Lula urges Mercosur-Japan deal to counter Trump protectionism

TOKYO: Brazil’s President Luiz Inacio Lula da Silva called Wednesday for a trade deal between South America’s Mercosur bloc and Japan to counter growing US protectionism.

“I am certain that we need to move forward in signing an Economic Partnership Agreement between Japan and Mercosur,” Lula said during a multi-day visit to Tokyo.

“Our countries have more to gain from integration than from protectionist practices,” he said at an economic forum attended by business and political figures from Brazil and Japan.

Mercosur’s four members — Argentina, Brazil, Paraguay and Uruguay — in December struck a free-trade deal with the European Union although it still faces hurdles before final approval.

Business groups in Japan, the world’s fourth-largest economy, have been pressing the government to also strike an agreement with the bloc.

The Keidanren business federation “urgently” called in November for “expedited efforts” towards a Japan-Mercosur Economic Partnership Agreement (EPA), an accord similar to a free trade deal.

“The benefits that a Japan-Mercosur EPA would bring to both parties are immense,” the group said, noting the South American bloc’s population of 300 million people and economic output approaching $3 trillion.

But an agreement may be politically hard because of fears about the impact on Japanese farmers of large-scale agricultural imports, particularly from Brazil and Argentina.

Japanese Prime Minister Shigeru Ishiba said on Wednesday that he and Lula will “strongly push towards more smooth bilateral trade and investment”.

“Business circles of both countries have pushed for early agreement on a Japan-Mercosur EPA. While listening to these voices, we will continue talks towards strengthening bilateral and economic ties,” he said.

Lula, 79, arrived in Japan on Monday accompanied by a 100-strong business delegation.

He and Ishiba were expected to restate their commitment to free trade — in light of US President Donald Trump’s levies on steel and other imports — in a joint statement expected later Wednesday.

“We cannot go back to relying on protectionism. We do not want a second Cold War,” Lula said Wednesday.

“We want free trade so that we can ensure that democracy, economic growth and wealth distribution become established in our countries,” he added.

Lula and Ishiba, 68, were also expected to discuss the joint development of biofuels ahead of November’s COP30 UN climate summit in the Brazilian Amazon.