Tension between Germany and Brazil
Author: Thomas Wandler
President’s son causes discouragement
Normally, the German-Brazilian Business Days are the flagship conference in terms of harmony. But the last meeting was not so relaxed”. There have seldom been so many tensions in the relationship between the states as at present,” said Ingo Plöger, president of the Latin America Business Council (CEAL), at the 37th German-Brazilian Business Days in Natal, Brazil’s northeastern city. “This makes cooperation more difficult.” Economic cooperation would continue to take a harmonious course if there were no political conflicts.
The new president Jair Bolsonaro causes a shift to the right in Brazil and receives enormous criticism not only from Germany, but also from the whole EU. Reason is the enormous criticism against Bolsonaro because of the burning Amazon rainforest.
Nevertheless, the common economic policy between Brazil and Germany has never been more important. The reason for this is that after 20 years the EU and Mercosur (Argentina, Brazil, Paraguay and Uruguay) have managed to reach an agreement on a free trade area. Brazil could become a potential trading partner for Germany as it plans to start trading and investing soon.
Concern about the agreement
“We must do everything we can to ensure that the agreement is implemented,” demanded Dieter Kempf of the Federation of German Industries (BDI). This concern is not unfounded, as the representatives of government and industry in Natal do not yet have a good relationship. Instead of talking face to face, they only talked about each other. But at one point they agree: The expansion of trade and investment must not burden social events or the environment. Georg Witschel, the German ambassador in Brasília, stressed that the EU-Mercosur agreement must not lose its importance.
German companies are also increasingly reluctant to plan further investments for Brazil. As a result, German investment values declined and Germany fell to 9th place among foreign investors. Brazil is courteous in this respect and is initiating negotiations on a double taxation agreement, which Germany rejected 15 years ago. “This would be an important step for small and medium-sized enterprises to invest in Brazil,” said Thomas Bareiß, Parliamentary State Secretary in the Ministry of Economic Affairs.
Brazilian Vice President pipes up
Vice-President Hamilton Mourão had dealt extensively with the relationship between Brazil and Germany. Mourão recognized that Brazil was in a crisis. He wants to get his country out of this crisis by increasing productivity through reforms and market liberalization. After the vice-president said that the protection of the Amazon lies in Brazil’s hands, he received great applause.
The third son of the president, Eduardo Bolsonaro, however, was discouraging. He assumed the role of Chairman of the Committee on foreign relations and national defence. But he did this for his own benefit, as he promoted the position of Ambassador to Washington.
Bolsonaro stated that his first objective was the free trade agreement with the USA. As far as Germany is concerned, he shows great respect for car manufacturers and steel producers. He justified this with the fact that Germany produces the best weapons.