Mercosur summit in Paraguay launches Japan talks, seeks China deal

At the 68th Mercosur leaders’ summit in Assunção, Paraguay, Brazil’s President Luiz Inácio Lula da Silva announced that the bloc will open formal trade negotiations with Japan and pushed for a new commercial agreement with China, adding that Mercosur is also advancing talks with Canada, India and Vietnam.

Brazil pledged an additional US$ 100 million per year to the Structural Convergence Fund (FOCEM) and presented a revised desabastecimento mechanism that doubles the duration of temporary zero‑tariff authorisations from 12 to 24 months and introduces electronic processing to cut bureaucracy. A parallel decision approved mutual recognition of digital identities, allowing citizens to use their national e‑government credentials across member states.

Paraguayan President Santiago Peña criticised the recently signed Mercosur‑EU free‑trade agreement, saying the allocation of export quotas was unfair to smaller economies. Uruguay’s new pro‑tempore presidency was handed over, with its leader Yamandú Orsi pledging to prioritize the implementation of existing trade accords. The summit also highlighted internal tensions, notably the absence of Argentine President Javier Milei and disputes over quota distribution, while reaffirming the bloc’s commitment to deeper regional integration.