Becoming more sovereign – together with Latin America?

The EU is striving for strategic sovereignty: this means economic resilience, environmental sustainability and digital independence. However, in a world of multipolar power relations, unstable supply chains and global transformation processes, this can only be achieved through strong, reliable partnerships. Latin America can play a central role in this.

But how can this partnership contribute to the economic, ecological and digital sovereignty of both regions? This question was discussed at the LADW Focus Event today at this year’s Day of Industry (TDI), one of the largest economic policy conferences in Europe: Brazil’s Foreign Minister, H.E. Ambassador Mauro Vieira, as keynote speaker, Colombia’s Ambassador to Berlin, H.E. Ambassador Yadir Salazar Mejía, Stefan Rouenhoff, Parliamentary State Secretary at the Federal Ministry of Economics, Dominik Asam, Member of the Executive Board and CFO of SAP SE, Stefan Oelrich, Member of the Executive Board and CEO Pharmaceuticals of Bayer AG, and ntv business journalist Isabelle Körner.

Latin America can make indispensable contributions to Europe’s economic resilience, climate protection and technological sovereignty. However, the EU and Germany must act quickly and decisively in order not to miss the boat. Because competition for the region is fierce. The specific fields of action are:

- Ratify the EU-Mercosur Agreement swiftly: The agreement is key to fair trade, sustainable growth and Europe’s geopolitical independence. Any delay opens up space for other players – above all China.
- Diversify supply chains: Latin America offers alternatives in the areas of energy, industrial and critical raw materials. Europe should use these to reduce dependencies.
- Strengthen innovation and scientific cooperation: The region has great potential, especially in digitalization, AI and sustainable technologies. The well-connected Latin American diaspora in Germany can build bridges here.
- Leverage cultural proximity & strong presence of German companies in the region: Shared values facilitate the expansion of economic cooperation – this should be promoted in a targeted manner.
- Setting the political course now: Turn upcoming events into milestones in cooperation: EU-CELAC summit in Colombia in November 2025, COP30 also in Brazil in November 2025 and Hannover Messe 2026 with Brazil as a partner country, etc.

Conclusion: We have the opportunity to expand our partnership with Latin America for the future – for growth, sustainability and global stability. What counts now: Decide. Act. Network.

Brazil's Foreign Minister, H.E. Ambassador Mauro Vieira

LADW Focus Event at TDI — LADW Managing Director Rafael Haddad, Stefan Oelrich, H.E. Ambassador Yadir Salazar Mejía and Parliamentary Secretary of State Stefan Rouenhoff

Experience innovation instead of just talking about it

This week in Salvador, the 41st German-Brazilian Economic Meeting showed how the spirit of innovation can be experienced live – at the SENAI CIMATEC science and research location, with over 600 participants from both countries.

The key message? Sustainable technologies offer enormous potential for joint projects that combine growth and climate protection. But this requires a clear roadmap: Reduction of bureaucratic hurdles, intensified exchange between the players in both countries and reliable, predictable investment conditions for companies.

This was emphasized by Michael Heinz, Deputy Chairman of the LADW and Member of the Board of Executive Directors of BASF SE, at the opening of the conference, which attracted many high-ranking guests such as Rui Costa, Minister and Head of the Brazilian Presidential Office, Gitta Connemann, Parliamentary State Secretary in the Federal Ministry of Economics and Martina Englhardt-Kopf, Parliamentary State Secretary in the Federal Ministry of Agriculture.

How can we achieve this?

- The ratification of the EU-Mercosur Agreement is and remains the linchpin for taking cooperation to the next level.
- Brazilian and German engineering skills can be used together to develop sustainable and highly innovative products. This should be promoted more strongly.
- A modern double taxation agreement should be negotiated as a genuine catalyst for more investment, growth and trust.
- The continuous and structured political dialog should be ambitiously designed, including with German-Brazilian Intergovernmental Consultations scheduled as soon as possible.
- Hannover Messe 2026, with Brazil as a partner country, comes at exactly the right time to showcase Brazil’s innovative strength and cooperation potential at the world’s most important industrial trade fair.

