Jakarta, August 9, 2026 – The Europe Today: Indonesia and Brazil are considering a preferential trade agreement (PTA) as an initial step toward strengthening bilateral economic relations and expanding market access between Southeast Asia and Latin America, Indonesia’s Trade Minister Budi Santoso has said.
Santoso discussed the proposal with Brazil’s Minister of Development, Industry, Trade and Services, Márcio Fernando Elias Rosa, in Jaipur, India, on August 7.
“We hope Brazil can help build consensus among Mercosur members and advance negotiations for the Indonesia-Mercosur PTA,” Santoso said on Sunday.
Indonesia proposed the PTA after negotiations on a broader Indonesia-Mercosur Comprehensive Economic Partnership Agreement made limited progress. Mercosur comprises Brazil, Argentina, Paraguay, Uruguay and Bolivia.
Santoso said differences among Mercosur members, including varying positions on trade cooperation with Indonesia, had affected negotiations on the broader agreement.
He said stronger trade relations between Indonesia and Brazil could significantly expand market access across both regions and create new opportunities for companies to increase exports.
According to Santoso, Brazil could serve as a gateway for Indonesian products into Latin American markets, while Indonesia could provide Brazilian exporters with greater access to the broader Asian market.
“Trade cooperation between Indonesia and Brazil benefits both nations and opens broader access to their respective regions,” he said.
Elias Rosa welcomed Indonesia’s proposal and expressed Brazil’s openness to further discussions on cooperation between Indonesia and Mercosur. Brazil will study the proposal, according to the Indonesian Trade Ministry.
Bilateral Trade Continues to Grow
Two-way trade between Indonesia and Brazil reached US$3.53 billion during the first six months of 2026, with Indonesia’s exports to Brazil amounting to US$1.17 billion, the Trade Ministry said.
For the whole of 2025, bilateral trade stood at approximately US$7 billion, while Indonesia’s exports to Brazil totaled US$2.21 billion.
Indonesia’s major exports to Brazil include animal and vegetable fats and oils, vehicles and automotive parts, electrical machinery, rubber products and mineral fuels.
Brazil’s leading exports to Indonesia include food-industry residues and waste, sugar and confectionery products, cotton, tobacco, and metal ores, slag and ash.
The proposed preferential trade agreement could provide a pragmatic pathway toward closer commercial relations while negotiations on the broader Indonesia-Mercosur agreement remain stalled.
For Indonesia, stronger economic ties with Brazil could help diversify export destinations and strengthen its presence in Latin America. At the same time, Brazilian businesses could gain wider access to Indonesia and other markets across Southeast Asia, potentially creating new opportunities for trade and investment between the two regions.
