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Across an ocean of possibilities: Russia is ready for free trade negotiations with Latin America
The plans of the Eurasian Economic Union extend far beyond the region. One of the most promising areas today is Latin America. Russia, as a member of the EAEU, is ready to discuss the creation of a free trade zone with the largest association in this region, MERCOSUR, Izvestia found out. The ambitious project can not only improve the conditions for the promotion of Russian goods to the huge Latin American market, but also reduce the prices of imported goods for residents of all EAEU countries. However, experts warn of serious logistical barriers and pressure from the United States on the countries of the region. About when and under what conditions it will be possible to establish interoceanic business cooperation is in the material of Izvestia.
Which countries is the Russian Federation ready to negotiate a free trade area with?
Russia has repeatedly demonstrated its interest in expanding free trade through the EAEU, and not only with the countries of the region. For the five member states of the union — and besides the Russian Federation, the union includes Armenia, Belarus, Kazakhstan and Kyrgyzstan — there are prospects for cooperation, for example, in Latin America. Back in the late 2010s, such discussions were conducted with the Peruvian authorities. In 2015, in Lima, the EEC Minister Tatiana Valovaya and representatives of the Latin American government signed a Memorandum of Understanding. And in 2024, Deputy Prime Minister Alexei Overchuk, after meeting with the then Peruvian Prime Minister Gustavo Andreansen Olaya, did not rule out the possibility of starting a dialogue on the creation of a free trade area.
Russia is assessing the possible prospects for negotiations with the region's largest economic bloc, MERCOSUR, Alexey Overchuk told Izvestia. Currently, this association includes Argentina, Bolivia, Brazil, Paraguay and Uruguay.
— On the one hand, we need to analyze how mutually beneficial this will be. On the other hand, there is a certain negotiating resource that is currently aimed at other countries," he said. — But we are always open to such a dialogue and, of course, we are interested in expanding opportunities for the EAEU economies.
It is not easy to implement such a large-scale project. One of the main problems on the way to creating a free trade area with MERCOSUR is logistics, experts say. First of all, you need to understand that countries are located at a great distance from each other, which is why transportation costs are increasing. Sanctions will interfere with transporting goods through European ports in the Atlantic, Viktor Kheifets, professor at the Faculty of International Relations at St. Petersburg State University, said in a conversation with Izvestia. But there is another option: to use the Pacific routes.
However, costs may also arise here: it is much more expensive to transport goods to Vladivostok and then by ship across the Pacific Ocean than to ship them through the ports of the Baltic, the Black Sea or Murmansk. In addition, the logistics capacities of the Far East are quite heavily loaded due to the reorientation of the Russian economy in recent years.
"Next, you will need to pass through either the Panama Canal or the Strait of Magellan, which also implies certain obstacles,— Viktor Kheifets continued.
The Panama Canal, after China left there, is, in fact, controlled by the United States, said Andrei Pyatakov, a leading researcher at the ILA RAS.
Changkai Port in Peru
On the other hand, China, for example, has the Chankai megaport in Peru. Beijing intends to connect it with a future railway line that will run from the Pacific to the Atlantic coast of South America. This is part of the global New Silk Road project, which could be an alternative to the Panama Canal. Given the level of relations between Moscow and Beijing, this opens up additional opportunities for the Russian Federation in the future.
The United States, given its new strategy, will put pressure on Latin American countries to counteract competition for American goods in the region. On the other hand, Latin American countries are unlikely to want to become completely dependent on cooperation only with Americans. And free trade with the EAEU will allow them to reduce the level of such dependence.
In 2018, the Eurasian Economic Commission (EEC) and MERCOSUR have already signed a memorandum of cooperation on trade and economic issues. Further prospects can be discussed on large international platforms. For example, within the framework of the BRICS, where Brazil and Russia are the largest economies in their regions (Russia is at purchasing power parity).
Moreover, MERCOSUR already has the experience of a large-scale agreement with a similar economic bloc. On January 17, in Paraguay, Latin American countries signed an agreement on the creation of a free trade area with the European Union. In 2024, according to Eurostat, the mutual trade turnover between them amounted to more than 110 billion euros, and after signing the agreement, it may increase by almost 60 billion euros. At the same time, the existence of this document is unlikely to interfere with the future interaction of MERCOSUR with the EAEU. For example, the recent free trade agreement between the EU and India does not affect similar negotiations between New Delhi and the EAEU, the Ministry of Economic Development emphasized to Izvestia.
How will the FTA agreements affect the Russian economy
As you know, the free trade zone allows you to reduce trade duties on the movement of goods between states. Countries are interested in expanding their income generation opportunities through access to new export markets. Due to the reduction of duties and other non-tariff barriers, a favorable atmosphere is created for manufacturers and other business partners operating in this economic zone.
According to various estimates, the volume of mutual trade between the EAEU and MERCOSUR now stands at about $14 billion. Russia is already the fourth largest importer of the association, behind China, the United States and the EU.
Latin American countries (primarily Brazil) mainly supply coffee and soy, beef and poultry products to Russia, and receive fertilizers for agriculture, diesel fuel and ferrous metals. Promising areas could be so—called value-added goods - that is, not raw materials. Experts have no doubt that the creation of the FTA will lead to a tangible breakthrough in this area.
— If signed, such an agreement will help diversify bilateral interregional economic ties. Even its initiation will mean a serious shift in relations between Russia and Latin America, as MERCOSUR is the largest trading actor in the region," Andrey Pyatakov tells Izvestia.
By reducing costs, Latin American businesses can reduce the prices of goods, such as beef or coffee, which would be a positive development for consumers in the EAEU countries.
It is also important that Russia has accumulated some experience in creating and developing free trade zones. To date, the EAEU has signed similar agreements with Vietnam, Iran, Serbia, the United Arab Emirates, Mongolia and Indonesia. It was possible to sign agreements with the last three countries in 2025 alone, which indicates the serious interest of the Russian Federation in this direction. Work is currently underway to ratify these agreements.
There are certain intermediate results. For example, as a result of the liberalization of the trade regime with Indonesia, the trade rate for EAEU goods decreased fivefold — from 10% to 2%, and in the next 3-5 years the trade turnover may double, reported the Minister of Trade of the EEC Andrey Slepnev.
The creation of a free trade area with new countries remains a priority in international politics, Russian President Vladimir Putin noted earlier. And although there have been no official public statements by the leaders of MERCOSUR about their intention to start negotiations with the EAEU, it is possible that strengthening ties between the countries of the associations will sooner or later play a role. For example, a Russian delegation led by Russian Prime Minister Mikhail Mishustin recently paid a visit to Brazil. It is possible that in the future, Moscow's relations with this state will be brought to a new level.
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