The United Kingdom and several South American nations are preparing to launch trade talks as rising tariffs disrupt global commerce and push countries to diversify their economic partnerships.
Brazilian Foreign Minister Mauro Vieira and his British counterpart Yvette Cooper discussed starting formal negotiations between the UK and the trade bloc Mercosur in a meeting Tuesday, according to officials from both countries who asked not to be identified talking about a private conversation.
Brazil will now discuss next steps with partners Argentina, Uruguay, Paraguay and Bolivia, and a first working meeting could take place as soon as next year, one of the officials said.
UK Trade Minister Chris Bryant is keen to reach a trade pact with Mercosur: His first international trip after being appointed to the role was to Argentina and Brazil in September, where he discussed the opportunity to reduce trade barriers with those countries. Later that month, he said becoming a Mercosur partner was a “no brainer.”
The UK-Mercosur rapprochement is part of a broader trend of nations seeking new partners as US President Donald Trump’s tariff policies upend global commerce and reshaping global trade ties, while China restricts access to key products including critical minerals.
Brazil leader Luiz Inácio Lula da Silva, who currently holds Mercosur’s rotating presidency, has pushed to expand its trade partnerships, and the bloc is aiming to finalise a long-awaited deal with the European Union before the end of this year. It is also seeking to conclude an agreement with the United Arab Emirates, and has restarted talks with Canada.
Total trade with Brazil, the largest Mercosur economy, grew 11 percent over the 12-month span that ended in June, according to UK data. Its total commerce with Argentina posted similar growth. Brazil ranked as the UK’s 26th-largest trade partner during that span, and Argentina as its 67th-largest.
By comparison, trade between the EU and Mercosur topped 111 billion euros (US$129 billion) in 2024, according to EU data. But the potential conclusion of that much larger deal after more than two decades of negotiations is driving interest in the South American nations among other countries, while also freeing it up to seek new agreements, said Tatiana Prazeres, Brazil’s secretary of foreign trade.
“Mercosur is experiencing a historic moment of expansion in its network of trade agreements,” Prazeres said in a Wednesday interview in Brasilia. “This is related not only to the fact that we are wrapping up negotiations with the EU, but also to a more challenging global context, in which countries seek partners committed to rules-based trade, who want to promote commerce, legal safeguards and stability.”
The trade bloc recently approved negotiating mandates with Vietnam and Indonesia, which would allow them to start trade talks soon, Prazeres said.
She also travelled to India last month to prepare the groundwork for an expansion of an existing trade deal between the South Asian country and Mercosur. Lula and Narendra Modi both called for such an expansion during the Indian prime minister’s state visit to Brazil in July.
“India has the potential to join the top shelf of Brazilian trade partners,” Prazeres said. “It’s not a political assessment, but one of growth potential and trade flows with a country that is the most populous in the world, growing at a rapid pace, and therefore creating opportunities that are still largely unknown in Brazil.”
by Augusta Saraiva, Beatriz Reis & Lucy White, Bloomberg