The countdown is on: In 10 months, the next German-Brazilian Economic Meeting will take place as part of the Hannover Messe. Dr. Jochen Köckler, CEO of Deutsche Messe and member of the LADW, has already extended a warm invitation to participate.

Now is the time to set the course for a strong, sustainable and cooperative future.

The greatest potential for cooperation with Latin America still lies ahead of us

“When the world is in turmoil, we stand by our partners. German companies will continue to invest, train and develop technology – with and in Latin America. The existing economic relations are strong and ready to be expanded,” emphasized LADW Chairman Gunnar Kilian at a LADW reception in Berlin attended by high-ranking guests.

Prior to this, the members of LADW – leading German companies with a strong presence in the region – had exchanged views on current economic and geopolitical developments. The clear conclusion: German companies remain committed to Latin America – more than ever.

Latin America is already the third most important economic region for German industry outside Europe, after the United States and China. And there is great potential for more engagement. From green energy and raw materials, to talent and technology, to reliable partnerships.

But for that to happen, Europe must also take action – pragmatically, strategically and with commitment. It needs attractive, long-term economic policy offers that meet the challenges and opportunities of Latin America, and the ratification of EU agreements such as those with Mercosur and Mexico.

“We at LADW are convinced that the greatest potential for our cooperation still lies ahead,” said Kilian.

Impressions

Gunnar Kilian, Botschafterin Yadir Salazar-Mejía und Rafael Haddad

Carsten Hasbach Dr Ursina Krumpholz Dr Jochen Köckler

Carsten Hasbach, Botschafterin Iris Joseline Pujol Rodriguez und Tim Holt

Strack, Botschafterin Salazar-Mejía, Holt, Hasbach

Dr. Jochen Köckler, Botschafter Francisco Quiroga und Botschafter Fernando Brun

Michael Heinz Botschafterin Juana Martínez González

EU-Mercosur agreement finally concluded

The negotiations for the trade agreement between Europe and the South American Mercosur states have lasted 25 years. At times the talks were considered to have failed, then new hope sprouted up again.

At the Mercosur summit in Montevideo on December 6, the President of the European Commission Ursula von der Leyen, together with the Presidents of Brazil, Argentina, Uruguay and Paraguay, finally announced the agreement on a treaty text. This is a milestone for both regions and sends out a signal for free trade, open markets and international cooperation.

For German and European companies, the agreement is a game changer in relations with Latin America and for the global market, because it is not just about trade. It creates:

- More resilience for both economic regions.
- More opportunities for diversified and secure supply chains.
- More prosperity and jobs for people.
- More quality and safety for the products.
- More environmental and social protection.

But there is still an important stage to come: after the political conclusion is before the ratification process. In the EU, legal scrubbing and translations are being prepared as the next steps so that the agreement can be signed by the EU Council and approved by the EU Parliament. This will be followed by a complex ratification process in the member states, which will not be without controversy.

However, with the political agreement in Montevideo, the EU and Mercosur have already proven that even widely divergent interests can be brought to a common denominator with a willingness to compromise and determination. This new spirit of partnership must now also be used to ensure that the agreement can enter into force as soon as possible.

Press release

Text of the agreement

Key facts about the agreement

Cooperation with Brazil more dynamic than ever

More than 400 participants and 30 high-ranking speakers from both countries came together at the 40th German-Brazilian Economic Meeting (DBWT) at the Autostadt in Wolfsburg at the end of September with one goal in mind: To generate more cooperation between Brazil and Germany and jointly seize opportunities for new projects. From sustainable and innovative technologies, green and digital transformation to mobility and talent. There is no shortage of opportunities. Now it’s up to the players in politics and business.

On the occasion of the DBWT, BDI President Siegfried Russwurm and Gunnar Kilian, Chairman of the Latin America Committee of German Business (LADW) and Member of the Group Board of Management of Volkswagen AG, spoke about important topics in the cooperation.

