Brazil Examines US-Argentina Trade Deal over Mercosur Conflicts  

• Brazil is scrutinising a trade agreement announced by Washington on Friday, February 6, 2026, between the United States and Argentina due to concerns that it violates the rules of the South American trade bloc Mercosur^[1]. At first reading of the document released by Washington, it appears to go beyond the limits set for bilateral deals by Mercosur members, according to sources.
• To strengthen the negotiating power of the bloc, Mercosur restricts how far members can go in signing their own trade pacts with third countries. Last year, amid global trade tensions sparked by U.S. President Donald Trump, Argentina sought and obtained a temporary expansion of exemptions to the bloc's common external tariff. Brazil and Argentina were granted 150 exceptions each, while Uruguay and Paraguay received larger quotas.
• Asked about Brazilian scrutiny of the deal, an Argentine official said, "The tariff reductions announced for U.S. products fall within the list of 150 exceptions that Argentina is entitled to." But Brazilian officials told Reuters the new U.S.-Argentine agreement appears to cover closer to 200 items.
• The bilateral trade pact may also run into other non-tariff issues, such as Mercosur's rules of origin for goods, services and technical barriers. The move by Argentine President Javier Milei, one of Trump's closest allies in the region, to initiate unilateral talks with Washington would make it difficult to accommodate the deal within last year's exceptions.
• At a Friday press conference, when asked if Mercosur could obstruct the deal, Argentine Foreign Minister Pablo Quirno said the trade bloc does not stop members from such agreements. He noted that Milei could implement parts of the deal by decree, although the overall trade and investment pact would require congressional approval.
• Mercosur, founded 35 years ago, has faced repeated strains as members have sought to expand trade ties independently, though none has previously gone ahead with a side deal.
• Uruguay nearly signed a free trade agreement with the United States in 2006 before backing off over fears it could face expulsion from the bloc. The country has also pursued an FTA with China, generating friction with Argentina, Brazil and Paraguay. In 2019, under former Brazilian President Jair Bolsonaro, then Finance Minister Paulo Guedes threatened to leave the bloc, accusing it of holding back Brazil's trade ambitions. Neither Bolsonaro nor his leftist successor, Luiz Inacio Lula da Silva, has taken any formal steps to break with Mercosur.

(Source: Reuters)

 

^[1] Mercosur (Southern Common Market) is a South American economic and political bloc, established in 1991 to promote free trade and regional integration. The full member countries are Argentina, Brazil, Paraguay, Uruguay, and Bolivia. Venezuela is a member but has been suspended since 2016, while several other South American nations are associated members.