Germany, Brazil to deepen trade partnership on raw materials

Germany and Brazil have agreed to deepen their strategic partnership in areas such as raw materials and defence contracts. 

German chancellor Friedrich Merz said he hopes to double the volume of trade with Brazil in the coming years, emphasising the importance of the relationship as a way of diversifying supply chains, reported ZDF. “The closeness between our two countries is more necessary than ever at a time when the world order is changing so fundamentally,” said Merz at a joint press conference with Brazilian president Luiz Inácio Lula da Silva, following consultations between the two governments in Hanover. 

Closer cooperation was also agreed upon in the areas of artificial intelligence, energy, the circular economy, environmental technologies, and agriculture, reported ZDF, alongside the defence sector. Lula highlighted that it is a bidirectional partnership and not a one-sided supply relationship. “We will not accept models that reduce our country to resource extraction simply to satisfy foreign demand,” he said.

The supply of rare earth metals – materials that are needed for the production of laptops, cell phones, and electric motors in wind turbines – is one of the key areas of the partnership, as Germany wants to reduce its reliance on Asia, reported public broadcaster ARD. 

Both Merz and Lula praised the importance of the EU-Mercosur free trade agreement, between the EU and several Latin America countries. An interim version enters into force on 1 May, until the main agreement is fully ratified.

The German economy ministry and European wind industry built a roadmap last year on how to reduce the bloc’s reliance on rare earth metals for use in wind turbines. Canada also positioned itself as a supplier of key materials, including rare earths, to Europe last year.