Brazil, Latin America’s largest economy, maintains high tariff and non-tariff barriers but has shifted toward open trade policies since President Lula’s 2023 inauguration. While the Trump administration’s trade disruptions accelerated this shift, Brazil’s diversification reflects deeper structural imperatives driven by three core motivations:

First, reducing trade concentration with specific partners to mitigate risks amid rising global protectionism. Second, overcoming premature deindustrialization through industrial cooperation. Brazil deindustrialized at income levels far below advanced economies, prompting Lula’s New Industrial Policy (NIB) to revitalize manufacturing. Trade agreements serve as institutional frameworks for technology transfer, investment attraction, and supply chain integration beyond market access. Third, expanding multilateral trade to secure strategic autonomy, reducing dependence on major powers while strengthening Brazil’s negotiating position within the U.S.-China bipolar structure.

Following these priorities, Brazil concluded agreements with the EU (December 2024) and signed FTA with EFTA (September 2025). Also Brazil conduct various industrial cooperation with European countries. Analysis of these trade agreements and industrial cooperation reveals key characteristics:

Brazil adopted sector-differentiated opening strategies, protecting strategic industries while liberalizing manufacturing to enhance competitiveness. Brazil secured policy autonomy for industrial tools including export tax authority, exclusion of the public health system (SUS) from procurement commitments, restricted bidding for innovation projects, and offset requirements. Services and investment followed positive-list approaches—fully opening manufacturing-related sectors while minimally opening strategic areas and preserving space for domestic preferences. The agreements introduced environmental norms linking trade to sustainability to promote cooperation in sustainable development. However, European agricultural protections through geographical indications and tariff-rate quotas may limit Brazil’s market opening benefits. In industrial cooperation, Brazil seeks to encompass technology transfer, joint development, local production, and workforce training beyond simple product supply.

Implications for Korea-Brazil relations include: Korea’s value as a diversification partner given Brazil’s high concentration with China and the EU; urgency to resume stalled TA negotiations during pro- diversification administrations like Lula’s; cooperation opportunities in NIB priority sectors, particularly critical minerals (Brazil holds all 10 Korean strategic minerals and ranks second globally in rare earths); balancing Brazil’s policy autonomy with opportunities for Korean companies rather than demanding unconditional liberalization; establishing long-term government cooperation platforms beyond past episodic efforts; and activating private sector cooperation through industry associations given the TA’s likely lengthy timeline.