Indonesia, Brazil Explore Mercosur PTA to Boost Trade Ties

RRI.CO.ID, Jakarta - Indonesia and Brazil are weighing the creation of an Indonesia-Mercosur Preferential Trade Agreement (PTA) as a pragmatic first step toward strengthening economic relations.

Indonesian Trade Minister Budi Santoso raised the proposal during a bilateral meeting with Brazil’s Minister of Development, Industry, Trade, and Services, Márcio Fernando Elias Rosa, in Jaipur, India, on Friday, August 7, 2026.

He expressed hope the initiative could evolve into a more comprehensive economic partnership in the future. “We also hope Brazil can help build consensus among Mercosur members and advance negotiations on the Indonesia-Mercosur PTA,” Minister Budi said in Jakarta on Sunday, August 9, 2026, s quoted by Antara.

Mercosur is South America’s largest trade bloc, founded in 1991, and today includes Argentina, Brazil, Paraguay, Uruguay, and Bolivia. It functions as a customs union and free‑trade area, aiming to deepen regional integration and expand global trade partnerships.

The PTA option was introduced as an alternative to the stalled talks on a broader Comprehensive Economic Partnership Agreement (CEPA). Differing views of Mercosur’s members on trade formats have slowed progress.

Minister Budi highlighted that stronger Indonesia-Brazil trade ties could open wider market access across both regions. Brazil could serve as a gateway for Indonesian products into Latin America, while Indonesia could provide entry for Brazilian goods into Asia.

“Trade cooperation between Indonesia and Brazil not only benefits both countries but also expands access to each other’s regional markets,” he noted.

Minister Márcio welcomed Indonesia’s proposal and signaled Brazil’s openness to further discussions, while committing to study the plan.

From January to June 2026, bilateral trade between Indonesia and Brazil reached USD 3.53 billion, with Indonesia’s exports valued at USD 1.17 billion. In 2025, total trade stood at USD 7 billion, including USD 2.21 billion in Indonesian exports.

Indonesia’s key exports to Brazil include animal and vegetable fats and oils, vehicles and parts, electrical machinery, rubber products, and mineral fuels. Brazil’s main exports to Indonesia consist of food industry residues, sugar and confectionery, cotton, tobacco, and metal ores.

The proposed PTA reflects Indonesia’s effort to secure practical progress in trade relations with Mercosur while laying the groundwork for deeper economic integration. ***