Japan may soon manage something that the European Union has not yet done in South America, as negotiations to become an economic partner with the Mercosur trading block push ahead. Although the EU’s deal is reportedly reaching its final stages after 20 years of negotiations, Japan may beat the competition as it strives to increase its commercial presence in the region.
Japan is hardly the only Asian economy interested in closing a deal with Mercosur, creating more secure investments in Brazil, Argentina, Paraguay, and Uruguay. Brazil has received particular interest, accumulating a steady flow of foreign direct investment from Japan between 2001 and 2017 that totaled 33.8 billion USD.
With the region’s potential contributions to sectors such as agriculture and semi-manufactured goods, more favorable import and export conditions mean that South Korea is also trying to close a deal. China, too, has become a key partner in recent years, making large investments in key sectors such as energy and infrastructure.