuters that “no new steps” had been taken in Mercosur-Canada talks, but emphasised that the accord is still on the bloc’s agenda.
This shows that, while political will exists, procedural agreement among members will be critical to moving the process forward.
Strategic significance
Brazil sees the restart of Mercosur-Canada discussions as an opportunity to develop economic ties with countries other than its usual allies and further integrate into global supply chains.
A deal with Mercosur would support Canada’s objective of lessening reliance on US markets while gaining access to South America’s agricultural and mineral resources.
While hurdles remain, both sides appear eager to investigate the possible benefits of a deal.
The coming weeks, particularly Sidhu’s visit in late August, will likely determine if the political momentum can be translated into a concrete timeframe for resuming negotiations.
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