Canada and Mercosur miss their end-2026 target for a trade deal
The test By 31 Dec 2026, Canada and the Mercosur states have not announced the conclusion of negotiations on a Canada-Mercosur free trade agreement.
Not under way · Confidence: low · Reviewed 25 Oct 2026 · Scores from 1 to 10
This page answers: What could happen, how it is scored, and who is exposed?
Using this page
- Read the two scores: Likelihood and Impact are kept apart.
- Check what is happening, each fact with its source.
- Use the calendar for the dates to watch.
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Impact is the average of the four parts, rounded, plus one point when Canada is directly hit on two or more channels, up to 10.
Two separate scales from 1 to 10. Strature never multiplies or merges them.
What changed
Dated, newest first
- Lula was re-elected on 25 Oct 2026 on the TSE's count: with 100% of sections totalled, 51.79% of valid votes to 48.21% for Flávio Bolsonaro [15]
- Agencia Brasil reported Lula re-elected on the evening of 25 Oct 2026 [12]
- Itamaraty's press notes of 14 Aug-23 Oct 2026 include none on the Canada talks (titles read). [8]
- The Mercosur-EFTA agreement applies to Brazil-Iceland trade from 1 Oct 2026 and Brazil-Norway from 1 Nov 2026. [11]
Why it matters
Canada's foreign minister said on 14 Jul 2026 that Canada and Mercosur would aim to conclude talks ideally before the end of 2026. Earlier aims, a deal before September and completion by the end of June (as reported), have passed, a signing expected in September or October has not happened, and no new round was found after the tenth, in Toronto in May. A miss delays tariff cuts on C$19.4 billion of trade a year; it does not stop the talks.
Why Likelihood 6 Pushes: earlier aims (a deal before September; completion by end-June, as reported by Agência Brasil) lapsed; no round found after May; details and farm concerns open; no announcement signalled, with about two months left.
Why Impact 3 Threshold case: the deal slips into 2027. Deferred gains are not a sourced Canadian loss.
The other facts on file (8)
- Canada relaunched Mercosur talks in October 2025; Canada-Mercosur merchandise trade was C$19.4bn in 2025, exports C$5.1bn, imports C$14.3bn. [2] (1 Jun 2026)
- Global Affairs Canada lists fertiliser first among Canadian exports to Brazil and backs the Canada-Mercosur talks. [9] (30 Jun 2026)
- Officials told Reuters a deal could be concluded in 2026, one said before September; an Argentine official expected a signing in September or October. [3] (27 Mar 2026)
- The eighth round met in Brasilia on 23-27 Feb 2026; Minister Sidhu aimed for a deal by fall 2026. [4] (6 Apr 2026)
- A round on 27-30 Apr 2026 moved three chapters toward closing, with new meetings planned for May aimed at concluding. [13] (2 May 2026)
- The tenth round met in Toronto on 25-29 May 2026; five chapters moved to the closing stage; the joint note set no date for conclusion. [14] (1 Jun 2026)
- Agencia Brasil reported an aim of completing the talks by the end of June 2026. [6] (30 May 2026)
- On 14 Jul 2026 Anand set the aim of concluding ideally before the end of 2026; Vieira said details remained. [1] (14 Jul 2026)
Where it sits
Where this risk sits
Size shows Impact. Colour shows the Likelihood band. The two scores are never combined.
- Low 1–3
- Elevated 4–6
- High 7–8
- Severe 9–10
- Bigger circle: higher Impact
- Solid ring: under way
- Red ring: highest Impact on this map
- Where it starts
- Who it reaches
The risk on this map
- Canada and Mercosur miss their end-2026 target for a trade dealImpact 3 of 10, Low. Likelihood 6 of 10, Elevated. · Canada
How it spreads
By 31 Dec 2026, Canada and the Mercosur states have not announced the conclusion of negotiations on a Canada-Mercosur free trade agreement.
Not under wayChannels 4 on the card
- Canadian exportersMercosur tariffs on C$5.1bn of Canadian goods exported to Mercosur in 2025 [2] stay longer.
- DiversificationA hedge against US tariffs is delayed (Strature's view).
- CompetitionEU and EFTA exporters hold preferences in Mercosur meanwhile [10][11] (Strature's view).
