Brazil seeks to forge a groundbreaking free trade agreement with Mexico. This ambitious plan has garnered support from both industrial and agricultural sectors.
The Brazilian government aims to initiate discussions with Mexico‘s new administration in 2025. The proposal addresses a longstanding demand from Brazilian industries and the agricultural sector.
Mexico recently opened its market to Brazilian agricultural products. This move came after President Andrés Manuel López Obrador implemented a program to combat inflation.
Francisco Cannabrava, Brazil’s Director of Mercosur Affairs, expressed enthusiasm for the potential agreement. He emphasized the importance of timing, noting that the start of a new administration presents an ideal opportunity for negotiations.
The upcoming visit of President Luiz Inácio Lula da Silva to Mexico may pave the way for expanded trade talks. While a direct mention of a free trade agreement is unlikely, the joint communiqué may hint at intentions to boost bilateral trade.
Currently, Brazil and Mexico have two main trade agreements: ACE 53 and ACE 55. ACE 53 covers only 12% of tariff lines, while ACE 55 focuses on the automotive sector.
Brazil-Mexico Trade Relations
The Brazilian government seeks to update and expand these agreements. Cannabrava highlighted that Mercosur has authorized Brazil to pursue bilateral negotiations with Mexico.
In addition, he suggested that the agreement could extend beyond trade to include topics like gender equality and support for small businesses.
If a comprehensive free trade agreement proves challenging, the countries may opt to expand existing agreements. This would address the approximately 50% of products not covered by current arrangements.
Gisela Padovan, Brazil’s Secretary for Latin America and the Caribbean, sees 2025 as a crucial window for negotiations.
This timeline precedes Mexico’s renegotiations of the USMCA agreement with the United States and Canada in 2026. A broad trade agreement with Brazil could strengthen Mexico’s position in future USMCA negotiations.
In short, it would demonstrate Mexico’s efforts to diversify its trade partnerships and reduce dependence on the United States.
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