The Missing Bridge: Why Mercosur Needs an ASEAN Strategy

Opinion

Mercosur spent two decades negotiating with Europe and overlooked Southeast Asia. Brazil’s new ASEAN diplomacy shows what a real strategy could look like.

In March 2024, Brazil’s first dedicated ambassador to the Association of Southeast Asian Nations (ASEAN), Henrique Archanjo Ferraro, presented his letter of credence to the bloc’s Secretary-General in Jakarta. The ceremony drew little attention outside diplomatic circles. It should have drawn more.

Mercosur countries spent two decades negotiating the trade agreement with the European Union, which is causing more troubles than benefits, and possibly overlooked the opportunities represented by alternative markets across the Global South, such as ASEAN. It is important to outline that the current ASEAN member States (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam and, since October 2025, Timor-Leste) have a total population of about 684 million people and a combined GDP of US$3.9 trillion. These indicators suggest that South America should seriously engage ASEAN partners.

If we take the example of Brazil, it is to note that its engagement with ASEAN has historically been thin. In 2001, Fernando Henrique Cardoso made the first Brazilian presidential state visit to Indonesia — after his 1995 trip to Malaysia, the first by a Brazilian president to Southeast Asia. Nevertheless, Malaysia appears to be the ASEAN country with the highest interest in exchanges with Brazil.

Diplomatic relations date to 1959; Malaysia opened its embassy in Brasília in 1981, being its first resident mission in Latin America. Bilateral trade reached US$4.4 billion in 2024, making Brazil Malaysia’s largest trading partner in South America, according to figures shared by the Trade Office of the Embassy of Malaysia in Brazil. Furthermore, visa-free travel is now in place between the two countries. All of it points to what a genuine Mercosur–ASEAN relationship could look like.

From a substantial commercial standpoint, the complementarity of the economies of Mercosur and ASEAN is reflected in Brazil-Malaysia trade relations. Malaysia exports technology products, chemicals, and machinery to Brazil, due to the capacity of its ICT and e-commerce sectors, which contributed roughly 23.4% to Malaysia’s economy in 2024. Brazil, in turn, exports soybeans, beef, sugar, coffee, and iron ore, which are resources strategically important to almost all ASEAN economies.

Roughly 70% of Brazil’s poultry exports — and over half of its beef exports — are halal-certified, a structural advantage in a country like Malaysia, a majority-Muslim nation that functions as a regional halal-certification hub. Add a second layer: Malaysia’s semiconductor manufacturing capacity is increasingly framed as a potential input into Brazil’s own reindustrialization push under President Lula.

And the relationship runs in both directions on capital, not just goods. Brazil’s top mining company, Vale, operates in the Malaysian State of Perak. At the same time, Malaysia’s state energy firm Petronas has an established presence in Brazil, aiming to expand toward the fuel distribution sector.

The diplomatic conditions for scaling this up are more favorable than at any point in the past decade. Lula’s foreign policy has explicitly repositioned the Global South, and by extension Southeast Asia, as a strategic priority, a shift Malaysian officials say has been felt directly in Brasília’s posture toward ASEAN. Lula and Malaysian Prime Minister Anwar Ibrahim have built a personal rapport that now runs across three overlapping multilateral platforms: ASEAN, BRICS, and the G20.

Their practice of presidential diplomacy is exactly the sort of political capital that trade negotiators need and rarely get. It is also worth noting what did not happen: even during the Bolsonaro years, when Brazilian foreign policy became quite reluctant to South-South engagement, Itamaraty’s institutional channels kept the Malaysia relationship intact. In October 2025, Lula visited Kuala Lumpur for a bilateral State encounter followed by its participation in the ASEAN summit, celebrating the resounding US$37 billion trade volume between Brazil and the ASEAN bloc.

Scaling the Malaysia case to a full Mercosur-ASEAN trade framework holds an underlying logic at the bloc level. South America’s comparative advantage remains rooted in natural-resource abundance. It is not only about proteins, but also energy: oil and gas from Argentina and Brazil, and renewables from Paraguay, feeding a Southeast Asian region whose energy demand has been growing as a result of the energy disruptions caused by the Hormuz crisis.

ASEAN, meanwhile, offers Mercosur a path to diversify export markets and import sources beyond the traditional axes of the United States, the European Union, and China. None of this guarantees that a Mercosur-ASEAN agreement gets negotiated, let alone ratified. But Brazil, as Mercosur’s largest economy and now ASEAN’s newest diplomatic partner, is the obvious candidate to put the idea formally on the table.

The increasing diversification opportunities for South American exports point to the Global South as a natural outlook. For instance, Africa offers markets in need of agricultural products toward the persisting challenge of food security. ASEAN combines this same element with the addition of providing high-value-added technological products that, currently, can simply not be endogenously manufactured within the Mercosur countries.

Moreover, depending on the United States, the European Union, and China makes countries with a solid intent of autonomy, like Brazil, overly reliant on a reduced set of actors. While the Ricardian principle of comparative advantage explains the persistence of commodity specialization in South America, it should not lead to overlooking the strategic importance of diversifying export markets and international economic partnerships.

Comparative advantage explains why South American countries continue to specialize in sectors in which they are internationally competitive, such as agricultural goods and mineral resources. Yet such specialization does not inevitably translate into strategic dependency. Economically, dependency emerges when exports, investment, finance, and technology are concentrated in a limited number of partners capable of exercising political or economic coercion, as seen by the tariffs imposed by the second Trump administration on Brazil, for political reasons.

This dynamic illustrates what is termed as multipolar autonomy: a foreign-policy logic that widens the portfolio of partners available to a Global South country, thereby narrowing any single actor’s coercive leverage. Autonomy, understood this way, is not born from confrontation, but from diversification: the deliberate cultivation of alternative markets, investors, and diplomatic channels across the Global South.

For Brazil, and for Mercosur more broadly, an ASEAN strategy would be a textbook application of that logic: not a rejection of ties with the Global North, but an insurance policy against depending on it too heavily.