Economic relations

Germany’s economic relations with Latin America are close and of long standing. Many German companies have been present in the region for over a century and have an excellent reputation there. In recent years Germany’s trade with Latin America has grown faster than our trade overall. We see Brazil and Mexico along with a range of other new players in Latin America as promising economic partners.

Sound economic fundamentals, market-oriented policies in many countries and growing regional integration mean there is good reason for German companies to show renewed interest in the region. Latin America accounts for a growing share of global output and world trade; many countries in the region are recording strong economic growth. Their economic stability was demonstrated during the economic and financial crisis, when they were less severely affected by the recession than many established industrialized nations. Germany and Latin America are keen to seize the new economic opportunities ahead, from which both sides stand to gain.

The region’s economic progress is also reflected in the greater role it now plays in the international arena. The OECD has adapted to these new realities, inviting Latin American countries to participate in its enlargement and cooperation processes. Following Mexico’s lead, Chile joined the OECD in 2010. There is a clear need to include the countries of Latin America in efforts to develop appropriate strategies for addressing global issues.

During Germany’s G8 Presidency in 2007 further steps were taken at Heiligendamm to give emerging economy countries a greater voice in world affairs as well as greater responsibility here. The confirmation in 2009 in Pittsburgh of the G20 as the premier forum for international economic cooperation means that Latin American countries are now increasingly involved in the management of the world economy. Today, Brazil, Mexico and Argentina participate as equals when the world’s major economic players convene as the G20 to discuss reform of the world financial system. The equal partnership emphasized in the German Government’s Strategy on Latin America and the Caribbean is therefore already in many ways reality.

At the invitation of the Mexican G20 Presidency, G20 finance ministers met on 25 and 26 February 2012 for the first time in Latin America. This demonstrates that the equal partnership emphasized in the German Government’s Strategy on Latin America and the Caribbean is already in many ways reality.

New opportunities for German business

The German Government is helping German business to exploit the wealth of opportunities Latin America offers. The 21 German Chambers of Commerce Abroad together with Germany Trade and Invest (GTaI), a federal agency, and Germany’s missions abroad are the three main players in our external economic promotion activities. The principal target group here are small and medium-sized enterprises. A key partner in this connection is the Latin America Initiative of German Business, which brings together a number of business associations with interests in the region. As a corporate network and information platform for German companies, the Lateinamerika-Verein – Business Association for Latin America – also makes a major contribution to launching and expanding business activities in the region.

In most Latin American countries economic growth has created a need for new infrastructure. Infrastructure projects offer German business the chance to get involved in the region. A good example here is Brazil, which as host of the 2014 FIFA World Cup and the 2016 Olympic Games has special challenges to face. To ensure that German companies will be able to participate in creating the relevant infrastructure, at the political level cooperation agreements were concluded with the Brazilian Government already at an early stage. Major infrastructure projects, such as the construction of roads, railway lines, ports, airports and logistic centres are of particular interest to German business. Cutting-edge German technology – in mining, for instance, renewable energies, environmental technology and the health sector – is in great demand also in other areas. With its considerable expertise in large-scale projects requiring long-term and sustainable planning and design, Germany has much to offer Latin America.

Promoting sustainable production and use of energy and raw materials

Energy and raw materials policy plays a key role in Germany’s cooperation with Latin America. In the sphere of energy, Germany is one of the region’s main partners for bilateral cooperation. The potential for enhancing energy efficiency in Latin America is huge – and still far from tapped. The same applies to efficiency in energy generation and transportation. Ensuring that Germany has a sustainable, secure and cost-effective supply of energy and raw materials is another important aim of our cooperation with the region.

The German Government is accordingly supporting efforts by countries in the region to develop sustainable energy systems by providing advice, funding projects and concluding energy and climate protection agreements. German companies are in an ideal position to participate in the modernization of energy generation in Latin America. The challenge is to access new markets, particularly in the field of renewable energies, energy efficiency and environmental technology, as well as in the production of raw materials.

As a country with few raw materials, Germany is dependent on imports to supply its needs. This goes not only for energy but also for metals. The German Government’s raw materials policy therefore attaches great importance to security of supply, alongside economic efficiency and environmentally responsible production. Latin America has rich deposits of minerals such as iron, copper, tin and lithium. Just under 60% of the global production of lithium – important, for instance, for the production of lithium-ion batteries for electric cars – comes from Latin America. As this example makes clear, cooperation with Latin America is, for Germany in particular with its advanced technology industries, crucial for the development and introduction of technologies that in the future will play a major role.

Economic and investment promotion instruments

External economic promotion

Last updated 26.01.2013

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