Mercosur–Singapore deal to boost Brazil GDP

The free-trade agreement between Mercosur and Singapore, inked in Paraguay on Wednesday (Jul 20), may bring a BRL 28.1 billion boost into Brazil’s gross domestic product (GDP) by 2041, the country’s Ministry of Economy estimated.

The ministry also expects an increase of BRL 21.2 billion in Brazilian exports to Singapore and BRL 27.9 billion in imports over the next 20 years, plus a BRL 11.1 billion expansion in investments in the country.

As it stands today, the Asian country is the sixth largest destination of Brazilian exports. In June, Brazil sold $939.36 million to Singapore—2.88 percent of the total exported by the country. This is the case because the island country is among the top commercial hubs on the globe, concentrating the trade flow heading to Southeast Asia.

Foreign policy

The agreement is believed to represent “Brazil’s gradual rapprochement with the Asian continent, a priority in the country’s foreign and economic policy.”

Negotiated since 2018, the accord with Singapore should increase Mercosur’s exports to the Asian country by $500 million every year. In 2021, the economic bloc exported $5.9 billion to the island and imported $1.25 billion.