Valor | 19 June 2026
Mercosur-Canada trade deal nears finish despite hurdles
By Sofia Aguiar and Giordanna Neves
The Lula administration believes free-trade negotiations between Mercosur and Canada have entered their final stage, but acknowledges that disagreements remain over sensitive issues, particularly market access for meat products. Despite the outstanding issues, Brazil expects to conclude the negotiations within the next six months and is pushing to include a review clause that would allow the agreement to be revisited within a relatively short period.
Brazilian officials believe one technical meeting and another at the ministerial level will still be needed to resolve the remaining sticking points. Those discussions are expected to focus on market access for meat, dairy products, poultry, and eggs, which remain the main obstacles to a final agreement.
One of Canada’s chief concerns is the competitiveness of meat exports from Mercosur, particularly those from Brazil, Argentina, and Uruguay. An additional complication arose after legislative changes approved in June last year barred Canada from offering tariff-rate quotas or tariff reductions for products such as poultry, dairy, and eggs. Those products are of major importance to Mercosur countries, requiring negotiated solutions between the parties.
A source familiar with the talks told Valor that the restriction will require both sides to find mechanisms to offset the limitation through concessions in other areas that are considered more advantageous for Mercosur.
On the Mercosur side, sensitive issues involve industrial sectors such as automobiles and auto parts. In those cases, the bloc’s priority is to secure longer adjustment periods for domestic manufacturers, allowing for a gradual opening of the market or the establishment of quotas.
Negotiators are also discussing the treatment of geographical indications, certifications that identify products and services as originating from a specific location.
Canada’s trade agreement model follows the framework established under the North American Free Trade Agreement (NAFTA). Mercosur, meanwhile, has begun incorporating similar provisions into more recent trade agreements, including its deal with the European Union, meaning the two sides will need to reconcile their approaches.
Even so, Mercosur’s strategy is to produce a text that is technically acceptable to both sides. Despite unresolved issues, Brazilian officials say about 12 chapters have already been finalized, with less than 30% of the agreement still left to negotiate.
The goal of wrapping up the talks in the near term is to capitalize on what Mercosur officials describe as a favorable “political alignment” between the South American bloc and Canada. That alignment has been reinforced by the sweeping tariffs imposed by U.S. President Donald Trump on a range of countries, including Brazil and Canada. The countries involved believe the tariffs have created a window of opportunity to diversify export markets and strengthen partnerships with other international players.
Against that backdrop, negotiations with Canada are moving at a much faster pace than the Mercosur-European Union agreement, which took 26 years to conclude. To prevent sensitive issues from becoming permanent obstacles, Brazil has proposed including a review clause with a relatively short timeline, allowing the treaty to be updated and adjusted as it is implemented. The expectation is that any further liberalization could be addressed in future reviews without diminishing the ambition of the current negotiations.
Beyond Canada, Mercosur is also working to finalize a trade agreement with the United Arab Emirates this year. The bloc also plans to launch negotiations with Vietnam and Japan and intensify talks with India, although there is still no timetable for concluding those negotiations. A potential agreement with South Korea is also under consideration.
