Japanese Prime Minister Takashi and Brazilian President Luiz Inácio Lula da Silva agreed to start negotiations for a Japan-Mercosur Economic Partnership Agreement.
The agreement marks a strategic shift for Tokyo as it seeks to secure critical minerals and energy supplies while expanding its market reach in South America. By partnering with the Mercosur trade bloc, Japan aims to reduce its reliance on a limited number of suppliers for essential materials.
The leaders reached the agreement on June 16, 2026, during the G7 summit in France [1, 2, 4]. Mercosur consists of five member countries [1] with a combined GDP of approximately 480 trillion yen [1].
Prime Minister Takashi said the partnership is important for national security. "Japan is diversifying its sources of critical minerals and energy, so strengthening economic security cooperation with Brazil, which is rich in these resources, is extremely important," Takashi said [1]. He said that the Economic Partnership Agreement, or EPA, can serve as the foundation for such cooperation [1].
Takashi also said he would be pleased if the negotiations proceed in a way that benefits both sides [1].
Government officials said that the agreement has significant potential for developing new markets, and strengthening the resilience of supply chains for critical materials [3]. To maintain this momentum, Japan intends to begin office-level talks by summer 2026 [3].
The move reflects a broader Japanese strategy to insulate its economy from geopolitical volatility by forging deeper ties with resource-rich nations in the Global South. The scale of the Mercosur market provides a substantial opportunity for Japanese exports and industrial investment.
“Japan is diversifying its sources of critical minerals and energy”
This agreement signals Japan's urgency in diversifying its supply chains to mitigate economic security risks. By targeting a trade bloc with a combined GDP of 480 trillion yen, Tokyo is not only seeking raw materials but is also positioning itself to compete more effectively in South American markets against other global powers. The focus on 'critical minerals' suggests a specific priority toward the components necessary for green energy and high-tech manufacturing.
