Facilitated by FTAs and consumption demands: Vietnam’s pangasius expands in Mercosur

Mercosur - A large economic bloc with vast potential

Mercosur is currently the fifth-largest economic bloc globally in terms of population with over 600 million people, rising per capita income and growing demand for imported food products. As South American consumers increasingly prioritize healthy nutrition, animal protein from seafood, particularly whitemeat fish, is seen as a viable alternative to red meat—a trend that has been prevalent in EU over the past decade.

Among whitemeat fish, Vietnamese pangasius holds a distinct benefit in several Mercosur member countries, especially Brazil and Colombia– an observer country of Mercosur. This presents a significant opportunity for Vietnamese pangasius to expand its market share in the region if the FTA is signed.

Brazil is currently the leading market in South America for Vietnamese pangasius and ranks as the third-largest consumer of Vietnamese pangasius globally, behind China and the US. According to Vietnam Customs data, as of May 15, 2025, pangasius exports to Brazil reached $70 million, a 70% increase compared to the same period last year. In Q1 2025, Vietnam’s seafood exports to Brazil totaled $48.2 million, up 73%.

South American consumer preferences: A promising "replica" of the EU

Mercosur has the potential to become a "second EU" for Vietnamese pangasius due to similarities in seafood consumption patterns. Urban consumers in Brazil, Colombia or Argentina are increasingly focused on healthy nutrition, favoring animal protein with low fat content, high Omega-3 and easy preparation.

Vietnamese pangasius with its white, soft, boneless meat, mild flavor and affordable price is an optimal substitute for more expensive imported cod or pollock from North America or Europe. Additionally, major supermarket chains in South America are increasing the share of imported products, with frozen pangasius fillets and value-added products like breaded fish, fish portions, fish balls.. gaining acceptance among consumers.

This consumption trend closely mirrors that of the EU which once served as the driving force for Vietnamese pangasius over an extended period. This explains why many industry experts regard MERCOSUR as a "new EU" for Vietnam’s pangasius industry.

Vietnam - Mercosur FTA: A strategic boost for the pangasius industry

In June 2023, Vietnam and Mercosur officially announced the start of a feasibility study for a Vietnam-Mercosur FTA. Amid global trade volatility, this FTA is not only economically significant but also a strategic move to restructure Vietnam’s seafood exporters with pangasius being the most promising sector.

The signing of the FTA will help eliminate high tariff barriers in some Mercosur countries, particularly Argentina and Uruguay. This will enhance the price competitiveness of Vietnamese pangasius compared to both domestic products and those from other exporting countries such as China and India.

In addition, Mercosur is gradually raising its food safety and hygiene standards to align with international practices. Early establishment of mutual recognition mechanisms for quarantine, traceability... will help Vietnamese pangasius access and sustainably capture the market.

Moreover, the FTA will facilitate logistics cooperation, enabling the development of distribution centers, cold storage, reducing delivery times and transportation costs—a major current barrier.

Challenges and solutions

However, to effectively capitalize on this market, Vietnamese pangasius exporters must clearly identify the associated challenges. First and foremost is the issue of logistics: high maritime shipping costs and long delivery times to South America impact product freshness and competitiveness.

Additionally, while less stringent than EU or US standards, Mercosur countries are tightening regulations on food safety, traceability, eco-friendly packaging... If Vietnamese enterprises do not proactively adapt, they may find themselves at a disadvantage once stricter controls are enforced.

Furthermore, intra-regional competition is another factor to consider. Argentina, Uruguay and  Chile(an associated member of Mercosur) produce local freshwater fish and seafood products. Though limited in volume, they benefit in terms of geographic proximity and lower logistics costs.

To position Mercosur as the "second EU" for Vietnamese pangasius, a comprehensive strategy is essential from both government and businesses:

Accelerate negotiations and the signing of a Vietnam–Mercosur FTA as soon as possible, with special tariff incentives for seafood products; Strengthen trade promotion efforts and build a national brand for Vietnamese pangasius at international food fairs in Brazil, Argentina, Colombia; Invest in transcontinental logistics, partnering with local firms to develop cold supply chains and distribution centers; Innovate products to suit consumers preferences; Standardize production and traceability, adopting certifications like ASC, BAP, and Halal... to increasingly stringent import requirements.

South America is emerging strongly on the global trade map and is an attractive destination for Vietnam’s seafood industry. With impressive pangasius export growth to Brazil, Colombia, Argentina...and consumption patterns similar to the EU, Mercosur could become a "second EU" for Vietnamese pangasius in the near future.

The opportunities are evident, but sustainable market conquest, the Vietnamese pangasius industry must stay ahead of the curve through proactive product innovation, distribution network development, and most importantly, by expediting the Vietnam–Mercosur FTA process. If executed well, the pangasius industry could generate hundreds of millions of USD in additional export value from this vast, protein-hungry market.