Topping the list of Mercosur’s most likely new trade pacts next year are deals with the European Free Trade Association of four non-EU nations and with the United Arab Emirates, the diplomats said on condition of anonymity.

Singapore also reached an agreement with Mercosur this year that is being translated so it can be sent to the country’s president and lawmakers for ratification, a diplomat said.

“This is undoubtedly a good time for the Mercosur bloc to move forward with other negotiations. Some countries have already approached us interested in expanding negotiations,” a Brazilian official said.

If the pacts materialize, they would mark a revival for the trade bloc. Mercosur includes South America’s two largest economies, Brazil and Argentina, but has long suffered from internal divisions and skepticism about its effectiveness. Uruguay and Paraguay are also founding members of Mercosur, which Bolivia joined this year.

Norway, one of the non-EU members that is part of the EFTA group, confirmed it is keen to sign an EFTA-Mercosur deal in the first half of 2025.

“A Free Trade Agreement between Mercosur and the EFTA states is a high priority for Norway. I hope to see the negotiations concluded as soon as possible,” Norwegian Minister of Trade and Industry, Cecilie Myrseth, said in a message to Reuters.

“With the trade talks between EU and Mercosur now concluded, it should be possible for EFTA and Mercosur to shortly come to an agreement on the very few outstanding issues,” she added.

For its part, UAE hopes to deepen commerce with the Mercosur bloc “within the next year” with an agreement that would open opportunities for businesses across the Middle East and Latin America, its Trade Minister Thani Al Zeyoudi said in a statement to Reuters.

Threat of Trump tariffs

Threats of fresh tariffs from Trump, who takes office in a month’s time, have also forced the biggest U.S. trade partners to consider their alternatives, even as their priority is defending the U.S.-Mexico-Canada Agreement on trade.

Although Mexico expects a successful review of the USMCA in 2026, it has also begun to explore other options, which include deepening its trade agreement with Mercosur, according to two Mexican government sources.

“In an increasingly divided world where protectionism is gaining strength, President Claudia Sheinbaum wants a more integrated Mexico that can face what is coming,” said one of the sources. “Therefore, the task is to diversify investment, trade and relations as a whole,” they added.

The Mexican presidency and Economy Ministry did not immediately respond to requests for comment.

A Mercosur official said there are also discussions underway for a trade deal with Canada. However, a Canadian diplomat said the focus on USMCA talks may mean other talks have to wait.

“We will be so busy dealing with Trump that our negotiators won’t have time to negotiate with Mercosur,” a Canadian diplomat said.

A spokesperson for Canada’s Global Affairs Ministry said the last round of talks with Mercosur was held in 2019 and “no further rounds are currently scheduled.”

Talks are already underway between Mercosur and South Korea, Vietnam, Indonesia and Lebanon, Brazil’s Foreign Ministry said. Those countries’ embassies in Brasilia did not reply to a request for comment.

“There are other trade partners we want to talk to, especially in Asia,” said another official in Brasilia.

In some cases, talks have hit against resistance from farm lobbies in other countries wary of competing with agricultural powerhouses Brazil and Argentina, a Brazilian diplomat acknowledged.

— Additional reporting by Diego Ore in Mexico City and Nicolas Misculin in Buenos Aires

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The decision by Justice Andre Mendonca, an Evangelical pastor who was appointed in 2021 by far-right former President Jair Bolsonaro, represents a setback for the rights of Brazil’s roughly one million Indigenous people.

The proposal would impose a cutoff date for ancestral land claims. It has already been approved in the lower house and awaits a vote in a newly conservative Senate. If it passes Congress, all eyes would turn to leftist President Luiz Inacio Lula da Silva, who has the power of veto.

Lula has staked his global reputation on protecting Indigenous rights and preserving the environment, but he is also increasingly reliant on the ag sector to drive domestic growth.

The landmark case in front of the Supreme Court involves a claim by the Xokleng people of southern Santa Catarina state, whose land was bought decades ago by farmers of European descent. The Xokleng say they have an ancestral right to the land, while the farmers argue they are rightful owners.

Any ruling would set legal jurisprudence for hundreds of other land disputes.

Indigenous groups, including members of the Xokleng community, protested outside the Supreme Court in Brasilia on Wednesday. Other Indigenous protesters blocked a major highway outside Sao Paulo.

