Economically, Argentina and Brazil are still in a delicate situation and want to see more investment from Germany and Europe in general. These commodity-exporting countries complain about EU trade protectionism in the agricultural sector. For their part, European investors want to see tax reforms, more transparency in the public sector and an improvement in intellectual property rights protection from Latin American governments.
German Chancellor Angela Merkel visited Argentina and Mexico
earlier this month in advance of the G-20 summit meeting scheduled to take
place in Hamburg in July. While discussing trade and investment between Latin
America and Europe, she also offered a subtle rebuke of U.S. President Donald
Trump, extolling the virtues of the Paris climate agreement and cooperation in
an “interconnected world.” In an email interview, Dr. Claudia Zilla, head of research for the Americas at the
German Institute for International and Security Affairs in Berlin, discusses
Germany’s current engagement with Latin America and the areas in which it could
deepen.
WPR: What have been the traditional areas of cooperation and engagement
between Germany and Latin America, and how have trade and political relations
evolved in recent years?
Claudia Zilla: Germany and Latin American countries have framed their relations
in the general terms of cultural affinity, meaning common values and interests.
In the past decade, Germany has stressed its aim of expanding economic ties and
promoting investment and trade in both directions, fostering scientific and
technological exchanges, and promoting cooperation on global challenges in the
areas of the environment, security and finance.
While German development aid has focused on several low-income Latin American
countries, political dialogue and economic cooperation have centered on the
region’s three G-20 member states: Brazil, Mexico and, to a lesser extent,
Argentina. Germany and Brazil entered into a “Strategic Partnership” in 2002,
and Chancellor Angela Merkel and Brazil’s then-President Luiz Inacio Lula da
Silva signed an “Action Plan” in 2008. Brazil is the only Latin American
country with which Germany currently enjoys a strategic partnership.
Compared to other regions, Latin America is not a priority for Germany’s
foreign policy. First, it is a geographically distant region that is free from
nuclear weapons as well as interstate and—after the signing of Colombia’s peace
deal—civil armed conflicts. Moreover, Germany is not dependent on Latin
American natural resources. German and Latin American politicians show little
coordinated engagement at the international level, and overall cooperation on
global issues is still low.
WPR: What was the purpose of Merkel’s recent visit to Argentina and Mexico,
and to what extent does her emphasis on trade and climate change reflect an
attempt to counter the rhetoric and policies of Donald Trump?
Zilla: Germany will be handing over the G-20 presidency to Argentina next year.
Thus, Merkel chose to visit two of the three Latin American states that are
members of this group and that are also among the largest economies in the
region. Brazil was left out because of its ongoing political turbulence and the
crisis afflicting the government of President Michel Temer.
With respect to Trump, Merkel’s speeches in Argentina and especially in Mexico
were quite moderate compared to her rhetoric in the context of the German
electoral campaign after the G-7 summit in May. During her visit to Latin
America, although she stressed the importance of free trade and environmental
protection, she also rejected the concept of a zero-sum game and made clear
that it is necessary to work with rather than against the U.S.
At the same time, she acknowledged the strong interest of her hosts in pursuing
free trade with the European Union. The government of Argentine President
Mauricio Macri is making efforts to open and boost the economy by attracting
investment and liberalizing trade. A Mercosur-EU association agreement is part
of this new approach. Meanwhile, Mexican President Enrique Pena Nieto is
looking to diversify the country’s economic partnerships in order to reduce its
dependency on the U.S. While the current comprehensive free trade agreement
between Mexico and the EU entered into force in 2000, today more than 80
percent of Mexican exports still go to the U.S. market.
WPR: How do Latin American countries stand to benefit from expanded and
deeper ties with Germany, and what are the avenues for and obstacles to doing
so?
Zilla: There is certainly unexploited potential in relations between Germany
and Latin America. So far, cooperation has been most dynamic in cultural, technological
and scientific fields, but there is still room for this cooperation to deepen.
Challenges facing the EU have hindered further development of these ties. The
rise of nationalist and populist politicians, Brexit, the migration crisis and
terrorism have all compelled Germany to focus on European affairs. These
challenges have caused Europe to lose some of its allure for Latin America,
while at the same time, some Latin American governments with nationalist and
populist tendencies have distanced themselves from traditional partners in the
West. Changes of government in Latin America, for example in Argentina, Brazil,
Ecuador, Peru and Uruguay, may pave the way for a rapprochement.
Economically, Argentina and Brazil are still in a delicate situation and want
to see more investment from Germany and Europe in general. These
commodity-exporting countries complain about EU trade protectionism in the
agricultural sector. For their part, European investors want to see tax
reforms, more transparency in the public sector and an improvement in
intellectual property rights protection from Latin American governments.
