Itamaraty sees potential for Mercosur–Indonesia deal but rules out free trade agreement

President Luiz Inácio Lula da Silva (PT) departed for Indonesia on Tuesday (21) and is expected to use the trip to validate the resumption of negotiations between the country and Mercosur, which is currently chaired by Brazil.

According to Brazil’s Ministry of Foreign Affairs (Itamaraty), there are “signs of openness” toward a comprehensive trade agreement that would reduce tariff barriers. However, the idea of a full free trade agreement is not currently under discussion, the Brazilian chancellery clarified.

“We have seen some movement to resume talks on a broader economic agreement, which should not be confused with a free trade agreement. It will be an agreement aimed at reducing tariff barriers,” explained Ambassador Everton Frask Lucero, director of Itamaraty’s Department for India, South and Southeast Asia. “It is a process that still needs to be negotiated,” he added.

Lula’s visit to Indonesia will be a state visit, reciprocating Indonesian President Prabowo Subianto’s trip to Brazil in July of this year. As a result, business events between the two countries will also take place during the visit.

The Brazilian delegation includes around 100 business leaders who have been invited to accompany the president, with the goal of strengthening ties with Indonesian investors.

“High-level contacts between Brazil and Indonesia have intensified. This is a moment to reinforce the strategic partnership,” Lucero added.

After visiting Indonesia, Lula will travel on Friday (24) to Malaysia, where he will take part for the first time in the Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur.

The invitation for Brazil’s participation in the meeting is unprecedented and stems, according to Itamaraty, from the growing rapport between Lula and Malaysian Prime Minister Anwar Ibrahim. The two leaders are said to have found “strong similarities” in their global positions.

ASEAN is a bloc composed of ten countries and 680 million inhabitants, with rapid economic growth and technological development. The group’s combined gross domestic product (GDP) is about US$4 trillion, making it the world’s fourth-largest economy, behind only the United States, China, and Japan.

In another potential development, the Malaysian leg of Lula’s trip could open an opportunity for him and U.S. President Donald Trump to hold their first in-person bilateral meeting. Both will be in Kuala Lumpur on October 26 — a date that Itamaraty described as a “possible window” for such an encounter.

“There is time set aside for this [bilateral meetings]. There are windows, and it’s possible to accommodate such encounters,” Lucero said when asked about the potential meeting between the two heads of state.

So far, Lula’s only confirmed bilateral meeting during the ASEAN summit is with Indian Prime Minister Narendra Modi. The two leaders are expected to discuss details of Lula’s planned visit to India in February next year.

Source: Valor Econômico

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