Mercosur to sign trade deal with Singapore
The country is Brazil’s second largest trading partner in Asia
Published on 01/12/2023 - 11:43 By Lucas Pordeus León - Brasília
Mercosur is expected to sign an extra-regional agreement with Singapore next week, during the bloc’s 63rd summit, to be held in Rio de Janeiro from December 4 to 7.
“We hadn’t signed an agreement with any other country since 2011—a difficulty in Mercosur’s external negotiations. This time, however, we should be signing the agreement with Singapore at the summit in Rio de Janeiro,” said Ambassador Maurício Lyrio, secretary for Economic and Financial Affairs at Brazil’s Foreign Ministry, adding that the deal is nearly through its review phase.
Since it was created in 1991, Mercosur has only signed three agreements with countries outside the region—Israel in 2007, Egypt in 2010, and Palestine in 2011. The bloc has also signed some preference agreements (not full free-trade agreements), with India and with southern African countries that form the Southern African Customs Union (SACU), which brings together South Africa, Botswana, Lesotho, Namibia, and Swaziland.
Partnership with Brazil
The accord with Singapore, the ambassador pointed out, is crucial for Brazil given the solid trade ties between the two, which boast $8 billion in exports from Brazil to Singapore by 2022, with a substantial surplus for the Latin American nation.
The small country is Brazil’s top trading partner in Asia after China and Brazil’s seventh biggest trading partner worldwide. Singapore, he added, has invested heavily in Brazil and most Brazilian companies with an interest in Asia have their headquarters there. He also argued that the negotiation was satisfactory for Brazil and Mercosur, since it was possible to maintain the preference of Brazilian companies for government purchases in Brazil, which is one of the demands of President Lula’s government in reaching trade contracts, including with the European Union.
In 2022, the Brazil–Singapore trade balance reached $9.35 billion. Brazil’s exports to Singapore amounted to $8.345 billion—of which US$5.77 billion corresponds to refined and crude oil, while Singaporean imports of Brazilian products amounted to around $1 billion.
The main products exported by Brazil to Singapore are from the oil and mining sectors (refined oil, crude oil, ferroniobium), followed by agricultural products (chicken, pork, and beef), plus gas turbines.
Brazil is responsible for 58 percent of beef, 48 percent of chicken, and 39 percent of pork consumed locally.
The main products imported by Brazil from Singapore are electronic components and integrated circuits, as well as insecticides.
Translation: Fabrício Ferreira - Edition: Fernando Fraga