Brazil’s farm sector is also backing a bill in Congress that would set into law a cutoff date for land claims in 1988, the year Brazil’s current Constitution was enacted. Any Indigenous community that did not occupy their lands by that date would not be allowed to claim them, according to the proposed legislation.

Indigenous leaders say that violates the Constitution that guarantees their people the right to claim ancestral lands. They argue that in many cases, Indigenous groups had been expelled from their land by settlers and no longer occupied them in 1988.

The hearing follows a setback for Indigenous people last week in Congress when the lower chamber passed the bill that limited the recognition of new Indigenous reservations.

— Anthony Boadle is a Reuters political correspondent in Brasilia.

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French President Emmanuel Macron and United Nations Secretary General Antonio Guterres both took to Twitter to express their concern about the fires which have reached a record number this year, devastating vast swathes of forest considered a vital bulwark against climate change.

Bolsonaro responded angrily to what he regarded as meddling.

“These countries that send money here, they don’t send it out of charity… They send it with the aim of interfering with our sovereignty,” he said in a Facebook Live broadcast.

However, earlier on Thursday, he said that Brazil alone lacked the resources to control the fires.

“The Amazon is bigger than Europe, how will you fight criminal fires in such an area?,” he asked reporters as he left the presidential residence. “We do not have the resources for that.”

Fires in the Amazon have surged 83 per cent so far this year compared with the same period a year earlier, government figures show.

Although fires are a regular and natural occurrence during the dry season at this time of year, environmentalists blamed the sharp rise on farmers setting the forest alight to clear land for pasture.

In that, they may have had at least tacit encouragement from the firebrand right-wing president, who took power in January. Bolsonaro has repeatedly said he believes Brazil should open the Amazon up to business interests, to allow mining, agricultural and logging companies to exploit its natural resources.

On Wednesday, he blamed non-governmental organizations for setting the fires, without providing evidence, but appeared to row back on Thursday, when he said for the first time that farmers could be behind them.

‘International crisis’

Macron took to Twitter to call the Amazon fires an “international crisis” that should be discussed by the G7 summit that will begin on Saturday in Biarritz, France. The Group of Seven rich countries does not include Brazil.

Guterres said he was “deeply concerned” by the fires, adding “we cannot afford more damage to a major source of oxygen and biodiversity.”

Federal prosecutors in Brazil said they were investigating a spike in deforestation and wildfires raging in the Amazon state of Para to determine whether there has been reduced monitoring and enforcement of environmental protections.

Prosecutors said they would look into an ad that they said was published in a local newspaper encouraging farmers to participate in a “Fire Day,” in which they would burn large areas of forest “to show Bolsonaro their willingness to work.”

Brazil is facing growing international criticism over its handling of the Amazon, 60 per cent of which lies in the country.

Earlier this month, Norway and Germany suspended funding for projects to curb deforestation in Brazil after becoming alarmed by changes to the way projects were selected under Bolsonaro.

At the time, when asked about the loss of German funding, Bolsonaro said, “Brazil does not need that.”

Others were less sanguine.

Brazil’s lower house speaker, Rodrigo Maia, said on Twitter he would create “an external committee” to monitor the burning of the rainforest. He also vowed to form a group “to evaluate the situation and propose solutions to the government.”

The Bishops Conference for Latin America expressed concern about the “tragedy,” and on Thursday called on countries to take immediate action to protect the rainforest and nearby communities.

“We urge the governments of the Amazon countries, especially Brazil and Bolivia, the United Nations and the international community to take serious measures to save the world’s lungs,” it said.

Wildfires are also raging in Bolivia, where officials estimate that an area the size of Delaware has burned in recent days.

— Reporting by Eduardo Simoes, Stephen Eisenhammer and Gabriel Araujo in Sao Paulo, Anthony Boadle and Ricardo Brito in Brasilia and Mitra Taj in Lima.

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Farmers form a key base of support for right-wing firebrand Bolsonaro who since taking office Jan. 1 has placed pro-agribusiness policies at the center of his agenda. Activists warn his government’s positions would strip away protections for the environment, the Amazon rainforest and indigenous peoples.

Reservation land covering roughly 12 per cent of Brazil’s territory is currently off limits for commercial farming.

