The summit between President Lee Jae-myung and Brazilian President Luiz Inácio Lula da Silva on May 23 is expected to give momentum to Korea-Mercosur trade agreement negotiations. Brazil had blocked the trade deal years ago, but appears to be rapidly reassessing Korea as an attractive partner amid intensifying US-China strategic competition. Brazilian beef, a key sticking point, is expected to compete with US and Australian imports rather than domestic Korean beef (hanwoo).
Significance of Three Agricultural MOUs
Of the 10 memoranda of understanding signed at the Korea-Brazil summit, three focus on agriculture. These include cooperation on pesticide licensing and a partnership between Korea's Rural Development Administration and Brazil's Agricultural Research Corporation (EMBRAPA). Brazil is a global food production powerhouse with advanced agricultural technology, and EMBRAPA is an institution Korea has long sought to partner with. The breakthrough in previously stalled cooperation is seen as groundwork for resuming Korea-Mercosur trade negotiations.
Mercosur is South America's largest economic bloc, comprising Brazil, Argentina, Paraguay, and Uruguay. Korea-Mercosur trade negotiations stalled in 2021. The South American side sought manufacturing sector market access, while Korea resisted opening its agricultural markets. Brazil, as Mercosur's de facto leader, was particularly opposed. Brazil demanded access to Korea's beef and grain markets, but the initiative lost momentum due to domestic agricultural industry opposition and inter-ministerial disagreements.
However, five years later, the international landscape has fundamentally changed. The Trump administration has intensified strategic engagement with Latin America, while China has built cooperation networks with roughly 20 of the region's 30-plus countries through its Belt and Road Initiative. As global supply chains bifurcate along US-China lines, Brazil faces growing pressure to reduce dependence on any single country and diversify its trading partners.
Brazil's leverage includes Latin America's largest domestic market with over 210 million people, abundant agricultural products, and natural resources. According to the US Geological Survey, Brazil holds approximately 21 million tons of rare earth reserves—second globally only to China's 44 million tons.
Resilience to Counter China Using the US
This means Brazil can maintain considerable staying power amid US-China strategic competition. Like other Global South nations, Brazil is considered a "swing state" holding a casting vote between the two superpowers. While China is Brazil's largest trading partner, Brazil has maintained strategic distance by not joining the Belt and Road Initiative. Brazil has responded relatively firmly to US reciprocal tariff pressure while cooperating on matters offering practical benefits. Some analysts suggest Brazil is employing a strategy of leveraging the US to counter China. Simultaneously, Brazil is pursuing diversification, including leading the conclusion of EU-Mercosur negotiations that had drifted for 16 years.
In this context, Korea presents an attractive option for Brazil. Unlike the two superpowers, Korea poses no threat while possessing technological and manufacturing capabilities. Korea's traditional vulnerability as a "shrimp among whales" becomes a strength in Brazil and Latin America. Various Korean companies already operate in the region. Global Sae-A, which runs textile factories in Costa Rica, Guatemala, Nicaragua, Haiti, El Salvador, and Honduras, has contributed significantly to local job creation given the labor-intensive nature of the textile industry. In Argentina and Chile, Korean companies are investing in critical minerals projects.
The biggest challenge remains the agricultural market. Domestic agricultural industry opposition to imported grains and beef is substantial. However, analysts suggest Brazilian beef would not directly compete with hanwoo even if markets open. Brazil's logistics infrastructure lacks proper cold chain systems, limiting exports to frozen rather than chilled beef. One Latin America expert predicted, "Even if Brazilian beef enters the market, it will ultimately compete with US and Australian beef." The expert added, "Nevertheless, given the political burden on the government and legislature, the top decision-maker will need to drive summit follow-up measures in a top-down manner."