Brazil says Mercosur UAE trade deal likely by end of 2025
Brazil’s Foreign Minister Mauro Vieira has confirmed that negotiations between the Mercosur trading bloc and the United Arab Emirates are progressing, with the goal of finalizing a trade agreement by the end of 2025. The deal is expected to focus on reducing tariffs, opening markets for services, and boosting investment flows across both regions.
Talks began in 2024 and are now entering a more advanced phase. For Brazil, which currently holds the rotating presidency of Mercosur, reaching the agreement before its leadership ends is seen as a priority. Mercosur, made up of Brazil, Argentina, Paraguay, and Uruguay, with Bolivia on the way to becoming a full member, is one of South America’s most significant trade blocs.
Why this deal matters
One of the biggest impacts of this trade pact would be lower costs for goods traded between Mercosur and the UAE. Reducing tariffs makes products more affordable and competitive, especially in agriculture. South American exports such as beef, soybeans, poultry, and sugar could gain easier access to Gulf markets. For the UAE, which relies heavily on imports to meet domestic demand, this would help strengthen food security.
The agreement is not limited to goods. Negotiations also include services and investment. This could open doors for joint projects in finance, infrastructure, logistics, and technology. For example, UAE investors may look to South America for opportunities in renewable energy or transport networks, while South American businesses could expand into Middle Eastern markets.
There is also a wider geopolitical angle. South American economies are looking to diversify their trade partners at a time when global commerce faces increasing uncertainty. Building stronger ties with the UAE and the wider Gulf region gives Mercosur countries another strategic outlet beyond traditional partners such as the United States, Europe, and China.
Challenges ahead
Finalizing trade agreements of this scale is rarely simple. Negotiators will need to reach consensus on sensitive issues such as rules of origin, technical standards, and how to resolve disputes. Certain industries within Mercosur may resist opening up if they fear unfair competition. At the same time, questions around environmental protections and labour standards are likely to surface during discussions.
Another challenge lies in ratification. Even if negotiators succeed in drafting a comprehensive deal, it must still be approved by each member country of Mercosur. Domestic politics can slow down the process or even block agreements entirely, as past experiences with other trade deals have shown.
What to watch next
Observers will be looking closely at whether the deal proposes immediate tariff cuts on selected goods or a gradual phasing out over several years. The treatment of services, such as banking and transport, will also reveal how much real access companies on both sides will gain. In addition, governments will have to balance the push for open trade with the need to protect local industries and uphold commitments to sustainability.
The bigger picture
If completed, the Mercosur UAE trade agreement would mark a new stage in relations between South America and the Middle East. It would not only support economic growth but also deepen political and cultural ties between regions that, until recently, had relatively limited direct engagement. For Brazil and its Mercosur partners, the pact could serve as proof that the bloc remains relevant in a world of shifting alliances. For the UAE, it would reinforce its position as a global trade hub and a bridge between East and West.
The months ahead will show whether negotiators can overcome the hurdles and deliver a deal on schedule. If successful, the agreement could bring lasting benefits to businesses, farmers, investors, and consumers on both sides.