Siegfried Russwurm:

“Germany and Europe must become more attractive partners for Brazil again. The fifth largest country in the world with more than 210 million inhabitants is playing an increasingly important role on the geopolitical stage and is being heavily courted by other countries. Europe has a lot to offer, especially when it comes to decarbonization solutions and future technologies such as artificial intelligence and quantum technologies.”

“We must not lose any more time on the EU-Mercosur agreement. The aim must be to successfully conclude the negotiations by the end of the year. This would allow us to bind Brazil and the entire region more closely to Europe and send an important signal of resolve to our global competitors China and the USA. Tariffs would be abolished on 91% of all traded goods, resulting in annual savings of four billion euros for European industry exports.”

“Germany and Brazil have many opportunities to drive forward the green transformation together and thus make an essential contribution to decarbonization. Few countries in the world have such a clean energy mix as Brazil: the share of renewable energies in electricity generation is over 93% in Brazil and over 56% in Germany. We can also strengthen our cooperation by working together on green hydrogen.”

Gunnar Kilian:

“A targeted expansion of economic relations with Brazil is crucial for Germany as a business location in the current phase.”

“With its dynamic growth market, Latin America’s largest economy offers the potential for a sustainable strengthening of German industry. The country is already one of the largest investment locations for German companies outside of Europe, laying the foundations for further economic involvement. This can be further developed if the appropriate course is now set in politics and business.”

“A decisive step in this direction could be an agreement to avoid double taxation of companies. Germany and Brazil should resume negotiations on this and overcome technical hurdles. Tax relief for companies would facilitate long-term investment decisions and promote the further diversification of our economies.”

More about the DBWT24: German-Brazilian Economic Meeting

Kilian_Habeck_Russwurm — Gunnar Kilian, LADW Chairman and Member of the VW Group Board of Management, Federal Minister of Economics Dr. Robert Habeck and BDI President Prof. Dr.-Ing. Siegfried Russwurm © Christian Kruppa/BDI

Coming soon in the Autostadt: 40th German-Brazilian Economic Meeting

This year’s German-Brazilian Economic Meeting will take place from September 22 to 24 in the Autostadt in Wolfsburg. Three weeks after the summer break, the most important event in bilateral relations with Latin America will feature promising topics, exciting formats and high-ranking speakers in a unique location.

The program ranges from A for Artificial Intelligence, D for Decarbonization, I for Infrastructure or T for Talents, to Z for Zeithaus Museum.

Already confirmed are

- Federal Minister of Economics Dr. Robert Habeck,
- Lower Saxony’s Minister President Stephan Weil,
- BDI President Prof. Dr.-Ing. Siegfried Russwurm,
- CNI President Ricardo Alban and the
- LADW Chairman and Member of the Group Board of Management of Volkswagen AG Gunnar Kilian.

Several ministers and a large delegation are also expected from Brazil.

It is the perfect opportunity to make contacts, start dialogues or initiate business. If you would like to attend, don’t hesitate – the number of participants is limited!

Minister for Economic Affairs Dr. Robert Habeck — © CNI

Chile stands by green transformation – President Boric visits Berlin

With its wealth of critical raw materials such as copper and lithium, Chile is increasingly becoming an internationally sought-after partner. It is no coincidence that the Andean country received record foreign investment of more than 20 billion dollars last year. However, cooperation with Germany remains at the top of the agenda, as Chilean President Gabriel Boric’s visit to Berlin today made clear.

Together with his ministers Nicolás Grau (Economy) and Diego Pardow (Energy) and a high-ranking business delegation, he met with representatives from German politics and business at the German-Chilean Business Forum. The talks focused on cooperation in the field of critical raw materials and renewable energies.

President Boric emphasized that the green transformation of the Chilean economy is a priority for his government. And the process is opening up new business opportunities for companies from mining to energy production and digitalization.

