The South American trade bloc Mercosur is launching negotiations on an economic partnership with Japan, following its recent agreement with the European Union, both sides announced on Tuesday at the Mercosur summit in Asunción, the capital of Paraguay.
"With this agreement, the parties aim to expand market access for agricultural and non-agricultural products, strengthen cooperation and mutual investment, and integrate the value chains of both economies," a joint statement by Argentina, Brazil, Paraguay, Uruguay and the Japanese government said.
Free trade zone of around 400 million people
The economic partnership agreement is intended to create a free trade zone of around 400 million people with a combined economic output of around $7 trillion. Current trade volume stands at around $13.7 billion.
The EU and the Mercosur states of Brazil, Argentina, Uruguay and Paraguay have formed a vast free trade zone since early May. Bolivia has been a formal Mercosur member since 2024 but is still in the process of implementing Mercosur rules.
The agreement is intended to boost the exchange of goods and services through the gradual reduction of trade barriers and tariffs.
German Foreign Minister Johann Wadephul is attending the Mercosur summit in Paraguay on Tuesday at the start of a multi-day tour of South America. Germany sees major opportunities for the automotive industry, mechanical engineering and the pharmaceutical sector.
