The Koreas | Diplomacy | East Asia

During Lula’s Visit, South Korea and Brazil Agree to Revive Mercosur Trade Talks

Amid intensifying China-U.S. rivalry and global trade volatility, middle powers such as South Korea and Brazil are diversifying their supply chains through minilateralism.

On February 22, Brazilian President Luiz Inacio Lula da Silva arrived in Seoul for a three-day state visit at the invitation of South Korean President Lee Jae-myung. This marked the first visit by a Brazilian head of state to South Korea in 21 years. Lula was the first foreign leader to be received at the Blue House since Lee returned to the original presidential compound last December.

During the summit, both sides agreed to upgrade bilateral ties from a “comprehensive cooperative partnership” to a “strategic partnership” and adopted a joint four-year roadmap for future economic cooperation. The summit culminated in South Korea and Brazil signing ten memoranda of understanding (MOUs) to strengthen cooperation in trade, AI, biotech, science, security, the economy, agriculture, and health. Most notably, Lee and Lula agreed to resume the stalled Southern Common Market (Mercosur) trade negotiations. 

The decision by South Korea and Brazil to revive the Mercosur trade talks comes at a critical juncture, as both countries face uncertainty after U.S. President Donald Trump introduced a new set of global tariffs of 10 percent following the U.S. Supreme Court’s ruling striking down his previous tariffs. Given that Brazil is South Korea’s largest trading partner in South America, much was at stake for both sides in terms of cooperation across trade, key minerals, and technology. The summit was held at an opportune time for Lee, who seeks to diversify South Korea’s supply chains and sources of rare earth elements and critical minerals. 

As middle powers, both Seoul and Brasília are committed to strengthening trade resilience and mitigating external trade shocks. Against the backdrop of intensifying Sino-U.S. strategic competition and South Korea’s sensitive tariff negotiations with Washington, Lee is seeking to broaden Seoul’s economic partnerships with like-minded middle powers. In this vein, Brazil represents a pivotal piece on Lee’s strategic chessboard as he expands South Korea’s global footprint and economic engagement across various regions.

The strong camaraderie between the two leaders was palpable, as this was their third meeting following the G-7 summit last June and the G-20 summit last November. From rolling out the red carpet to wearing a navy suit and a gold tie symbolizing the Brazilian flag, Lee was exceptionally welcoming toward the Brazilian president, extending the “highest level of protocol” and referring to Lula as his “eternal comrade.” Even First Lady Kim Hea-kyung donned a traditional hanbok accented with Brazilian green and yellow hues. Regarding the extraordinary protocol Lee accorded to Lula, the Blue House stated, “This scale is equivalent to the state visit of U.S. President Donald Trump in November 2017.” 

An overarching theme frequently raised during the summit was the personal rapport between the two leaders, shaped by their past as child laborers. During his address at the state banquet on Monday, Lee even went off script, remarking, “This was not in my prepared remarks, but when people heard that President Lula and I were meeting, many congratulated us, saying it was a meeting of former child laborers.” Lula reciprocated, saying, “Since learning about President Lee’s life path, I have felt we are like brothers.” 

Moreover, the two leaders and their spouses deepened their bond through “gastrodiplomacy.”  For the state banquet menu, the Blue House prepared a fusion of signature Korean and Brazilian cuisine. After the banquet, Lee showcased “chimaek” diplomacy as they enjoyed a relaxed exchange over chicken and beer in the Blue House’s Sangchunjae. 

Meanwhile, the banquet and reception provided an ideal platform for business networking on the sidelines, as presidential aides, ministers, legislators, and top executives from major Korean conglomerates such as Samsung, SK Group, LG, and Hyundai Motor were in attendance. Earlier that day, the conglomerate chiefs attended the Korea-Brazil Business Forum in Seoul, where they signed six MOUs encompassing critical minerals, biopharmaceuticals, and digital healthcare. Additionally, some 400 government officials and corporate leaders attended the business forum, including Lula and his 300-member economic delegation.

One of the most significant outcomes of the summit was Lee and Lula’s decision to revive Mercosur trade talks, which have been on hiatus five five years. South Korea first began negotiations for a free trade agreement (FTA) with Mercosur – a trade bloc that includes Brazil, Paraguay, Argentina, and Uruguay – in 2018, but the talks have been halted since 2021 after seven rounds of negotiation. The proposed FTA faced the strongest resistance from South Korea’s agricultural sector and Mercosur’s manufacturing sector. 

Nevertheless, as South America’s largest economic bloc, Mercosur offers significant opportunities for South Korea. Concluding an FTA would allow South Korean firms to increase investment and exports to member states while also securing critical minerals and key raw materials. In particular, rare earth elements such as nickel are indispensable to South Korea, which is highly reliant on them for its electric vehicle, semiconductor, renewable energy, and manufacturing sectors. Moreover, a successful FTA would also enable Seoul to tap into a market of 270 million people.

