By Lisandra Paraguassu and Lucinda Elliott
BRASILIA/MONTEVIDEO (Reuters) -Brazil is engaged in a "constructive dialogue" with Canada to resume negotiations for a free trade agreement between South America's Mercosur bloc and Ottawa, the Brazilian Foreign Trade Secretary said.
Canadian officials are due to visit Brazil in late August, according to Tatiana Prazeres, Brazil's Foreign Trade Secretary, who shared details of the visit in a written response to Reuters this week.
Canada signaled renewed interest
in restarting talks with Mercosur last month, as part of a broader push to diversify trade away from the United States amid uncertainty caused by tariffs imposed by U.S. President Donald Trump.
Sources from both Canada and Brazil told Reuters that Canada's International Trade Minister, Maninder Sidhu, is expected to travel to Brasilia on August 25.
Mercosur, which includes Brazil, Argentina, Uruguay and Paraguay, with Bolivia in the process of becoming a full member, is a major exporter of beef, soybeans and minerals.
Sidhu's visit "will be an opportunity to assess the conditions for a possible relaunching of negotiations," Prazeres said, although no formal date has been set to restart them, she added. Talks have been stalled since 2021 as South American countries focussed on local issues such as elections, before Trump's radical policy shifts reset the trade agenda.
Two senior diplomatic sources said formal negotiations could resume in late September or early October.
Bilateral trade between the U.S. and Canada totaled $727 billion last year while Canada's trade with Brazil - the biggest Mercosur economy - reached $9.1 billion, with Brazil posting a $3.5 billion surplus.
One source monitoring developments said both sides view the Mercosur-Canada agreement as relatively obstacle-free and expect negotiations to take about a year.
Prazeres said any formal restart of negotiations, including setting a timetable for talks, would depend on internal coordination within Mercosur.
"Mercosur is willing to evaluate the next steps," she said.
Uruguay's Foreign Ministry told Reuters that "no new steps" had been taken regarding Mercosur-Canada talks, but confirmed the agreement remains on the bloc's agenda.
Argentina's Foreign Ministry declined to comment.
(Reporting by Lisandra Paraguassu in Brasilia, Lucinda Elliott in Montevideo. Additional reporting by Maximilian Heath in Buenos Aires. Editing by Alexander Villegas and Toby Chopra)
