The MERCOSUR-Singapore Free Trade Agreement (MCSFTA) officially came into effect for Singapore and Paraguay on 1 February 2026. This marks Singapore’s 29th free trade agreement and its inaugural trade deal with the founding members of MERCOSUR, a South American trade bloc comprising Argentina, Brazil, Paraguay, and Uruguay. The agreement aims to enhance economic integration by reducing tariffs, promoting investment, and fostering cooperation in various sectors.
The MCSFTA is set to extend to Uruguay on 1 March 2026, following the completion of its ratification process. Whilst Argentina and Brazil are still undergoing their respective ratification procedures. The agreement is significant as it facilitates greater trade flows, establishes predictable investment conditions, and encourages collaboration in areas such as digitalisation and sustainable development.
MERCOSUR boasts a combined GDP of nearly US$3t and a population exceeding 295 million. In 2025, Singapore’s trade with MERCOSUR member states amounted to $8.8b (S$11.9b), accounting for over 30% of its total trade with Latin America. Nearly 200 Singaporean companies operate within MERCOSUR markets, highlighting the importance of this agreement.
The MCSFTA was signed by Singapore’s Minister for Foreign Affairs, Vivian Balakrishnan, and MERCOSUR ministers at the 63rd Summit of Heads of State of MERCOSUR and Associate States on 7 December 2023. The agreement promises to provide Singaporean traders and investors with clearer and more transparent access to South American markets, enhancing trade architecture between the regions.
