The South American trade bloc Mercosur — which includes Argentina, Bolivia, Brazil, Paraguay and Uruguay — launched negotiations with Japan on June 30 for an economic partnership agreement, Reuters reported.

A Mercosur-Japan free trade area would cover nearly 400 million people and have a combined GDP of $7 trillion. However, because annual bilateral trade remains relatively low at approximately $13.7 billion, the macroeconomic gains from such a deal would be limited. Mercosur closed a trade deal with the European Union in January 2026 after more than 25 years of negotiations. The bloc is also holding trade talks with Canada, the United Arab Emirates, India and Vietnam.