Brazil’s Oct. 25 runoff tests Canada’s Mercosur trade push

Brazilians vote on Oct. 25 in a presidential runoff that polls call a toss-up between right-wing Sen. Flávio Bolsonaro and incumbent Luiz Inácio Lula da Silva, as Canada hopes to close a trade deal with Brazil’s Mercosur bloc.

The race matters to Canada because Brazil leads the Mercosur side of those talks, and Foreign Minister Anita Anand has said she wants the deal concluded “ideally before the end of 2026.” Canada’s merchandise trade with the bloc was $15.8 billion in 2024, according to the Government of Canada figures cited by The Canadian Press.

Flávio Bolsonaro won the first round on Oct. 4 with 47.03 per cent of the vote, or 56,104,503 ballots. Lula took 45.16 per cent, or 53,879,538, a gap of 2,224,965 votes, according to figures compiled by the Rio Times. Abstention was 21.08 per cent, the highest in a first round since 1998. Because no one cleared a majority, the top two meet again.

The latest polls show a narrow Bolsonaro lead that sits inside most margins of error. Al Jazeera reported that a CNT/MDA survey released Oct. 16 had Bolsonaro at 46.8 per cent and Lula at 45.9 per cent, Quaest had 46 per cent to 44 per cent, and Datafolha had 47 per cent to 45 per cent. The Rio Times calculated an average of the latest poll from 12 pollsters at 51.2 per cent for Bolsonaro and 48.8 per cent for Lula of valid votes. Vox Brasil, in a survey conducted Oct. 5 to 7, was the one pollster in that tally with Lula ahead, at 50.86 per cent.

Polls have misjudged this race before. Datafolha’s final first-round survey had Lula ahead, and Bolsonaro won, the Rio Times noted. Al Jazeera said experts still consider the runoff a toss-up. Our earlier reports covered the Oct. 15 poll, the Senate’s 75-1 vote for a 40-hour work week and a court order on Meta’s treatment of both candidates.

The two men offer different economic and foreign policy paths. According to the Rio Times, Lula would keep Brazil’s fiscal framework and exempt monthly salaries up to 5,000 reais from income tax, while Bolsonaro proposes deep spending cuts, cutting at least 10 ministries, revising the tax reform and resuming privatization. On the United States, Lula stresses sovereignty and trade diversification in response to U.S. tariffs, while Bolsonaro has pledged to repair ties with Washington.

The Canada-Mercosur talks began in 2018 and covered Argentina, Bolivia, Brazil, Paraguay and Uruguay, The Canadian Press reported in April. Years of stalling ended when U.S. tariffs pushed both sides back to the table in 2025, AFP reported in July. Brazilian Foreign Minister Mauro Vieira said then that “we’ve already had six rounds of negotiations that are moving along very well,” with “some details to be worked out.”

Speaking in São Paulo in July, Anand said: “We’re going to double non-U.S. trade agreements in the coming decades.” Paula Barboza, a director at Brazil’s foreign affairs ministry, told The Canadian Press in April that an agreement was on track to be signed by the end of the year and that both sides wanted to close talks “as quick as possible.”

The Canadian Press reported that Canada’s 2024 trade with Mercosur was lopsided: $3.1 billion in exports and $12.8 billion in imports. The bloc has more than US$3.0 trillion in GDP and 282 million people. A Government of Canada consultation on the talks is posted on canada.ca.

Tariff cuts of up to 35 per cent could apply to autos, information and communications technology, industrial machinery, chemicals and plastics, and forestry exports, the Canadian Press reported, citing the Government of Canada. Fen Osler Hampson, a professor at Carleton University, said fertilizers, grains, forestry, processed foods, auto parts and services such as engineering and mining consulting could benefit, while beef, poultry and some manufacturing would face competition.

Farmers are the main source of Canadian resistance. Keith Currie, president of the Canadian Federation of Agriculture, told The Canadian Press that Mercosur countries have “significant scale, lower production costs” and different regulatory and environmental approaches. Anand acknowledged those worries in July, according to AFP. The European Union reached its own deal with Mercosur in January after more than 25 years of talks, and AFP said it took provisional effect in May.

We did not find a public statement from either candidate on the Canada-Mercosur negotiations, so the effect of a Lula or Bolsonaro win on the timeline is not known.

Polls open Oct. 25 at 8 a.m. Brasília time and close at 5 p.m., when the electoral court begins publishing results, the Rio Times reported. The winner takes office Jan. 5, 2027. Canadians travelling to Brazil can check the current advisory at travel.gc.ca.

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Via The Canadian Press (BNN Bloomberg), AFP (Canadian Affairs), Al Jazeera and the Rio Times.