Vietnam and Uruguay seek to initiate negotiations for a free trade agreement with MERCOSUR nations
In a significant development, Vietnam and Uruguay are working towards a free trade agreement (FTA) with the South American economic bloc MERCOSUR. The aim is to pave the way for negotiations between Vietnam and MERCOSUR, which consists of Brazil, Argentina, Uruguay, and Paraguay.
The meeting, held on August 19, 2025, in Hanoi, saw Vietnam's Deputy Minister of Industry and Trade, Nguyen Hoang Long, and Uruguayan Deputy Foreign Minister Valeria Csukasi discuss the potential benefits and complexities of such an agreement.
For Vietnam, an export-driven economy seeking to diversify markets, MERCOSUR represents a vast and largely untapped region. With over 260 million people and a GDP of around $2.5 trillion, MERCOSUR is the fifth-largest economic bloc globally. An agreement with MERCOSUR would add a crucial link to Vietnam's global trade network, which already includes major trade pacts like CPTPP, EVFTA, and RCEP.
On the other hand, for Uruguay, Vietnam is a priority partner in Asia. In 2024, bilateral trade between the two countries reached $170 million, a 35% increase from the previous year. Vietnam exported $110 million worth of goods to Uruguay, primarily consisting of footwear, garments, electronics, seafood, and handicrafts. Imports from Uruguay in 2024 were $60 million, mainly timber, raw materials, dairy, pharmaceuticals, and animal feed.
The structure of bilateral trade remains narrow, with Vietnam primarily selling consumer goods and importing raw materials. However, an agreement could broaden this base, enabling Vietnamese firms to expand into Latin America and providing South American exporters with easier access to the ASEAN market.
Both governments are committed to navigating the complexities of negotiating with a diverse bloc like MERCOSUR in pursuit of greater economic resilience. The agreement is expected to reduce tariffs while building frameworks for cooperation in manufacturing, renewable energy, and supply chain resilience.
Deputy Minister Long stated that the negotiation and signing of a Vietnam-MERCOSUR FTA would boost trade and investment between Vietnam and bloc members, including Uruguay. Deputy Minister Csukasi pledged Uruguay's full support for initiating FTA negotiations and committing to coordinate closely with other MERCOSUR members to move forward.
Domestic products such as textiles, footwear, electronics, seafood, and handicrafts could gain wider access in MERCOSUR. MERCOSUR, being a key supplier of agricultural and industrial goods and a market where demand for consumer products continues to expand, offers significant opportunities for Vietnamese exports.
The negotiations for a free trade agreement between Vietnam and MERCOSUR will be officially proposed at the next MERCOSUR meeting in early September 2025 by the Brazilian Foreign Minister Mauro Vieira. The potential agreement could significantly enhance the economic relationship between Vietnam and Uruguay, as well as Vietnam's position in the global trade landscape.