“They could plant there … and maybe have income for their community,” Dias told reporters. “They cannot do this today. That needs to be changed in Congress.”

Reservations should still be required to preserve a minimum percentage of native vegetation, as all farmers currently are, she said.

Bolsonaro has given control over indigenous land designations to the agriculture ministry, after arguing on the campaign trail that no new indigenous reservations should be created. But Dias struck a more moderate tone, saying Bolsonaro did not favour new reservations in areas that have long been settled by farmers.

“Small farmers that have been there 50 years and have deeds issued by the state or federal government, if you kick them out, there aren’t conditions there for indigenous people to hunt and fish and have their lives,” she said in a press briefing.

“When the president says he doesn’t want more demarcations, he’s talking about this type of contested areas.”

But the Amazon deserves completely different treatment, and tribes with little contact with the outside world should be protected, she said, a position that is shared by Brazil’s new rights minister who will be responsible for indigenous affairs.

Bolsonaro has suggested Brazil may exit the Paris Agreement on climate change and appointed a foreign minister who calls global warming a leftist fabrication. But Dias said she is fine with staying in the accord, as the country is on track to meet its climate change goals.

As for a campaign promise to end the “industry” of environmental fines, Dias told Reuters prior to the briefing that Brazil must end “indiscriminate” fines levied by multiple agencies without working with the farmers to resolve misunderstandings.

— Reporting for Reuters by Jake Spring and Anthony Boadle.

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Nabhan Garcia, land issues secretary at the ministry, said the government must convince the National Congress to change the law to more stringently deal with such invasions and give police broader autonomy to act against invaders.

“It is the challenge of this government to demonstrate to Congress that this is a thing very close to terrorism, or it could be said in some circumstances is terrorism, and to have a more severe application of the law,” Garcia told reporters.

Farmers have formed a key support base that helped Bolsonaro win the presidency, with a list of producer-friendly policies are now at the center of his agenda after he assumed office Jan. 1.

Garcia founded the far-right group UDR that is militantly opposed to land invasions. His newly created secretariat of land issues consolidates previously disparate powers over rural land reform and demarcation of indigenous territory under the agriculture ministry.

Garcia made the remarks in response to a land invasion in the northern state of Para, the first incident under Bolsonaro’s presidency, noting that hundreds of such invasions are underway around the country.

The landless workers movement MST behind many of these invasions was a major supporter of former leftist President Luiz Inacio Lula da Silva.

Many landless workers’ movements seek to take over properties in the name of social and economic justice to more equally distribute rural wealth, but farmers argue this flies in the face of the country’s property laws.

Garcia favours land reform initiatives already in place that redistribute land classified as “unproductive” to the rural poor. But he said laws must be respected and invasions by force would not be tolerated.

Watchdog groups say that police, often under the sway of powerful local landowners, frequently get away with bloodshed against landless activists.

While campaigning in Para last year, Bolsonaro strongly defended the police, saying they shot and killed 19 activists in a bloody episode in 1996 because they feared for their lives.

Also on Monday, Garcia offered the government’s support to foreign investors interested in buying land in Brazil, a prohibited practice that would require legalization by Congress.

— Reporting for Reuters by Jake Spring and Anthony Boadle; additional reporting by Brad Brooks.

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The temporary decree, which will expire unless it is ratified within 120 days by Congress, strips power over land claim decisions from indigenous affairs agency FUNAI.

It says the agriculture ministry will now be responsible for “identification, delimitation, demarcation and registration of lands traditionally occupied by indigenous people.”

The move stoked concern among environmentalists and rights groups that the far-right new president, who took office on Tuesday, will open up the vast Amazon rainforest and other ecologically sensitive areas of Brazil to greater commercial exploitation.

The executive order also moves the Brazilian Forestry Service, which promotes the sustainable use of forests and is currently linked to the environment ministry, under agriculture ministry control.

Additionally, the decree states that the agriculture ministry will be in charge of the management of public forests.

Bolsonaro, who enjoys strong support from Brazil’s powerful agribusiness sector, said during his campaign he was considering such a move, arguing that protected lands should be opened to commercial activities.

Brazil’s 900,000 indigenous people make up less than one per cent of the population, but live on lands that stretch for 264 million acres, or 12.5 per cent of the national territory.

