Mercosur launches economic partnership talks with Japan, eyes China

SAO PAULO: The South American trade bloc Mercosur launched negotiations with Japan on Tuesday for an economic partnership agreement as it seeks to expand trade ties following a recent deal with the European Union.

A deal would create a free trade area of about 400 million people with a combined GDP of US$7 trillion. The push for new trade partnerships comes as U.S. President Donald Trump's sweeping tariffs on goods from trading partners around the globe have driven countries to diversify economic ties.

Mercosur's members - including Argentina, Brazil, Paraguay and Uruguay - announced the talks during a leaders summit in the Paraguayan capital Asuncion, as the host country transferred the bloc's pro tempore presidency to Uruguay.

The bloc had already held two meetings with Japanese officials in January and March, the countries said in a joint statement.

Brazilian President Luiz Inacio Lula da Silva and Japanese Prime Minister Sanae Takaichi discussed the launch of negotiations during a bilateral meeting at the G7 summit earlier in June, noting progress in previous talks between the parties.

"Under this agreement, the two parties will seek to expand access to markets for agricultural and non-agricultural goods, as well as cooperation and mutual investment, by integrating the value chains between their two economies," the statement said.

The bloc signed in January a free-trade deal with the EU after 25 years of negotiations, setting up one of the world's largest free-trade zones. The agreement provisionally entered into force on May 1.

Beyond Japan, Mercosur has ongoing negotiations with Canada for a trade deal, as officials on both sides hope to conclude the talks as soon as September or October.

The bloc aims to soon launch negotiations with China as well, Lula said in a speech at the summit, as it "continues to move closer to the most dynamic markets on the planet."