Background and Relevance
Mercosur, a South American trade bloc comprising Argentina, Brazil, Paraguay, Uruguay, and Bolivia, along with Canada, are set to restart negotiations for a free trade agreement. This development comes as the United States imposes tariffs on Brazilian goods, prompting Mercosur countries to seek new economic partnerships.
Who are the key players?
Brazil, being Mercosur’s largest member, has announced the resumption of negotiations. Canada, with its shared commitment to open, fair, and sustainable trade, is also a crucial partner in these discussions.
Current State of Negotiations
The negotiations for a free trade agreement between Mercosur and Canada had stalled following the seventh round of talks in August 2019.
Trigger for Resuming Negotiations
The United States imposed a 50% tariff on Brazilian products on August 6, despite the U.S. having a trade surplus with Brazil. This move has motivated Mercosur countries, particularly Brazil, to explore new trade opportunities.
Joint Commitment to Trade
Brazil and Canada have emphasized their historical commitment to open, fair, and sustainable trade. They aim to promote bilateral prosperity, regional growth, and global trade system development through these negotiations.
Upcoming Meetings
Delegations from both countries will meet in Toronto in September to explore new bilateral trade and investment opportunities, as stated in a joint announcement.
Impact of U.S. Tariffs on Brazil
The recent tariffs imposed by the United States on Brazilian goods are partly influenced by the ongoing legal case against former Brazilian president Jair Bolsonaro, who is facing a “witch hunt” from the Brazilian Supreme Court, according to U.S. President Donald Trump.
Key Questions and Answers
- What is the purpose of the resumed negotiations? The resumption of trade talks signifies a shared commitment to deepen mutually beneficial economic ties and open new relevant opportunities for both Mercosur and Canada.
- Which countries are part of Mercosur? Mercosur consists of Argentina, Brazil, Paraguay, Uruguay, and Bolivia.
- Why are Mercosur countries seeking new trade partners? The United States’ imposition of tariffs on Brazilian goods has prompted Mercosur countries, especially Brazil, to explore new economic partnerships.
- What is the historical trade relationship between Brazil and Canada? Brazil and Canada share a historical commitment to open, fair, and sustainable trade, aiming to foster bilateral prosperity, regional growth, and global trade system development.
- What are the upcoming meetings between Brazil and Canada about? The delegations from Brazil and Canada will meet in Toronto in September to explore new bilateral trade and investment opportunities.
- How have U.S. tariffs affected Brazil? The recent tariffs imposed by the United States on Brazilian goods are partly influenced by the ongoing legal case against former Brazilian president Jair Bolsonaro.
