Lula strengthens ties with Japan, proposes Mercosur trade pact

After decades of unanswered requests, the Japanese government has finally taken the first step toward allowing competitive Brazilian products—such as beef and biodiesel—into the world’s fourth-largest economy and the second-largest in Asia, behind China.

The move followed President Lula’s state visit to Japan, which began on Monday. He was accompanied by around 100 Brazilian business leaders and executives, and the trip resulted in the signing of nearly 90 memorandums, agreements, and contracts.

Beyond commercial progress, the leaders of Brazil and Japan agreed to hold a bilateral summit every two years. President Lula also advocated for a trade agreement between Japan and the Mercosur bloc, which includes Brazil, Argentina, Bolivia, Paraguay, and Uruguay.

“I leave [Japan] to tell Brazilians that the relationship between our countries has reached a new level,” Mr. Lula said after a press statement in Tokyo.

Japanese Prime Minister Shigeru Ishiba said he would maintain contact with Mr. Lula to ensure Japanese investments continue to flow into Brazil. According to him, Japanese companies have invested R$44 billion directly in Brazil since 2020.

A key highlight of the meeting was the announcement that Japanese technical teams will travel to Brazil to gather information on the country’s beef industry—a significant step toward enabling exports to Japan. While this initiative was expected to be mentioned only in the memorandums of understanding, its emphasis in the prime minister’s speech signaled a notably open stance from Tokyo.

Japan also indicated it would move forward on the adoption of biodiesel, a negotiation that has been underway for more than a decade. The fuel has strong potential for use in aviation.

The two leaders agreed that the biennial summits would aim to foster strategic alignment in political, economic, and environmental areas. The countries also plan to adopt a five-year action plan and create a new diplomatic and defense dialogue.

This breakthrough comes at a time when global trade is under strain due to the protectionist policies of the United States, particularly the tariff hikes under President Donald Trump.

Regarding a potential Japan–Mercosur agreement, Lula said, “In an increasingly complex world, it is essential for historic partners to come together to confront the uncertainties and instabilities of the global economy.”

Mercosur finalized a trade agreement with the European Union in December of last year, after 25 years of negotiations. However, the deal has not yet been implemented, as it still requires approval by Mercosur member legislatures, the European Council, and the European Parliament.

During his speech, Mr. Lula also called for the continuation of the reciprocal visa waiver for business and tourism travel between Brazil and Japan, describing it as “an essential step” for bilateral integration.

See below the main products exported in containers from Brazil to Japan in January 2025. The data is from DataLiner:

Main Brazilian products exported to Japan | Jan 2025 | TEU

Source: DataLiner (click here to request a demo)

He expressed regret over the decline in bilateral trade, which dropped to $11 billion last year from $17 billion in 2011, and reiterated his support for multilateralism. “We want free trade to ensure that our countries can establish themselves on the path of democracy, economic growth, and wealth distribution,” he said.

The list of agreements also included an evaluation of a temporary work visa program, commonly known as a “working holiday,” typically used by young students. The program would allow Brazilians to work as trainees in Japan—a country increasingly in need of foreign workers due to its declining birth rate.

Source: Valor International

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