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Brazil And Canada Resume Free Trade Agreement In 2025; Beef And Biofuels Enter The Radar And Could Open A Billion-Dollar Route Without Tariffs.
The year 2025 has been marked by a true market competition for Brazilian beef. With the United States imposing tariffs of up to 50% and China maintaining a dominant position in purchases, the Brazilian government is racing against time to diversify destinations. In this geopolitical chessboard, Canada reappears as a strategic piece, following the announcement of the resumption of negotiations between Mercosur and Ottawa for a free trade agreement.
If realized, the pact could allow the entry of Brazilian beef into Canadian territory with reduced or even zero tariffs, representing a billion-dollar alternative for a sector that accounts for nearly 10% of the country’s total exports.
An Agreement Paralyzed For Years That Comes Back With Strength In 2025
The talks between Mercosur and Canada began back in 2017 but were halted amid political changes and trade disagreements.
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Now, in light of new global tensions, the parties have decided to resume the negotiation rounds. According to Brazilian authorities, the agreement may encompass not only beef but also ethanol, biofuels, grains, and manufactured goods.
For Mercosur, the Canadian market is particularly attractive: it is the 10th largest economy in the world, with high per capita consumption and the ability to pay more for high-value-added products. Moreover, Ottawa is seen as a gateway to global supply chains involving the United States and Mexico, albeit indirectly.
Beef At The Center Of The Negotiation Table
The great trump card for Brazil is beef. Brazil is the largest exporter in the world, with over 2 million tons shipped abroad in 2024, and seeks to place the product in markets that value quality and volume.
Canada annually imports more than 300,000 tons of beef, primarily from the U.S. and Australia. Entering this market with competitive tariffs could mean a significant leap for national livestock.
The ABIEC (Brazilian Association of Exporters of Beef) estimates that in a free trade scenario, Brazil could capture between 10% and 15% of Canadian imports in the first few years. This would represent around US$ 1 billion in additional annual revenues, alleviating the impact of the barriers imposed by Washington.
The Contrast: U.S. Close Doors, Canada May Open Them
The American tariffs imposed in 2025 were a shock for Brazilian slaughterhouses. The country had been consolidating space in the U.S., but the new tariff policy practically made part of the exports unfeasible.
At the same time, China remains the main destination but exerts strong bargaining power, pushing prices and imposing sanitary demands.
In this context, Canada emerges as a “clean” alternative: a demanding market, but less politicized than the U.S. and the European Union, and still in need of supplier diversification. For Brazil, it is the chance to replace the role of problematic exporter with that of a reliable partner in global supply chains.
Biofuels And Energy: Another Strategic Front
In addition to beef, another sector that could benefit from the agreement is ethanol and biofuels. Canada has ambitious emission reduction goals and is seeking suppliers to ensure renewable fuel at competitive prices. Brazil, with its expertise in cane ethanol and beef tallow biodiesel, emerges as a natural ally.
If confirmed, the pact could transform Brazil into one of the main suppliers of clean energy to Canada, further strengthening the bond between agriculture and the energy matrix.
Resistances And Bottlenecks On The Path
Despite the optimism, experts warn that negotiations will not be easy. The Canadian agricultural sector, particularly beef and dairy producers, fears Brazilian competition. Just as occurred in Mercosur negotiations with the European Union, non-tariff barriers — such as sanitary and environmental requirements — could delay or limit the agreement.
Another delicate point is the unity within Mercosur itself. Brazil, Argentina, Uruguay, and Paraguay do not always have aligned interests, and internal disagreements can weaken the bloc’s position.
Brazil Seeks To Balance Its Partner Portfolio And Reduce Dependence On Two Poles — U.S. And China
More than just opening markets, the resumption with Canada sends a clear message: Brazil seeks to balance its partner portfolio and reduce dependence on two poles — the U.S. and China. By forming alliances with medium economies, the country shows its willingness to position itself as a global agri-food powerhouse capable of negotiating on multiple fronts.
For international analysts, the move also strengthens Mercosur, which had been seen as a paralyzed bloc. By reconnecting with Canada, the group gains new momentum and can unlock other strategic agreements.
If the terms advance, the impact on Brazilian livestock could be transformative. Entry into Canada would open up space not only for fresh beef but also for premium cuts, processed and even by-products aimed at the food industry.
Slaughterhouses like JBS, Marfrig, and Minerva, which already have global operations, are eyeing a slice of this market.
Additionally, a free trade agreement would have a cascading effect: it would strengthen Brazil’s image with other G7 countries, creating more trust and breaking down barriers for new agreements.
Return Of Canada To Brazil’s Radar
The return of Canada to Brazil’s radar in 2025 shows that the beef landscape is far from being defined solely by Washington or Beijing.
By negotiating with Ottawa, Brasília opens up the possibility of a billion-dollar route free of tariffs, able to reposition the country in global trade.
Amid political challenges, internal resistances, and geopolitical disputes, one thing is certain: if the agreement comes to fruition, Brazil will not only gain a new market but also demonstrate to the world that it can dictate its own destiny in the era of multipolarity.
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