Japan and Mercosur begin talks on economic partnership agreement

Japan and the Mercosur trade bloc have officially agreed to commence negotiations for an Economic Partnership Agreement (EPA). This significant step was announced Tuesday after a meeting between Japanese Prime Minister Sanae Takaichi and Brazilian President Luiz Inácio Lula da Silva on the sidelines of the G7 summit in Évian, France.

The joint statement signaling the start of EPA talks was welcomed by both leaders, who expressed their anticipation for a "mutually beneficial" agreement. They emphasized that the EPA would further strengthen economic ties between Japan and the Mercosur member states: Argentina, Brazil, Paraguay, and Uruguay, with Bolivia nearing full membership.

Details emerging from the negotiations suggest a focus on key sectors. Japanese economic media reported that the agreement would likely involve reducing tariffs on automobiles. Additionally, it aims to diversify Japan's supply of crucial resources, including oil and critical minerals, a move prompted by recent supply chain disruptions.

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The two leaders welcomed the publication of a joint statement announcing the start of negotiations on the Economic Partnership Agreement (EPA) between Japan and Mercosur.

Japan's reliance on Middle Eastern oil, with approximately 90% of its crude imports originating from the region, has been a point of concern. Disruptions, such as those potentially caused by conflicts affecting the Strait of Hormuz, have led Japan to utilize its strategic oil reserves. This potential EPA with Mercosur offers a pathway to securing more diverse energy and mineral sources.

This development follows years of discussions between Japan and Mercosur regarding a free trade agreement. In December, both parties had already committed to enhancing bilateral relations through a Strategic Partnership Framework, laying the groundwork for the current EPA negotiations.

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mutually beneficial