Japan seeks Mercosur trade pact amid rising resource supply risks
Tokyo wants negotiations with the South American bloc as Trump’s tariffs, China’s rare earth curbs and the Middle East war threaten resource supplies.
- Japan is preparing to negotiate an economic partnership agreement with the South American trade bloc, Mercosur.
- The primary motivation is to diversify its resource supply chains amid risks from U.S. tariffs, Chinese export restrictions, and conflict in the Middle East.
- Japan is interested in Mercosur as a major source of agricultural goods and minerals.
- Despite support from Japanese businesses, there are domestic concerns that a deal could lead to a surge in cheap agricultural imports, such as beef.
Japan is preparing to open negotiations with Mercosur, the South American trade bloc, with the aim of concluding an economic partnership agreement, sources familiar with the plan said on Wednesday (May 27).
Tokyo is seeking to broaden its resource supply channels as pressure builds from US President Donald Trump’s high tariffs, China’s restrictions on rare earth exports and the fallout from the war in the Middle East.
Prime Minister Sanae Takaichi is expected to convey Japan’s wish to begin EPA talks with Mercosur to Brazilian President Luiz Inacio Lula when they meet on the sidelines of the Group of Seven summit in France in mid-June.
Brazil belongs to Mercosur, formally known as the Southern Common Market, together with Argentina, Bolivia, Paraguay and Uruguay.
The bloc is a major exporter of agricultural goods and minerals, and has a combined gross domestic product of about US$3 trillion.
Japanese businesses, particularly the automobile industry, are hoping for an early launch of EPA negotiations with Mercosur.
However, concerns remain in Japan that a pact with the bloc could lead to a surge of cheap agricultural imports, including beef.
Japan has concluded EPAs with Southeast Asian countries, the European Union, Australia and other partners as part of its efforts to promote free trade.
