The United Arab Emirates is pursuing a comprehensive trade agreement with Mercosur, the South American economic alliance, as part of a broader push to deepen commercial ties beyond its traditional markets. The UAE's Minister of Foreign Trade presented the proposal at the Mercosur Summit in Asunción, Paraguay, speaking on behalf of the UAE President and framing the pact as a priority for the country's economic diplomacy.

The proposed Comprehensive Economic Partnership Agreement, or CEPA, would formalise a trading relationship that has already gathered pace. Non-oil trade between the UAE and Mercosur nations reached $6.2 billion in 2025, a figure officials point to as evidence that the two regions have built genuine commercial momentum ahead of any formal accord. That volume of trade, generated without a dedicated agreement in place, has been used by UAE negotiators to argue that a CEPA would unlock considerably more activity once tariff and regulatory barriers are addressed.

Mercosur, which groups Argentina, Brazil, Paraguay and Uruguay as full members, has historically negotiated trade terms as a bloc rather than through bilateral deals with individual member states. This has made past negotiations with outside partners slow and, at times, contentious. The UAE's approach reflects its wider CEPA strategy, under which it has already signed agreements with countries including India, Indonesia and Israel, and pursued deals with several African and Asian economies since 2021.

At the summit, discussions centred on a handful of sectors where officials believe the two regions have complementary strengths. Logistics featured prominently, given the UAE's position as a shipping and aviation hub connecting Asia, Africa and Europe. Food security was also raised, with Mercosur countries among the world's largest exporters of grain, beef and soybeans, and the UAE reliant on imports to meet domestic consumption. Officials also discussed cooperation in future technologies and clean energy, areas where the UAE has invested heavily in recent years through state-backed firms such as Masdar.

The minister told delegates that open markets and stronger international alliances were necessary tools for governments navigating a period of economic and geopolitical uncertainty. Trade routes have come under strain from conflicts in the Middle East and Eastern Europe, alongside shifting tariff policies among major economies including the United States and China. Diversifying export markets and securing alternative supply chains, the minister argued, would help insulate both regions from these pressures.

Beyond the economic proposals, the summit included formal diplomatic exchanges. The UAE's Minister of Foreign Trade conveyed greetings from the UAE President to the heads of state present, a gesture consistent with the country's practice of pairing trade negotiations with high-level political engagement. Paraguay's government, which held the rotating Mercosur presidency at the time of the summit, welcomed the UAE's interest as part of its own efforts to attract investment from Gulf states.

The Asunción summit forms part of a longer pattern in UAE foreign policy, under which the country has sought to position itself as a connector between emerging markets in Asia, Africa and Latin America. Since launching its CEPA programme, the UAE has set a target of reaching $1 trillion in non-oil trade by 2031, and officials have repeatedly cited Latin America as an underexploited region in that plan.

No timeline was given for the conclusion of formal CEPA negotiations with Mercosur, and any agreement would still require ratification by all four full member states, a process that has slowed previous Mercosur trade talks with other partners, including the European Union. UAE officials indicated that further technical discussions would follow in the coming months, with a working group expected to be established to scope the terms of a potential deal.

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