Canada and South America’s Mercosur bloc are advancing toward a free‑trade agreement that could be signed by the end of the year, with another round of negotiations scheduled for next month in Brasilia, according to three sources familiar with the talks.
The government officials, from Canada, Argentina and Brazil, told Reuters they expect the deal to be concluded in 2026, with one noting that talks were progressing well and could be wrapped up before September.
The Argentine government official said that the agreement is expected to be signed in September or October, marking roughly a year since negotiations formally restarted.
Another diplomat, based in Brazil, also told Reuters negotiations are going at a record speed and extremely well, confirming the countries will probably reach a deal this year.
Canadian Prime Minister Mark Carney is expected to visit Brazil in the next quarter, said this source. Although neither government plans to announce an agreement during the visit, it may serve as a push to finalize one as soon as possible, the source said.
Mercosur’s office in Montevideo and the Canadian trade ministry did not immediately respond to requests for comment.
The renewed momentum follows months of technical exchanges after Canada and Mercosur agreed last year to relaunch the talks that had been stalled since 2021. Mercosur is composed of Argentina, Brazil, Paraguay and Uruguay, with Bolivia expected to become a full member in 2028.
Canada has intensified efforts to diversify trade amid uncertainty linked to tariffs imposed by U.S. President Donald Trump and South America, especially Brazil, said this source, is a trade partner Canada cannot do without. For Mercosur, a major exporter of beef, soy and minerals, an agreement with Canada would expand access to developed markets and help attract investment in key industries such as mining.
Earlier in March, trade officials from Ontario, a province central to Canada’s economy, visited Argentina and Uruguay as part of efforts to lay the groundwork for a future deal and showcase support for increased bilateral trade. Ontario’s Minister of Economic Development, Job Creation and Trade, Victor Fedeli, met with technology and mining industry representatives as part of the trip, building on a visit to Brazil late last year.
Fedeli said Ontario was stepping up outreach to South America partly due to what he called the “Trump acceleration” effect, noting that roughly 80% of the province’s trade is with the United States.
“We’re building on that momentum,” Fedeli said in an interview with Reuters in Montevideo. “The Canadian government is serious about diversifying away from the U.S., working to unlock new opportunities for trade, partnership, and investment,” he added.
The talks with Canada come after Mercosur signed a trade agreement with the European Union in January, following 25 years of negotiations. Earlier this month the European Commission said key trade elements of the accord, which has proven contentious in Europe, will apply on a provisional basis from May 1.