Although Brazil holds the world’s second-largest rare earth reserves after China, it accounts for less than 1 percent of global production due to its limited extraction capacity. Given that South Korea depends on China for the majority of its rare earth materials and raw material imports, Seoul is seeking to diversify its critical mineral supply chains by looking to South America. 

During a joint press announcement following the summit, Lee stated, “I explained the need to promptly resume negotiations for a trade agreement between South Korea and the South American common market, and President Lula deeply agreed that concluding the agreement is an urgent task.” He added, “Today will be recorded as a historic day that created a new leap forward in bilateral relations… Bilateral trade has steadily increased, exceeding $10 billion each year over the past five years, and cooperation is expanding into promising future fields.” Meanwhile, Lula advocated for greater market access for Brazilian beef in South Korea, emphasizing, “I explained to President Lee Jae-myung that if sanitary and quarantine requirements for exporting Brazilian beef are finalized promptly, it would also benefit Korean consumers.”

As South Korea and Brazil have ushered in a new era of bilateral relations, they are poised to reap the benefits of their complementary strengths in a mutually beneficial partnership. The strong rapport between Lee and Lula during the summit was a testament to the enduring friendship between the two middle powers and set the stage for closer economic cooperation in the future. The broader takeaway from the summit is that, amid intensifying China-U.S. rivalry and global trade volatility fueled by Trump’s tariffs, middle powers such as South Korea and Brazil are diversifying their supply chains through minilateralism, as multilateral efforts have become bogged down by political gridlock.

Seoul’s heightened economic engagement and elevated relations with Brasília align with Lee’s pragmatic diplomacy and will be the first of many partnerships to come during his administration. Moreover, the time has come for Lee to craft a comprehensive grand strategy toward South America, akin to South Korea’s previous foreign policy initiatives such as Nordpolitik, Trustpolitik, the New Southern Policy, and the Indo-Pacific Strategy. 

Get to the bottom of the story

Subscribe today and join thousands of diplomats, analysts, policy professionals and business readers who rely on The Diplomat for expert Asia-Pacific coverage.

Get unlimited access to in-depth analysis you won't find anywhere else, from South China Sea tensions to ASEAN diplomacy to India-Pakistan relations. More than 5,000 articles a year.

Unlimited articles and expert analysis

Weekly newsletter with exclusive insights

16-year archive of diplomatic coverage

Ad-free reading on all devices

Support independent journalism

Already have an account? Log in.

On February 22, Brazilian President Luiz Inacio Lula da Silva arrived in Seoul for a three-day state visit at the invitation of South Korean President Lee Jae-myung. This marked the first visit by a Brazilian head of state to South Korea in 21 years. Lula was the first foreign leader to be received at the Blue House since Lee returned to the original presidential compound last December.

During the summit, both sides agreed to upgrade bilateral ties from a “comprehensive cooperative partnership” to a “strategic partnership” and adopted a joint four-year roadmap for future economic cooperation. The summit culminated in South Korea and Brazil signing ten memoranda of understanding (MOUs) to strengthen cooperation in trade, AI, biotech, science, security, the economy, agriculture, and health. Most notably, Lee and Lula agreed to resume the stalled Southern Common Market (Mercosur) trade negotiations. 

The decision by South Korea and Brazil to revive the Mercosur trade talks comes at a critical juncture, as both countries face uncertainty after U.S. President Donald Trump introduced a new set of global tariffs of 10 percent following the U.S. Supreme Court’s ruling striking down his previous tariffs. Given that Brazil is South Korea’s largest trading partner in South America, much was at stake for both sides in terms of cooperation across trade, key minerals, and technology. The summit was held at an opportune time for Lee, who seeks to diversify South Korea’s supply chains and sources of rare earth elements and critical minerals. 

As middle powers, both Seoul and Brasília are committed to strengthening trade resilience and mitigating external trade shocks. Against the backdrop of intensifying Sino-U.S. strategic competition and South Korea’s sensitive tariff negotiations with Washington, Lee is seeking to broaden Seoul’s economic partnerships with like-minded middle powers. In this vein, Brazil represents a pivotal piece on Lee’s strategic chessboard as he expands South Korea’s global footprint and economic engagement across various regions.

