Sawt Falasteen - Lula says Mercosur, Japan to discuss trade deal

"I expect to launch negotiations for an agreement with Japan during Brazil's presidency of Mercosur the next semester," Lula told reporters in a joint news conference with Japanese Prime Minister Shigeru Ishiba in Tokyo.

Earlier Lula portrayed such an agreement as a way for the two economies to boost trade in the face of growing protectionism under US President Donald Trump.

"Our countries have more to gain from integration than from protectionist practices," he said at an economic forum attended by business and political figures from Brazil and Japan.

"We cannot go back to relying on protectionism. We do not want a second Cold War," Lula said.

"We want free trade so that we can ensure that democracy, economic growth and wealth distribution become established in our countries," he added.

Four Mercosur members -- Argentina, Brazil, Paraguay and Uruguay -- in December struck a free-trade deal with the European Union although it still faces hurdles before final approval.

Business groups in Japan, the world's fourth-largest economy, have been pressing the government also to strike an agreement with the South American bloc.

The Keidanren business federation "urgently" called in November for "expedited efforts" towards a deal calling the potential benefits "immense".

But an agreement may be politically hard because of fears about the impact on Japanese farmers of large-scale agricultural imports, particularly from Brazil and Argentina.

Ishiba told the joint news conference that Japan and Brazil would "soon" set up a Japan-Mercosur strategic partnership.

"We agreed that... we will promote discussions with a view to deepening our trade relationships under that framework," Ishiba said.

"As the international community's division deepens, our cooperation with Brazil -- our partner to lead the global society into harmony -- is essential," he said.

Lula, 79, arrived in Japan on Monday accompanied by a 100-strong business delegation. On Tuesday he was given a full state dinner with the Japanese emperor.

Lula and Ishiba, 68, were also expected to discuss the joint development of biofuels ahead of November's COP30 UN climate summit in the Brazilian Amazon.

"By taking advantage of our mutual strengths -- Brazil's biofuel and Japan's high-quality mobility -- we agreed that we will lead decarbonisation efforts in the world's auto industry," Ishiba said.

"The recent decision to increase the use of biofuels in transport and aviation in Japan opens up space to work together on the energy transition," said Lula.

"Decarbonisation is a path of no return and is perfectly compatible with the objective of energy security."

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T.Ibrahim--SF-PST