Lee Eyes Wider Latin America Reach for Trade, Defense as Global Order Shifts

Lee’s Message in Brasilia: Trade, Resources and Diversification

President Lee Jae Myung opened his first Latin American tour with a clear signal: deepening ties with the region is central to South Korea’s ability to manage a rapidly changing global order. Speaking from Brasilia before summits in Brazil, Chile, and Argentina, Lee framed the trip as part of a broader push to diversify Seoul’s diplomatic and economic networks beyond its traditional partners.

The itinerary puts economic and supply chain imperatives at the forefront. Top priorities include reviving negotiations on a Korea-Mercosur trade agreement—dormant since 2021—and expanding South Korean companies’ footprint in a combined market of 280 million people and $3.7 trillion in GDP. Lee also used his first stop to inspect the first of three C-390 military transport aircraft ordered from Brazil’s Embraer, underscoring a defense partnership that includes offset production by South Korean SMEs.

The resources that sit in the ground are a powerful draw. Brazil holds the world’s second-largest rare-earth reserves, Chile has the largest copper and lithium reserves, and Argentina is a top exporter of soybean oil and holds the second-largest shale gas reserves. The Korean government sees these assets as a hedge against supply chain risks arising from climate change and geopolitical instability, particularly for industries reliant on critical minerals and foodstuffs.

Meetings with Brazilian President Lula da Silva on Monday—their fifth encounter and second formal bilateral summit—will test whether the diplomatic goodwill can translate into concrete commercial progress. Lee’s remarks published in O Globo signalled an emphasis on a “balanced outcome” for the trade deal, and the broader ambition to establish South Korea as a “key global player” within the Global South.

The Strategic Calculus Behind Seoul’s Latin America Outreach

Resuming Korea-Mercosur: More Than an FTA

The stalled trade negotiations are not merely a commercial file; Lee’s comments frame the agreement as a demonstration of commitment to a free and open trading order at a time of growing global uncertainty. For South Korea, a deal with Mercosur would lock in preferential access to agricultural and raw-material heavyweight economies—reducing tariffs on industrial exports and securing supply lines that currently rely on more competitive Chinese and Western intermediaries. The challenge is political: Mercosur’s protectionist reflexes and Brazil’s own industrial priorities have blocked the talks for years. A long-awaited resumption would require Seoul to navigate sensitive agricultural market-opening demands while delivering real benefits to Korean manufacturers.

The Defense and Industrial Partnership

Lee’s inspection of the C-390 and his suggestion of future civilian aircraft co-development signal that defense cooperation is intended as a long-term industrial relationship, not a one-off procurement. With South Korean SMEs already producing components like the rear fuselage under the offset arrangement, Embraer provides a platform for Korea’s mid-tier aerospace firms to embed themselves in global supply chains. For Brazil, deeper defense ties with a technologically advanced mid-sized power offer an alternative to traditional Western suppliers and a potential avenue for co-developing systems for third-country markets. The announcement that Lee wants to “build civilian aircraft together” adds an aspirational layer that, if realised, would elevate the partnership well beyond the initial three-aircraft order.

Resource Security: A Supply Chain Play

The resource profiles of Brazil, Chile, and Argentina make the tour a de facto supply chain diversification mission. South Korea’s electric-vehicle battery and semiconductor industries are highly exposed to lithium and rare-earth supplies currently dominated by a few producers. By institutionalising ties with Latin America’s commodity champions—backed by diplomatic engagement and trade frameworks—Seoul hopes to de-risk its raw-material intake. The Korean government’s own statement that the region’s location on the opposite side of the globe makes it “attractive for diversifying risks” signals a view that overconcentration in nearby Asian supply chains is a strategic vulnerability. Whether companies can turn diplomatic access into binding, long-term off-take agreements will depend on how quickly trade barriers are negotiated down.

From Mercosur Talks to C-390s: What Businesses and Policymakers Should Watch

For South Korean businesses and policymakers, the tour offers several specific signposts:

• Manufacturers, auto exporters, and electronics firms have a concrete incentive to lobby the government for rapid progress: a Korea-Mercosur trade agreement would grant preferential access to a market of 280 million consumers and reduce tariff disadvantages relative to Chinese and European competitors who are already active in the region.
• Companies reliant on copper, lithium, or rare earths—including battery makers and semiconductor manufacturers—should begin mapping potential offtake or investment opportunities in Chile (copper and lithium), Brazil (rare earths), and Argentina (shale gas), as diplomatic momentum creates a more permissive environment for government-backed resource agreements.
• Mid-tier Korean aerospace and defense firms have an immediate opening through the C-390 offset program. Beyond the current order, Embraer’s global supply chain could become a springboard if Seoul can convert Lee’s civilian-aircraft co-development vision into a formal industrial partnership.
• The resumption of Mercosur talks—if it materialises—will hinge on Korea’s willingness to open parts of its agricultural market. Agribusiness importers and food companies should track the negotiations, as tariff concessions on South American beef, soy, and sugar could reshape domestic supply costs.