SAO PAULO, June 16, 2026 (BSS/AFP) - Japan and Mercosur are set to negotiate a free trade agreement, Brasilia and Tokyo announced in a joint statement released by Brazil's foreign ministry Tuesday.

The announcement followed a meeting between Brazilian President Luiz Inacio Lula da Silva and Japanese Prime Minister Sanae Takaichi at the G7 summit in France.

Lula's government has advocated free trade between the South American bloc -- made up of Argentina, Brazil, Paraguay and Uruguay -- and external partners such as the European Union, which struck a deal with Mercosur in January.

"Based on the shared will of all parties, the two leaders announced the launch of negotiations on the Economic Partnership Agreement between Mercosur and Japan," the joint statement read.

Talks will begin at the Mercosur summit in Paraguay later this month.

Leftist Lula said he was "very pleased" at the prospect of a deal with Japan during his meeting with conservative Takaichi.

"I hope that at the next Mercosur meeting on June 30 we'll have good news," he added.

US President Donald Trump has been threatening to slap tariffs on export-dependent Brazil since last year.