Brazilian President Luiz Inacio Lula da Silva (left) and Japanese Prime Minister Sanae Takaichi shake hands during talks in Evian, France, on June 16.
SAO PAULO (Jiji Press) -- Members of the Mercosur trade bloc in South America formally announced the start of negotiations for an economic partnership agreement with Japan at a summit in the Paraguayan capital of Asuncion on Tuesday.
If realized, the EPA between Japan and Mercosur, whose members include Brazil and Argentina, would create an economic bloc with a population of about 400 million and a gross domestic product of about 7 trillion dollars.
On June 16, Japanese Prime Minister Sanae Takaichi agreed with Brazilian President Luiz Inacio Lula da Silva to launch EPA negotiations during talks in Evian, eastern France, held on the sidelines of the summit of the Group of Seven major powers.
In a joint statement issued on Tuesday, Mercosur, or the Southern Common Market, stressed that an EPA with Japan would expand market access and mutual investment in the agricultural and non-agricultural sectors.
In Japan, expectations are growing for the South American market, especially in the automobile sector.
However, farmers are concerned about the influx of lower-cost imports from the region, given that Brazil and Argentina are among the world's leading exporters of agricultural and livestock products.
Mercosur will push for a trade deal amid increased uncertainty in global trade caused by the high-tariff policies of U.S. President Donald Trump's administration. The provisional application of the Mercosur-European Union free trade agreement began in May.
Lula said at Tuesday's meeting that Brazil is advancing dialogue with Canada, India and Vietnam, while also expressing his intention to begin talks with China.