Economic relations with Latin America


Relations between German business and the countries of South America have a long tradition. Many German companies have been present in the region for over a century and have an excellent reputation there. Especially Brazil and Mexico are attractive business partners for Germany.

Employees of Beiersdorf, Silao, Mexiko (file photo)
Employees of Beiersdorf, Silao, Mexiko (file photo)© Th. Koehler / photothek.net

Latin America can look back on a golden decade, so to speak, because high demand, particularly from Asia, along with high prices for raw materials on the global market, generated strong growth in many Latin American countries. The drop in prices of, and global demand for, raw materials, along with slower economic growth around the world, are posing great challenges to the region.

Population growth, increasing urbanisation and efforts to diversify economic structures offer opportunities for German businesses. 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 health sector.

The European Union has signed trade agreements with 26 of the region’s 33 countries. These include the CARIFORUM countries, Chile, Mexico, Colombia, Ecuador and Peru. Negotiations are underway on an agreement with the MERCOSUR countries (Argentina, Brazil, Paraguay and Uruguay).

Supporting the efforts of German companies

VW factory in Buenos Aires/Argentina© T. Imo / Photothek

The German Government is helping German businesses 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. In Peru, for example, a so-called German Desk has been set up which provides small and medium-sized enterprises with specialised financial advice from the Chamber of Commerce Abroad, the Kreditanstalt für Wiederaufbau, the German Investment and Development Company and the local partner bank Banco Financiero. 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 Initiative of German Business brings together Germany’s business associations.

Promoting sustainable production and use of energy and raw materials

Factory of Schaeffler in Irapuato, Mexiko (file photo)
Factory of Schaeffler in Irapuato, Mexiko (file photo)© Th. Koehler / photothek.net

Energy and raw materials policy plays a key role in Germany’s cooperation with Latin America. As a country with few raw materials, Germany is highly dependent on imports to supply its needs. 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.

São Paulo, Brazil’s economic powerhouse
São Paulo, Brazil’s economic powerhouse© picture - alliance / ZB

Latin America has rich deposits of minerals, such as iron, copper, tin and lithium. Just under 60% of the global production of lithium – needed, for instance, for manufacturing lithium-ion batteries for electric cars – 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.

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