German chancellor calls for speedy conclusion of EU-Mercosur free trade deal

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The German Chancellor, Olaf Scholz, defended on Saturday (28) a quick conclusion of the negotiations on a free trade agreement between the European Union and Mercosur, during the first stop in Buenos Aires of his inaugural trip to the region.

Seeking to reduce Germany’s economic dependence on China, diversify its trade and strengthen relations with democracies around the world, Scholz is visiting Argentina, Chile and Brazil.

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Berlin wants to lessen its reliance on China for essential minerals for the energy transition, making resource-rich Latin America an important partner. The region’s potential for renewable energy production is another attraction.

“There is great potential for further deepening our trade relations, and the possibilities that can come from the EU-Mercosur agreement are clearly significant,” Scholz said at a press conference alongside Argentine President Alberto Fernández.

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Fernández blames European protectionism for delaying the agreement, initially signed in 2019 but not ratified by national parliaments. EU ambassadors have said that Brazil needs to take concrete measures to stop the increasing destruction of the Amazon rainforest accelerated intensely during the government of Jair Bolsonaro.

Berlin hopes that this concern can be put to rest with the election of President Luiz Inácio Lula da Silva, who has promised to recover the country’s environmental policy. Scholz will meet Lula on Monday (30) at the end of his three-day trip.

Russia’s invasion of Ukraine, which triggered an energy crisis in Germany due to Germany’s heavy dependence on Russian gas, raised awareness of the need to reduce economic dependence on authoritarian states.

For Germany to reduce dependence on minerals from China, it will need to embrace sectors it has shunned, a German government official said on Friday.

“Lithium mining for example — it is a challenging task, especially with regard to the environment and social standards,” the official, who is traveling with Scholz, told reporters.

Argentina and Chile are at the top of South America’s “lithium triangle”, which has the world’s largest repository of the metal used in electric car batteries.

About a dozen business executives — including the leaders of Aurubis, Europe’s biggest copper producer, and energy company Wintershall Dea — are accompanying the chancellor.

Fernández said he and Scholz discussed the possibility of attracting German investment into the country’s vast reserves of shale gas, lithium deposits and green hydrogen production.

Source: CNN Brasil

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