Quick overview

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The combination of Javier Milei’s economic opening in Argentina, Brazil’s evolving trade strategy, and a more fragmented geopolitical landscape has helped drive a shift in Mercosur’s external agenda, marking a notable acceleration in its integration with global markets.

Recent progress in trade negotiations—including the long-awaited Free Trade Agreement (FTA) with the European Union—highlights a qualitative change within the South American bloc, which for decades moved slowly on external trade liberalization. Today, the picture looks markedly different: Mercosur could sign up to three FTAs in a single year, an unprecedented pace in its history.

Alongside the EU agreement, the bloc has already signed a trade deal with the European Free Trade Association (EFTA)—comprising Switzerland, Norway, Liechtenstein, and Iceland—in September 2025. That agreement is now undergoing ratification. In parallel, there is growing momentum toward a potential FTA with Canada, which could be finalized in 2026, according to officials from Canada, Argentina, and Brazil cited by Reuters.

Mercosur is also advancing negotiations with a broader set of partners, including Singapore, Japan, Indonesia, South Korea, the United Arab Emirates, Vietnam, and El Salvador, signaling a much more diversified external trade strategy.

This represents an unprecedented negotiating pace for the bloc. By comparison, Mercosur’s last completed FTAs were with Egypt in 2010 and Israel in 2007.

What changed?

The shift in Mercosur’s external strategy did not begin recently, but rather reflects a decade-long evolution. Around 2016, member states agreed to what was described as an “updating” of the bloc’s external agenda, as global trade negotiations were reshaping major frameworks such as the CPTPP and the RCEP.

In that context, Mercosur began reviewing existing agreements and exploring new trade partnerships. However, progress was initially slow due to structural constraints: the bloc has traditionally maintained strong protection of sensitive domestic sectors while simultaneously pushing offensive interests in agriculture—often the most sensitive area for its negotiating partners—making agreements difficult to conclude.

The situation began to shift after the pandemic and amid changes in U.S. trade policy. Key partners such as the European Union and Canada became more flexible in their negotiating positions, placing greater emphasis on concluding long-delayed deals, including with Mercosur.

The potential of new agreements

Looking ahead, analysts highlight the Canada FTA as one of the most significant potential agreements, given the high degree of economic complementarity between both regions. It could also open the door to joint investment projects, particularly in mining and natural resources.

Expansion into Asia is also seen as a strategic priority. A future agreement with Japan, for example, would be particularly relevant, although historically it has faced resistance—especially from Argentina—due to concerns over the automotive industry and domestic protectionism.