What is the German chancellor looking for on his tour of South America?

When German Chancellor Olaf Scholz lands in South America over the weekend for the start of his tour of Brazil, Chile and Argentina, he will likely be carrying an old black briefcase in his hand that has been his faithful companion for decades.

Articles have been written about this threadbare briefcase in the German press and there has been speculation about its origin and content. So much so that Scholz himself decided to settle the doubts directly: he assured that he bought it about 40 years ago when he was a young lawyer, he even takes it on vacation and carries his glasses, newspapers and work documents in it.

In the case of the trip to South America, some of those documents will possibly mention the “strategic importance” of the region for Germany, the deep but not always easy economic relations, the close ties on cultural and scientific issues, or the challenges in terms of peace. and human rights.

This is without counting the ramifications of the war in Ukraine, a conflict that directly affects Europe but also impacts Latin America.

Cooperation in renewable energy

One of those ramifications is the growing German interest in diversifying its energy sources. This responds to its objective of minimizing its previous and highly problematic dependence on Russia. In South America, this interest has translated, for example, into an increase in Colombian coal imports or, in the Southern Cone, in the search for cooperation in renewable energy. This was something that Scholz himself recognized when he received Argentine President Alberto Fernández in Berlin in May of last year.

“Above all, we agree that our countries want to collaborate closely in the energy sector,” said the foreign minister. “Argentina has enormous potential, especially for renewable energy and for the production of green hydrogen.”

This search for new or deeper energy relationships explains, at least in part, why Scholz will travel to South America in the company of a delegation of 14 businessmen.

“That Scholz only travels with representatives of the business community is very much related to the immediate problem of energy and resources,” Professor Marianne Braig of the Latin American Institute at the Free University of Berlin told France 24.

important economic partners

But in Scholz’s briefcase there will also likely be documents emphasizing that the relationship goes beyond immediate energy deals.

On the one hand, Germany has close and longstanding relations with the region and especially with Brazil, its main economic partner in South America. According to the Federation of German Industries (BDI), there are about 1,600 active German companies in Brazil. In Sao Paulo alone there are some 800 German companies that have created more than 250,000 jobs.

In Brazil, but also in Argentina and Chile, Scholz and his entourage are scheduled to hold meetings with both political leaders and local businessmen. In Buenos Aires a visit to a Volkswagen plant is planned, while in Santiago Scholz is expected to give a speech at an economic forum.

On the other hand, Scholz’s trip is framed in political and economic dynamics that go beyond the bilateral.

For Germany and the European Union, Latin America is becoming increasingly interesting at a time when Russia is no longer a reliable economic partner and the EU wants to reduce risks in its relationship with China.

“Germany needs to diversify its supply chains and move away from authoritarian states like China, just like other democracies in Latin America,” Amrita Narlikar, president of the German Institute for Global and Regional Studies (GIGA), told France 24.

“This is an important opportunity that German companies could take better advantage of.”

These dynamics could even give new impetus to the controversial trade agreement between the European Union and the Mercosur states (Argentina, Brazil, Paraguay and Uruguay).

“If Olaf Scholz were to offer this broader strategic picture – especially in light of China’s growing presence in Latin America – it could help create a more conducive environment in Europe for the Mercosur-EU free trade agreement,” Narlikar added. On this subject, Scholz explained last year that it is important to make progress, but that agreements on environmental, social and human rights matters are also necessary.

strategic importance

This more global look helps to understand why Germany considers Latin America to be of “strategic importance”, even though some experts believe that Berlin has not paid enough attention to the region.

The German government, however, has indicated that it sees Latin America as an ally on global issues such as the protection of human rights, food security or the fight against climate change.

In this last aspect, government spokesmen assured that it is a “fundamental issue in cooperation with Brazil.” In fact, on Scholz’s agenda is a visit to a national park in that country and a meeting with social and indigenous representatives.

“Most Latin American countries are traditionally good multilateral players,” emphasized Professor Braig in dialogue with France 24.

Or, as the German government put it somewhat cryptically when announcing the South American trip, they are “partners of value in the commitment to a rules-based, multipolar international order.”

In a practical way, this was evidenced by the fact that Argentina, for example, had been invited to the G7 summit chaired by Germany last year. Or that the three countries on the tour would vote, like Germany, in favor of United Nations resolutions condemning Russian actions in Ukraine.

Scholz himself referred to this joint position when, last year, he thanked President Fernández for “the firmness with which Argentina supported the condemnation of Russia in international forums.”

Scholz is likely to reiterate that support during his South American tour. A tour that comes at a time when the war in Ukraine is far from over and Berlin is increasingly emphasizing the importance of having allies.