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Economic ties with Latin America and the Caribbean
Economic ties between Germany and Latin America have traditionally been close. For more than a century, numerous German companies have maintained a presence in Latin America, where they enjoy an excellent reputation.
Many Latin American countries, such as Brazil, Argentina and Mexico, have developed vibrant economies that are well poised to engage in trade and economic cooperation, even though high inflation, structural weaknesses and difficult global framework conditions do pose significant challenges for the region. Yet it must also be said that Latin America plays a key role in successfully tackling global economic transformational processes, for example when it comes to the development of renewable energies, for which some countries in the region provide important raw materials.
Population growth, increasing urbanisation and efforts to diversify economic structures offer opportunities for German business. There is still a considerable need to modernise and expand Latin America’s infrastructure, and this bears potential for transport and logistics companies. There is also a demand for cutting-edge German technology in other areas – for instance in mining, renewable energies, environmental technology and the healthcare industry. Conversely, the region provides Germany with beneficial impetus for its own economic and technological development, for example with respect to the digital transformation.
Comprehensive economic partnerships with Latin America
The German Government is not only looking to engage in close cooperation in key sectors, but is also seeking to create a wide-ranging economic partnership with Latin America. To this end, the German Government strongly supports the European Union’s extensive efforts to enter into ambitious partnership agreements. In addition to the far-reaching trade agreements that have been concluded with Peru, Colombia and Chile, an extensive free trade and economic partnership agreement was signed with the Caribbean Forum (CARIFORUM) in 2008. In May 2026, the EU and Mexico signed a modernised version of the free trade agreement that had been in effect since 2000. In June 2012, the EU finalised a ground-breaking association agreement with the Central American countries Costa Rica, El Salvador, Guatemala, Honduras. Nicaragua and Panama that was also the first interregional agreement of its kind. The key focus of this agreement, which fully entered into force on 1 May 2024, is the liberalisation of trade in industrial goods and fishery products, as well as the elimination of most tariffs on agricultural products.
The most decisive milestone is however the intensification of trade relations with Latin America brought about by the EU-Mercosur Agreement. It creates one of the world’s largest free trade zones, comprising more than 700 million people. The Mercosur countries – Argentina, Brazil, Paraguay and Uruguay – are important markets for German exports. The agreement opens up opportunities for German and EU companies to participate more actively in the dynamic economic development of the region. Innovative small and medium-sized enterprises in particular will enjoy greater legal certainty for their business activities through the agreement.
German business: promoting economic activity
The German Government is helping the German business community exploit the wealth of opportunities Latin America offers. The German Chambers of Commerce Abroad, together with Germany’s missions abroad and Germany Trade and Invest (GTAI), a German Government agency, are the three main players in our external economic promotion activities. The principal target group here are small and medium-sized enterprises. As a corporate network and information platform for German companies, Lateinamerika Verein e.V. – Business Association for Latin America – also makes a major contribution to launching and expanding business activities in the region. The Latin America Committee of German Business (LADW) is a board composed of corporate representatives under the auspices of the Federation of German Industries (BDI) that provides an industry-focused perspective on economic cooperation between Germany and Latin America. The Latin America Initiative of German Business (LAI) brings together business associations.
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. As a country with few raw materials of its own, Germany is highly dependent on imports. Besides security of supply, economic efficiency of production and environmental compatibility are the key factors that shape the German Government’s natural resources policy.
In the sphere of energy, Germany is one of the region’s main partners for bilateral cooperation. There is significant potential for enhancing energy efficiency in Latin America – and it has by far not been fully 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 therefore 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 modernisation 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.
Latin America has rich deposits of minerals, such as iron, copper, tin and lithium. Just under 60% of global lithium production – a critical mineral needed for manufacturing lithium-ion batteries for electric cars, for instance – comes from Latin America. This is one reason why cooperation with Latin America is of great importance, since Germany develops and brings to market a great deal of cutting-edge technology.
