S’pore trade deal with Latin American bloc headed for Brazil Parliament vote ‘soon’: President Lula

Source: The Straits Times | Original Published At: 2025-10-27 12:36:47 UTC

Key Points

• Singapore-Mercosur FTA to be ratified by Brazilian Parliament soon
• Deal eliminates tariffs on 96% of products over 15 years
• Biofuel collaboration with Asean highlighted
• Brazil-Singapore trade quadrupled to US$8.7 billion in 10 years
• Bilateral cooperation in aviation, agribusiness, semiconductors
• Brics promotes multilateralism and alternative payment systems

SINGAPORE – A free trade agreement inked in 2023 between Singapore and four South American nations will be submitted to the Brazilian Parliament “soon” so that it may come into effect, said Brazilian President Luiz Inacio Lula da Silva.

The trade deal with Argentina, Brazil, Paraguay and Uruguay – a group known by the Spanish acronym Mercosur – will offer immediate tariff-free access to about 25 per cent of products when the pact comes into force, and gradually eliminate import tariffs on about 96 per cent of products over 15 years.

“Our trade and the opportunities in our relationship span many sectors, including agribusiness, aviation and biofuels,” Mr Lula said of Brazil-Singapore ties, in an exclusive e-mail interview with The Straits Times to coincide with an official tour of South-east Asia.

“Brazil is always open to negotiating new agreements with Singapore,” he said, noting that trade between the two countries has increased more than fourfold over 10 years to US$8.7 billion (S$11.3 billion).

“Embraer, the world’s third-largest aircraft manufacturer, already supplies commercial aircraft, and can provide military cargo planes to Singapore. Brazil also plays an important role in exporting animal protein to Singapore,” he added.

The English text of Singapore’s trade pact with Mercosur – the trade bloc’s first such deal with a South-east Asian nation – was signed in December 2023.

According to the legal text, ratification can be completed bilaterally. This means the respective parliaments of Brazil and Singapore may approve the deal without having to wait on the other Mercosur states.

Singapore’s Ministry of Trade and Industry said the Republic expects to complete its ratification soon.

A spokesperson said the ministry also understands that the trade agreement has been approved by the presidents of Paraguay and Uruguay, and it is awaiting official notification from the entity managing the deal’s entry into force.

Mr Lula, whose tour of the region included visits to Indonesia and Malaysia, was among several high-profile world leaders who gathered in Kuala Lumpur for the 47th Asean Summit.

He met various leaders there, including Singapore Prime Minister Lawrence Wong.

Mr Lula, who is the first Brazilian president to participate in the regional summit, told ST that Brazil and Asean have complementary and dynamic economies, and the potential for expanding bilateral trade is “vast”.

“We have a concrete path to strengthen our relationship and expand our dialogue,” he added, without providing specifics. Asean is Brazil’s fifth-largest trading partner, with trade exceeding US$37 billion in 2024.

Mr Lula said the world is undergoing profound transformations, and Asean and Brazil are at the centre of at least two of them.

“The first is the digital transition. Asean countries are playing an increasingly important role in it, thanks to their thriving semiconductor and microelectronics industries,” he said.

“The second is the energy transition, to which Brazil contributes significantly. We are leaders in renewable energy production, particularly in the field of bioenergy,” he added, referring to energy produced from organic materials. Examples include the biofuel ethanol, of which Brazil is the world’s second-largest producer.

During Mr Lula’s visit, Malaysia and Brazil announced a deal on Oct 26 to enhance cooperation in the semiconductor industry. Malaysian media reported that Brazil is eyeing a potential collaboration with Asean to boost biofuel production, too.

Mr Lula also met US President Donald Trump on the sidelines of the Asean Summit in Kuala Lumpur, with the Brazilian leader telling reporters after their meeting that “a definitive solution” on trade could happen within days.

The Trump administration imposed 50 per cent tariffs on Brazilian products in August in retaliation against the sentencing of former Brazilian president and Trump ally Jair Bolsonaro for his role in a coup attempt.

Brazil-US relations have thawed since both presidents met briefly at the UN General Assembly in September and spoke on the phone in October.

Ahead of his bilateral meeting with the US leader on Oct 27, Mr Lula told ST: “I respect President Donald Trump and wish to continue our dialogue, just as I have respected and engaged in dialogue with all previous US presidents.”

He added: “Brazil and the United States must serve as an example to the world by showing how the heads of state of the two largest Western democracies can engage in dialogue and reach an understanding, to the benefit of all Brazilians and Americans.”

Asked for his view on the tit-for-tat trade war between the US and China, Mr Lula said no country can solve its problems alone.

“We do not want a new Cold War, nor will we accept one. We will not choose sides. We want to negotiate with everyone, sell and buy to everyone, and form partnerships with everyone,” he said. “This is why we advocate multilateralism.”

Mr Lula said Brics – an 11-member bloc that includes Brazil, Russia, India, China and Indonesia – “is one of the strongest voices in favour of multilateral solutions”, noting that the group is working towards faster, cheaper and safer cross-border payment systems.

The Brazilian President, who has previously spoken about the need to reduce dependence on the US dollar, said it is only natural for countries to trade in their own currencies.

“This is also a topic of discussion within Asean and can help intensify international flows of trade and services,” he added.

With Brazil set to host the 30th United Nations Climate Change Conference in November in the city of Belem, which is located at the mouth of the Amazon River, Mr Lula said Singapore has been invited to contribute to the Tropical Forests Forever Facility (TFFF), a key initiative that will be launched at the conference.

The proposed US$125 billion fund aims to reward countries that preserve their standing forests, with Brazil the first to commit a US$1 billion investment.

Mr Lula, who has made the fight against deforestation a priority in his latest term of government, said Brazil has already received several positive signals about the fund.

He said: “We have invited Singapore and all Asean members to make equally ambitious contributions.”