Brazil foreign minister sees EU-Mercosur trade accord this year

By Anthony Boadle and Lisandra Paraguassu
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Nunes reacts during an interview in Brasilia

Brazilian Foreign Minister Aloysio Nunes reacts during an interview with Reuters in Brasilia, Brazil, March 14, 2017. REUTERS/Ueslei Marcelino

By Anthony Boadle and Lisandra Paraguassu

BRASILIA (Reuters) - South American trade grouping Mercosur expects to sign a framework accord this year for a trade deal with the European Union as the U.S. shift to isolationism under President Donald Trump encourages it to look outside the hemisphere for trade opportunities, Brazil's top diplomat said on Tuesday.

Foreign Minister Aloysio Nunes told Reuters in an interview that Brazil and its neighbours in the Mercosur trade bloc have sped up long-running negotiations with the European Union and expect to have a political pact by year-end.

"The U.S. withdrawal from agreements like the Trans-Pacific Partnership (TPP) and the Atlantic Alliance undoubtedly opens new opportunities for us," Nunes said.

President Michel Temer's instructions to Nunes was to deepen Brazil's integration with other parts of the world by first starting in its own neighbourhood, the Mercosur customs union which also includes Argentina, Uruguay and Paraguay.

Free trade talks that have dragged on for over a decade between Mercosur and the European Union have suddenly come alive and negotiators hope to make significant breakthroughs next week in Buenos Aires, the minister said.

"There is an intensification of our talks with the EU and we are moving into a decision-making phase," Nunes said. "We will sign a wide political accord this year and later negotiate more delicate issues."

Brazil, an agricultural powerhouse, is looking to place more food exports in the dynamic markets of Asia, where China has displaced the United States as the top Brazilian trading partner with its purchases of soybeans and iron ore.

"This is a new area of Brazilian diplomacy," Nunes said, adding that a tour of seven Asian countries by Agriculture Minister Blairo Maggi in September had "successfully sowed the seeds" for new Brazilian sales.

(Reporting by Anthony Boadle and Lisandra Paraguassú; editing by Daniel Flynn and G Crosse)