Jakarta. Indonesia is itching to start the first round of negotiations with the Brazil-led Mercosur as the talks remain in limbo for years.

Mercosur brings together Brazil, Argentina, Paraguay, Uruguay, and its most recent member Bolivia. In late 2021, Indonesia agreed to negotiate a trade pact with the South American bloc. Both sides even met to discuss the negotiation framework a few months later. Almost four years have passed, but the first round of the agreement has yet to come to fruition.

Trade Minister Budi Santoso recently nudged Uruguay into beginning the negotiations when its deputy foreign minister, Valeria Csukasi, visited Jakarta.

“Indonesia emphasizes the importance of strengthening trade ties with Uruguay and Mercosur as a joint effort towards a mutually beneficial trade agreement," Budi told Csukasi, as quoted by a ministerial statement.

Jakarta also blamed the sluggish negotiations on Mercosur members having “internal differences on international trade priorities”, without going into more details.

According to the press statement, Csukasi responded by saying that an Indonesia-Uruguay cooperation could be one way to boost trade if the Mercosur negotiations could not begin.

A foreign ministry official later told The Jakarta Globe that efforts to initiate negotiations are underway.

"We are currently discussing the negotiation plan for the first round. We are still in the early stages of drafting the terms of reference, including whether the agreement will be incremental or not,” Epiphania Riris Wusananingdyah, a director at the Foreign Ministry, told a news conference on Thursday.

When Brazil's President Lula da Silva hosted Prabowo Subianto in Brasilia a few months ago, they agreed to explore a Mercosur-Indonesia trade accord. The leaders were open to a comprehensive economic partnership agreement or CEPA-level pact, meaning that it would likely cover business cooperation beyond goods trade. 

Countries may choose to negotiate the terms in phases, starting with tariff cuts in goods trade before it eventually expands to scrapping barriers related to trade in services and investment. This is what Epiphania meant by "incremental".

Brazil is the Mercosur member with whom Indonesia mainly does business, as bilateral trade topped $7.1 billion in 2024. But the partnership sees Indonesia mostly importing Brazilian goods, causing a trade gap of nearly $3.7 billion that year. Indonesia’s trade with Uruguay reached only $65.9 million last year, but the Southeast Asian economy enjoyed a $33.7 million surplus, official statistics showed. Estimates by the Indonesian trade office placed Mercosur’s combined gross domestic product (GDP) at around $2.6 trillion as of 2023.

In 2023, senior Indonesian diplomat Nidya Kartikasari admitted that Mercosur wished to postpone the talks until it took care of its overdue pact with the European Union (EU), which dates back 25 years ago. Nidya also told the Globe that Uruguay's interest in a separate trade bloc, the CPTPP, had caused discord within Mercosur.

Fast forward to early September 2025, the European Commission finally proposed the Mercosur pact for ratification, but the document needs the consent of 15 of 27 members. Bolivia had only officially joined Mercosur in 2024, hence excluded from the EU pact. 

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