The reduction of bureaucracy, more efficient approval procedures and an agreement to avoid double taxation are among the most frequently requested improvements to investment and business conditions by companies. However, the discussions gave hope: the Chilean government is currently investing in increasing the number of staff and training them in order to improve the situation until the legislation can be adapted.

The world’s first commercially integrated plant for the production of climate-neutral fuel has become a reality thanks to bilateral cooperation between Chile and Germany. In the Haru Oni project, wind energy is used to produce green hydrogen. This is combined with CO₂ filtered from the air to produce synthetic methanol, which in turn is converted into eFuel using a power-to-methanol plant installed by Siemens Energy and others. This success story now needs to be multiplied.

H.E. Gabriel Boric Font, President of Chile | Fotos © DIHK/Christian Thiel

Tim Oliver Holt, LADW Member and Member of the Executive Board of Siemens Energy AG

Gruppenbild — Tim Oliver Holt, Rosario Navarro (SOFOFA), PStS Dr. Franziska Brantner, MdB (BMWK), H.E. President Gabriel Boric, Ingo Kramer (LAI), Cornelia Sonnenberg (AHK Chile), H.E. Ambassador Magdalena Atria, Victor Ide (AHK Chile), Friedolin Strack (BDI)

Ingo Kramer, Chairman Lateinamerika-Initiative der Deutschen Wirtschaft (LAI)

Oscar Hasbún, Klaus Winkler and Tim Holt, Co-Chairs of the Chile Germany Business Council

Half-time in the game: Updating German-Brazilian Partnership

In the midst of the hustle and bustle of the first day of the trade fair, around 120 Brazilian and German guests came together today for a bilateral forum of BDI, CNI and LADW in the Convention Center at Hannover Messe. Almost five months after the bilateral Intergovernmental Consultations in Berlin last December and five months before the German-Brazilian Economic Meeting on September 23 and 24, 2024, it is time to take stock.

Among others, BDI President Siegfried Russwurm, CNI Vice President Gilberto Petry, Jochen Köckler, Managing Director of Deutsche Messe and member of the LADW, and Brazilian Ambassador Roberto Jaguaribe took a look at achievements and obstacles in the cooperation.

What was already true before has now become even clearer: Shaping the green transformation together will not only enhance the resilience of value chains in both countries but will also help companies achieve climate neutrality more quickly. Brazil is developing into a key “green global player”. Projects are already becoming a reality: ANFAVEA President Márcio de Lima Leite and the Head of Geopolitics at Siemens Energy Carsten Hasbach came to the point. The states of Rio Grande do Sul and Minas Gerais also presented good examples of sustainable investments in Brazil.

Nevertheless, the message is also clear: potential must be addressed more quickly and there is still a lack of a solution for well-known hurdles, such as the missing double taxation agreement.

The 40th German-Brazilian Economic Meeting, which will take place in September in the Autostadt in Wolfsburg, certainly have great potential to become a milestone for the cooperation. The event, which is being held in Germany again for the first time in six years, is eagerly awaited.

There are also positive signals for the invitation to Brazil to become a partner country of Hannover Messe 2026.

Brazil-Germany Forum — FIEMG President Flávio Roscoe, Governor of Rio Grande do Sul Eduardo Leite, CNI Vice-President Gilberto Petry, Ambassador Roberto Jaguaribe, BDI President Prof. Dr.-Ing. Siegfried Russwurm, Hannover Messe CEO Dr. Jochen Köckler and Member of the BDI Executive Board Wolfgang Niedermark © BDI/Christian Kruppa

BDI President Russwurm and Messe CEO Köckler — © BDI/Christian Kruppa

CEO Agenda for cooperation with Latin America and the Caribbean

The LADW has developed a CEO Agenda to highlight the economic potential of Latin America, to provide the necessary strategies and approaches for the diversification of German companies and to promote the expansion of cooperation with Latin America. The basis for the development of the agenda is the perspective of the CEOs and board members of renowned companies that are gathered in the LADW. It combines information from various interviews and expert discussions with an in-depth analysis of the region.