“Less than a million people live in these isolated places in Brazil, where they are exploited and manipulated by NGOs,” Bolsonaro tweeted, referring to non-profit groups. “Let us together integrate these citizens and value all Brazilians.”

Critics say Bolsonaro’s plan to open indigenous reservations to commercial activity will destroy native cultures and languages by integrating the tribes into Brazilian society.

Environmentalists say the native peoples are the last custodians of the Amazon, which is the world’s largest rainforest and is vital for climate stability.

After she was sworn in on Wednesday, new Agriculture Minister Tereza Cristina Dias defended the farm sector from accusations it has grown at the expense of the environment, adding that the strength of Brazil’s farmers had generated “unfounded accusations” from unnamed international groups.

Dias used to be the head of the farm caucus in Brazil’s Congress, which has long pushed for an end to land measures that it argues hold back the agricultural sector.

“Brazil is a country with extremely advanced environmental legislation and is more than able to preserve its native forests,” Dias said. “Our country is a model to be followed, never a transgressor to be punished.”

In comments to reporters after her speech, she said that decisions over land rights disputes were a new responsibility for the agriculture ministry. However, she indicated that in practice, the demarcation of land limits would fall to a council of ministries, without giving further details.

Good news for farmers

Bartolomeu Braz, the president of the national chapter of Aprosoja, a major grain growers association, cheered Wednesday’s move to transfer indigenous land demarcation to the Agriculture Ministry.

“The new rules will be interesting to the farmers and the Indians, some of whom are already producing soybeans. The Indians want to be productive too,” he added.

Three-time presidential candidate and former environment minister Marina Silva, who was beaten by Bolsonaro in October’s election, reacted with horror to the move.

“Bolsonaro has begun his government in the worst possible way,” she wrote on Twitter.

Dinama Tuxa, a member of Brazil’s Association of Indigenous Peoples, said many isolated communities viewed Bolsonaro’s administration with fear.

“We are very afraid because Bolsonaro is attacking indigenous policies, rolling back environmental protections, authorizing the invasion of indigenous territories and endorsing violence against indigenous peoples,” said Tuxa.

Under the new plan, FUNAI will be moved into a new ministry for family, women and human rights.

A former army captain and longtime member of Congress, Bolsonaro said at his inauguration on Tuesday that he had freed the country from “socialism and political correctness.”

An admirer of Donald Trump, Bolsonaro has suggested he will follow the U.S. president’s lead and pull out of the Paris climate change accord.

In addition to the indigenous lands decree, the new administration issued decrees affecting the economy and society on Wednesday, while forging closer ties with the United States.

— Reporting for Reuters by Stefani Inouye, Carolina Mandl, Anthony Boadle, Ana Mano and Gabriel Stargardter.

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The accusation comes even as JBS and other meatpackers in Brazil, the top global exporter of beef, are reeling from a corruption scandal. Police allege bribery of health inspectors to overlook unsanitary conditions and forgo inspections. JBS has denied wrongdoing and sought to assure consumers that its products meet rigorous quality standards.

Earlier this month, the environmental agency, IBAMA, ordered the suspension of two JBS meat packing plants and 13 others in southwest Para state for buying cattle raised on pastures cleared by slashing and burning the forest. It fined the company 24 million reais (C$10.25 million).

JBS denied purchasing livestock from ranchers on land blacklisted by IBAMA and won an injunction from a federal judge allowing its plants to continue buying cattle. The agency is appealing the ruling.

Brazilian authorities have long said cattle ranching is responsible for more destruction of the Amazon than any other activity. The world’s largest rainforest is considered one of the best natural defenses against global warming.

JBS is the only major Brazilian meatpacker involved in both the inspection scandal and the rainforest protection probe. IBAMA said no other big meatpackers are targeted in its Amazon operation.

IBAMA said JBS bought 49,438 illegal cattle between 2013 and 2016, half of those directly from embargoed pastures and the remainder by three-way “laundering” transactions to disguise the source.

“They knew what they were doing,” said Hindemberg Cruz, IBAMA’s executive manager in Maraba, a badly deforested area of Para. “We confirmed this was happening in 2013 and it continues to happen in 2016.” Cruz spoke to Reuters by phone from Marabá this week.