- FarmingMore time to settle Canadian farm concerns [1].
Who is exposed
- Sectors
- Agriculture and food, Mining and metals, Autos
- Goods
- Urea and nitrogen fertilisers, Beef, Soybeans, Minerals
Three scenarios and their signposts
- S1
Year-end conclusion
Chief negotiators close the last chapters and announce a deal in December.
- S2
Slip into 2027
Talks continue past 31 Dec with a new target.
- S3
Stall
Farm or rules-of-origin issues freeze the talks for months.
| Path | Signpost |
|---|---|
| S1 | An eleventh round or a ministers' meeting announced in November |
| S2 | A joint statement naming a 2027 date |
| S3 | No round announced by March 2027 |
No probability is given for the three paths.
Dates to watch
The dates to watch
A dot is a day, a bar a month or a year; a hollow mark is tentative. The line marks today.
- 31 Dec 2026 Canada's stated target to conclude Canada-Mercosur talks [1] Tentative · Outside event
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Connected in Strature
- US tariffs and Canada
- Canada
- Brazil
- Argentina
- A court ruling halts the EU-Mercosur trade deal Shares a channel: Both decide Mercosur's market access with Western partners; the EU deal has applied since 1 May 2026.
- The US raises its Section 301 duty on Brazil or strips its exemptions Shares a channel: US duties push both Canada and Brazil to seek other partners.
- Brazil after the vote: a contested result or a fiscal break Driven by: The runoff result sets who leads Mercosur's side.
- The US tariff wall around Canada and Mexico stays up or grows Driven by: US tariffs on Canada are the reason for the hedge.
Sources
13 sources, numbered as the text cites them
- Canada wants to close Mercosur deal before end of 2026 (AFP). BNN Bloomberg · 14 Jul 2026 · News · confidence medium · retrieved 25 Oct 2026
- Canada-Mercosur free trade agreement negotiations. Global Affairs Canada · 1 Jun 2026 · Official · confidence high · retrieved 26 Oct 2026
- Canada nears free-trade deal with Mercosur bloc, sources say (Reuters). The Globe and Mail · 27 Mar 2026 · News · confidence high · retrieved 25 Oct 2026
- Progress intensifies in Canada-Mercosur free trade agreement negotiations. Gardiner Roberts LLP (Mondaq) · 6 Apr 2026 · Commentary · confidence medium · retrieved 25 Oct 2026
- Acordo Mercosul-Canada avanca em decima rodada de negociacoes (Agencia Brasil). CartaCapital · 30 May 2026 · News · confidence high · retrieved 25 Oct 2026
- Notas a imprensa (titles, 14 Aug-23 Oct 2026). Ministerio das Relacoes Exteriores · 23 Oct 2026 · Official · confidence medium · retrieved 25 Oct 2026
- Canada-Brazil relations. Global Affairs Canada · 30 Jun 2026 · Official · confidence high · retrieved 25 Oct 2026
- EU-Mercosur agreement. European Commission, DG Trade · 2026 · Official · confidence high · retrieved 25 Oct 2026
- Brasil define regras para exportadores acessarem cotas do acordo Mercosul-EFTA na Noruega. MDIC · 20 Oct 2026 · Official · confidence high · retrieved 25 Oct 2026
- Lula e reeleito presidente do Brasil em virada historica. Agencia Brasil · 25 Oct 2026 · Official · confidence high · retrieved 26 Oct 2026
- Brasil e Canada avancam em nova rodada de negociacoes do acordo Mercosul-Canada. Times Brasil (Estadao Conteudo) · 2 May 2026 · News · confidence medium · retrieved 26 Oct 2026
- X Rodada Negociadora MERCOSUL - Canada: Nota Conjunta MRE/MDIC/MAPA (LegisWeb copy). LegisWeb · 1 Jun 2026 · Official · confidence medium · retrieved 26 Oct 2026
- Results file, 2nd round, President, Brazil (br-c0001-e006258-u.json; 25/10/2026 23:27:02; 100% of sections totalled). Tribunal Superior Eleitoral · 25 Oct 2026 · Official · confidence high · retrieved 27 Oct 2026
Reviewed 25 Oct 2026 · version 1 · last change: reviewed · All risks