BRASILIA/MONTEVIDEO, Feb 6 (Reuters) – Brazil is considering for the first time promoting a partial trade deal between Mercosur and China, senior Brazilian government officials said, which would be a major change for Latin America’s largest economy.
Brazil has long vetoed formal negotiations with Beijing to protect national manufacturers from increased Chinese imports. But as Beijing seeks deeper trade ties and the United States imposes waves of tariffs, President Luiz Inácio Lula da Silva’s government is now reconsidering that stance.
A joint statement issued during Uruguayan President Yamandu Orsi’s visit to Beijing to meet with Chinese President Xi Jinping this week said both presidents hoped free trade negotiations between China and Mercosur could begin ‘as soon as possible’.
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Mercosur includes Brazil, Argentina, Paraguay and Uruguay, with Bolivia set to become a full member.
While a formal, comprehensive trade pact is still some way off, two Brazilian government officials said a partial deal between Mercosur and China is now seen as a plausible long-term outcome, driven by U.S.-imposed tariffs on products from trading partners, which have disrupted global trade and reshaped trade alliances.
China’s foreign and commerce ministries did not immediately respond to a request for comment.
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Brazil’s change in stance reflects what one of the officials, who asked not to be identified due to the sensitivity of the negotiations, called a ‘new global scenario’.
“We have to diversify our partners,” the official said. ‘China has the advantage that we can work with a partial agreement, just on some tariff lines,’ he added.
Another Brazilian official directly involved in Mercosur’s internal negotiations said the bloc could move forward on non-tariff barriers, such as import quotas, customs procedures and health and safety regulations, which in itself would create significant openings in the Chinese market.
The official said it was too early to specify which business sectors could be discussed, describing the issue as ‘highly complex’.
‘NEW DYNAMICS IN THE REGION’
Brazil has been cautious about a broader pact, fearing that China’s vast industrial production could overwhelm domestic manufacturers.
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However, Chinese investments in Brazilian production have grown in recent years — an expansion that Brasília wants to maintain.
U.S. President Donald Trump’s economic policies, which have included pressuring Latin American governments to restrict ties with China, are likely leading Beijing to forge new trade deals in the region, said Ignacio Bartesaghi, a foreign policy expert at the Catholic University of Uruguay.
‘There is a new dynamic in the region when it comes to trade, driven mainly by Trump,’ said Bartesaghi.
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‘Ideas that previously seemed completely paralyzed can now move forward,’ he added.
However, any Mercosur agreement requires the consensus of all its members, which would raise a number of significant challenges.
Paraguay is one of just 12 countries worldwide that maintain formal diplomatic relations with Taiwan, claimed by China, a factor that complicates — though not necessarily rules out — any agreement with Beijing, Brazilian officials said.
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Paraguay imported goods from China worth US$6.12 billion in 2025 and was included in discussions between Mercosur and China, signaling that dialogue remains possible. The president of Paraguay, Santiago Peña, said he is not opposed to a pact between Mercosur and China, as long as Paraguay’s right to maintain diplomatic relations with Taiwan is respected.
‘If there is a bloc today that can negotiate with any country or bloc, that bloc is Mercosur’, said Peña in an interview given in July to Argentine media.
Argentina, Latin America’s third largest economy, could also make consensus difficult. The country has moved closer to Washington under the government of President Javier Milei, who took office in 2023. Milei prioritized strengthening relations with the US, including a US$20 billion currency swap agreement with the US Treasury.
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China remains an important creditor and a major buyer of Argentina’s agricultural exports.
But Buenos Aires may be reluctant to support China-led talks within Mercosur, at least in the short term, experts like Bartesaghi said, especially if such talks could undermine Milei’s efforts to secure U.S. support for economic reforms and financing.
Argentina’s Ministry of Foreign Affairs said it would not comment on ‘hypotheses’ when asked by Reuters about negotiations between Mercosur and China.
“Argentina maintains cordial relations with China — they’re just not very visible,” said Florencia Rubiolo, director of Argentine think tank Insight 21.
Elevating ties through a Mercosur-wide agreement would make that relationship clearer, she said.
‘If these are diplomatic gestures, it seems unlikely that the government will support such a deal,’ he added.