In its latest operation, IBAMA said 84 per cent of the animals detected as coming from deforested lands were bought by JBS.

In an emailed statement, JBS said it had no way of knowing where cattle were raised when supplied by a legal rancher who may have bought the herd from an embargoed ranch.

Emails exchanged in 2014 between deforestation researchers and a JBS executive, reviewed by Reuters, showed the company knew such cattle purchases were a problem for the industry despite a self-policing commitment JBS and other firms made in 2009.

In the exchange with JBS director of sustainability Marcio Nappo, researcher Daniela Alarcon asked if the company was aware it was buying cattle raised on blacklisted land but later moved to clean pastures. The problem, Nappo replied, “is structural and goes beyond the ability of one single company to resolve.”

Mauricio Torres, an environmentalist who teaches at the Federal University of Western Para, said the emails showed JBS took advantage of the “laundering” of herds, which has become a common practice in the Amazon.

JBS said in an email sent to Reuters this week that any supplier found not to comply with JBS’s strict standards was blocked and became ineligible to sell livestock to the company.

“JBS does not currently purchase and has not purchased any animals from the suppliers on the list of areas embargoed by IBAMA,” it said.

The company said it did not have access to the government’s system for tracking animals, and called for more readily available information on blacklisted deforested areas.

Cruz, however, said this information was easily accessible on the internet.

Brazil adopted self-policing measures following a spike in deforestation, when Greenpeace threatened to name meatpackers who bought cattle grazing on razed rainforest.

Publicly traded companies like JBS in 2009 began using the same satellite data the government utilizes to track rainforest clearings, which should allow them to see if a ranch shows signs of recent deforestation.

The measure helped bring about a drastic decrease in beef originating from deforested land. However, Amazon deforestation is rebounding from a record low in 2012.

IBAMA’s Cruz said the onus should be on the meat companies to check their livestock sources properly with modern technology available today and crosscheck with satellite imagery publicly posted on the agency’s website.

“They should be asking more questions,” Cruz said.

— Anthony Boadle is a senior political correspondent for Reuters in Brasilia. Additional reporting for Reuters by Lunae Parracho in Santarem and Paulo Prada in Rio de Janeiro.

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Temer’s centre-right government plans to send Congress a bill allowing 100 per cent foreign ownership of airlines, though investors will be obliged to help expand regional flight services, two sources said.

The government will soon propose a bill lifting a ban on foreign investors buying agricultural land in Brazil, on the condition that 10 per cent of any purchase is destined to land reform to benefit landless farmers and peasants, said a presidential aide who was not authorized to speak on the matter.

Temer last year vetoed an aviation bill that would have allowed full foreign ownership of local airlines in an agreement with senators who wanted inclusion of measures to boost regional aviation. The new draft will do just that.

“The initial idea is to reopen regional routes that were abandoned so that they get regular flights again,” a source with knowledge of transport policy said on condition of anonymity.

Foreign companies currently can hold up to a 20 per cent stake in Brazilian airlines. U.S. carrier Delta Air Lines Inc has 9.48 per cent of Gol Linhas Aereas Inteligentes SA , Brazil’s largest domestic airline.

Counting international routes, the main airline operating in Brazil is TAM, which merged with Santiago, Chile-based Latam Airlines Group SA to become Latin America’s largest carrier.

Two other carriers, Avianca Brasil and Azul Linhas Aereas, are controlled by foreign owners with Brazilian citizenship.

Attracting investors to buy into Brazilian airlines might not be easy due to jet fuel taxes and falling domestic traffic due to the recession. Despite huge market shares, Brazilian carriers have struggled to make a profit.

Plans to open up land to foreign purchases again, however, are bound to draw plenty of investors in Brazil’s expanding agribusiness industry that is seeking new partners.

Brazil restricted the sale of land to foreign investors in 2010 due to concerns that countries such as China could take control of large segments of arable land in the midst of a super commodity boom.

Companies in Brazil’s commodities sector have pushed to review the rules to allow more investment to flow into the country, especially in the pulp, paper and ethanol sectors.

— Reporting for Reuters by Anthony Boadle and Leonardo Goy. Additional reporting for Reuters by Lisandra Paraguassu, Alonso Soto, Maria Pia Sica Palermo and Daniel Flynn.

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