The strong camaraderie between the two leaders was palpable, as this was their third meeting following the G-7 summit last June and the G-20 summit last November. From rolling out the red carpet to wearing a navy suit and a gold tie symbolizing the Brazilian flag, Lee was exceptionally welcoming toward the Brazilian president, extending the “highest level of protocol” and referring to Lula as his “eternal comrade.” Even First Lady Kim Hea-kyung donned a traditional hanbok accented with Brazilian green and yellow hues. Regarding the extraordinary protocol Lee accorded to Lula, the Blue House stated, “This scale is equivalent to the state visit of U.S. President Donald Trump in November 2017.” 

An overarching theme frequently raised during the summit was the personal rapport between the two leaders, shaped by their past as child laborers. During his address at the state banquet on Monday, Lee even went off script, remarking, “This was not in my prepared remarks, but when people heard that President Lula and I were meeting, many congratulated us, saying it was a meeting of former child laborers.” Lula reciprocated, saying, “Since learning about President Lee’s life path, I have felt we are like brothers.” 

Moreover, the two leaders and their spouses deepened their bond through “gastrodiplomacy.”  For the state banquet menu, the Blue House prepared a fusion of signature Korean and Brazilian cuisine. After the banquet, Lee showcased “chimaek” diplomacy as they enjoyed a relaxed exchange over chicken and beer in the Blue House’s Sangchunjae. 

Meanwhile, the banquet and reception provided an ideal platform for business networking on the sidelines, as presidential aides, ministers, legislators, and top executives from major Korean conglomerates such as Samsung, SK Group, LG, and Hyundai Motor were in attendance. Earlier that day, the conglomerate chiefs attended the Korea-Brazil Business Forum in Seoul, where they signed six MOUs encompassing critical minerals, biopharmaceuticals, and digital healthcare. Additionally, some 400 government officials and corporate leaders attended the business forum, including Lula and his 300-member economic delegation.

One of the most significant outcomes of the summit was Lee and Lula’s decision to revive Mercosur trade talks, which have been on hiatus five five years. South Korea first began negotiations for a free trade agreement (FTA) with Mercosur – a trade bloc that includes Brazil, Paraguay, Argentina, and Uruguay – in 2018, but the talks have been halted since 2021 after seven rounds of negotiation. The proposed FTA faced the strongest resistance from South Korea’s agricultural sector and Mercosur’s manufacturing sector. 

Nevertheless, as South America’s largest economic bloc, Mercosur offers significant opportunities for South Korea. Concluding an FTA would allow South Korean firms to increase investment and exports to member states while also securing critical minerals and key raw materials. In particular, rare earth elements such as nickel are indispensable to South Korea, which is highly reliant on them for its electric vehicle, semiconductor, renewable energy, and manufacturing sectors. Moreover, a successful FTA would also enable Seoul to tap into a market of 270 million people.

Although Brazil holds the world’s second-largest rare earth reserves after China, it accounts for less than 1 percent of global production due to its limited extraction capacity. Given that South Korea depends on China for the majority of its rare earth materials and raw material imports, Seoul is seeking to diversify its critical mineral supply chains by looking to South America. 

During a joint press announcement following the summit, Lee stated, “I explained the need to promptly resume negotiations for a trade agreement between South Korea and the South American common market, and President Lula deeply agreed that concluding the agreement is an urgent task.” He added, “Today will be recorded as a historic day that created a new leap forward in bilateral relations… Bilateral trade has steadily increased, exceeding $10 billion each year over the past five years, and cooperation is expanding into promising future fields.” Meanwhile, Lula advocated for greater market access for Brazilian beef in South Korea, emphasizing, “I explained to President Lee Jae-myung that if sanitary and quarantine requirements for exporting Brazilian beef are finalized promptly, it would also benefit Korean consumers.”

As South Korea and Brazil have ushered in a new era of bilateral relations, they are poised to reap the benefits of their complementary strengths in a mutually beneficial partnership. The strong rapport between Lee and Lula during the summit was a testament to the enduring friendship between the two middle powers and set the stage for closer economic cooperation in the future. The broader takeaway from the summit is that, amid intensifying China-U.S. rivalry and global trade volatility fueled by Trump’s tariffs, middle powers such as South Korea and Brazil are diversifying their supply chains through minilateralism, as multilateral efforts have become bogged down by political gridlock.

Seoul’s heightened economic engagement and elevated relations with Brasília align with Lee’s pragmatic diplomacy and will be the first of many partnerships to come during his administration. Moreover, the time has come for Lee to craft a comprehensive grand strategy toward South America, akin to South Korea’s previous foreign policy initiatives such as Nordpolitik, Trustpolitik, the New Southern Policy, and the Indo-Pacific Strategy. 

Yoonki Lee is an MPhil student in International Relations at the University of Oxford. He graduated summa cum laude from Yonsei University with a BA in International Studies.

Brazil-South Korea relations

Luiz Inácio Lula da Silva

South Korea foreign policy

© The Diplomat