Resume

Context

- Due to the changed geopolitical situation, cooperation with Latin America has gained new momentum. Motivated by the change of government in Brazil in January 2023, the German government’s travel activities and efforts in the region are more intensive than ever before.
- However, the lack of attention in recent years has had consequences. Germany and the EU have lost importance in the region. Latin America is increasingly valued as an attractive region and is receiving offers for investment from all over the world – from the USA, the Middle East, Russia and Asia. Germany is therefore also expected to make concrete offers of cooperation and projects.
- The German economy is dealing intensively with the recession in its own country, is undergoing a costly transformation process in order to achieve climate targets and at the same time is being forced to diversify more strongly. All of this is tying up resources and could make additional investment capacity in new markets scarce, especially in the industrial SME sector.

The most important findings

1 Latin America’s potential

Latin America has a key role to play in strengthening the resilience of the German economy.

As a growth market, Latin America can keep pace with China and India – with annual growth rates of up to 6% from 2027 – if it focuses on future-oriented industries with sustainable technologies and intensifies international trade (e.g. through trade agreements with the EU). The region already offers higher margins for companies than Asian markets such as China and Malaysia.

- Future industries have great potential for Latin America due to the region’s good natural conditions for sustainable technologies. In the past, for example, the wind energy market in Brazil grew by an average of more than 30 % per year, which means a potential impact on GDP of up to 1 %.
- The economic impact of trade agreements, such as bilateral agreements or the Mercosur agreement, could generate additional GDP growth of up to 2 %.
- To prevent a decline in GDP growth of up to 21% by 2030, Latin American countries urgently need an increase in productivity. The impact of productivity on GDP growth is currently lowest in Latin America. Latin America has a key role to play in strengthening the resilience of the German economy.

Today, the region is one of the most promising and competitive markets for the production of renewable energies in the world. In addition, there are immense reserves of important raw materials that are crucial for a green transformation of the industry. South America can become one of the largest export platforms for green hydrogen and other forms of exportable renewable energy.

- Although Latin America already has a very high proportion of renewable energies in its electricity mix, electricity generation from renewable energy sources in the region still has room for expansion and is likely to increase further.
- The global hydrogen market is expected to grow by around 40% annually – Chile and Brazil are among the world’s leading locations that could produce green hydrogen for less than USD 1.50 per kg of H2 in 2030. In Latin America, 12 hydrogen production projects are already in operation and around 70 are under development, with more than 500 industrial-scale projects planned worldwide.
- Latin America has around 60% of the world’s lithium reserves, i.e. 11 times more than Europe. Demand for lithium will exceed supply as early as 2024 and the ratio will reverse from a surplus of around 30% in 2021 to a shortage of around 20% in 2025. Around 18% of rare earth reserves are also located in Brazil, the second largest reserves in the world and 18 times more than in Europe.
- Chile and Brazil are international leaders when it comes to additional capacity for wind and solar projects.

Latin America is ideally placed to become a strategic market for attracting skilled workers for German companies, particularly in technical professions. In addition, labor costs there are among the most competitive in the world.

- Engineering, IT and natural sciences account for more than 20% of university degrees in Brazil, Chile, Mexico and Colombia. In Germany, there have already been around 700,000 vacancies in tech jobs since 2018 and the gap is expected to grow to around 780,000 by 2026.
- Another talent pool for German companies in Latin America are school leavers who do not start higher education – in Brazil, this amounted to 31 million young adults in 2021. They are potential candidates for new educational opportunities, such as programming schools, which German companies could launch in the country on a “tailor-made” basis.
- In addition, Brazil produces around 500,000 university graduates in technology and around 900,000 in business every year, with a current low employment rate of around 83% for 25 to 64-year-olds with a university degree (around 60% overall). This leads to additional potential for recruiting skilled workers for German companies.
- Tech hubs as locations with IT specialists and founders, such as São Paulo, Bogotá or Mexico City as part of the technological growth in the software and hardware industry, can also offer starting points to benefit from the talent pool in Latin America.

