Brazilian President Luiz Inácio Lula da Silva said on Tuesday (16), during the G7 summit, that Brazil and Japan may formally announce the start of negotiations for a free trade agreement between Mercosur and the Asian country. If confirmed, the announcement is expected on June 30, during the South American bloc’s summit in Asunción, Paraguay.
Lula made the remarks during a bilateral meeting with Japanese Prime Minister Sanae Takaichi. He pointed to the historic ties between the two countries — Brazil has the largest Japanese community outside Japan, while a growing number of Brazilians live in Japan — as a foundation for deepening trade relations.
The signal comes as Japan moves more quickly toward Mercosur. In May, Tokyo announced plans to begin formal talks on an economic partnership agreement with the bloc as early as this summer, driven by the search for alternatives to trade restrictions imposed by Trump and Chinese curbs on rare earth exports.
Mercosur is one of the few major global markets with which Japan still has no trade agreement. In December 2025, the two sides formalized a Strategic Partnership Framework covering trade, investment and the energy transition.
“I hope we can have good news at the next Mercosur meeting,” Lula said.
Brazil’s export basket to Japan is currently highly concentrated in the iron ore sector, which accounted for roughly 80% of shipments between January and April 2026. The chart below shows the other leading commodities:
Top Exports to Japan | Jan-Apr 2026 | WTMT
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Lula’s meeting with Takaichi was expected to include discussions on Brazilian oil sales to Japan, following up on talks held in May between Foreign Minister Mauro Vieira, at least one Petrobras executive and Tokyo’s Minister of Economy, Trade and Industry, Ryosei Akazawa.
It was Lula’s first meeting with Takaichi, who was elected in October last year and became the first woman to serve as Japan’s prime minister.
Source: Folha de São Paulo