2 German involvement in the region

Germany is still well positioned in Latin America. However, political and economic cooperation is stagnating and market shares have been gradually lost.

- With only around USD 50 billion in investments in Latin America, Germany is one of the worst performers in an OECD comparison (average investment portfolio of OECD countries: USD 80 billion).
- German exports to the region have also barely grown in the last 10 years: while the USA and China have increased their exports by 38% (2022: USD 547 billion) and even 87% (2022: USD 252 billion) respectively during this period, German exports have only grown by 3% (2022: USD 44 billion).
- China’s role as a technology partner in the local markets should not be underestimated. On the one hand, Chinese investments show a shift in investments from state banks to commercial banks, while on the other, the majority of transactions relate to advanced technologies such as communications, automobiles and the production of electronic components.

3 Conclusion: Strategies for expanding cooperation

New political and economic approaches are needed to expand Germany’s engagement in Latin America beyond the status quo. Only in this way will it be possible to seize opportunities arising from the economic reorganization of the global ecosystem in good time.

- The economic reorganization of the global ecosystem could have a significant impact on Latin America’s development. Germany and the EU must have a stronger presence in this phase (e.g. long-term commodity contracts are now being awarded) to avoid losing even more of their importance for the region.
- German companies would be well advised to review the importance of Latin America for their global diversification strategy and make long-term decisions regarding their involvement in the region.
- Five strategies can help companies increase their presence in Latin American markets:

1) Import of critical/sustainable resources such as lithium, rare earths and energy from renewable sources, e.g. via green hydrogen.

2) Production in the region for export.

3) Equipping local companies with technologies that increase productivity, e.g. IoT technology, machines and digital tools.

4) Strengthening and aligning the offer to the growing middle class in Latin America and their needs in certain areas, e.g. mobility and healthcare.

5) Utilization of the large talent pool of highly qualified specialists in Latin America through targeted training offers and measures, as the region is culturally compatible with the USA and Europe.

- In line with the five strategies, the CEO Agenda recommends four possible levers, ranging from actions by individual companies, alliances and cooperation between several companies to necessary political measures.
- In addition, 9 concrete initiatives are proposed to boost engagement in the region, such as an alliance of interested companies to source/develop green hydrogen projects in Brazil or a shared talent pool as part of a digital manufacturing ecosystem, as well as the creation of programming schools in Latin America.

Rio de Janeiro Brazil — © Pixabay/David Mark

Download CEO Agenda

Download Resume CEO Agenda as file

A breath of fresh air for a proven dialog format

As part of the German-Brazilian Intergovernmental Consultations on December 4, an addendum to the founding act of the bilateral Working Initiative for Cooperation in Agribusiness and Innovation (AI) was signed in the presence of German Agriculture Minister Cem Özdemir and his Brazilian counterpart Carlos Fávaro. In it, both sides agree to strengthen AI as an exchange platform, to involve new partners and to further develop it thematically.

The aim is to further intensify the dialog on innovative approaches to increasing sustainability and involve other players from the entire value chain.

The AI was founded in 2003 and receives its mandate for three years from the German-Brazilian Joint Commission on Economic Cooperation. Jordi Tormo, Vice President Business Management Industrial Formulators Europe at BASF SE, chairs the AI on behalf of German industry, which is coordinated by LADW and BDI. His Brazilian counterpart is Ingo Plöger, Vice President of the Brazilian National Agribusiness Association (ABAG). The political side is chaired by representatives of the respective ministries, the Federal Ministry of Food and Agriculture (BMEL) and the Brazilian Ministry of Agriculture (MAPA). The AI meets at least once a year in the context of the German-Brazilian Economic Meeting.

Signing ceremony Addendum — Federal Minister of Agriculture Cem Özdemir, his Brazilian counterpart Carlos Fávaro, Ingo Plöger, ABAG Vice President, and Rafael Haddad, LADW Managing Director © BMEL

Federal Minister of Agriculture Cem Özdemir — © BMEL