Frankfurt, 27 January 2023 – On the occasion of German Chancellor Olaf Scholz's trip to Argentina, Chile and Brazil, Ulrich Ackermann, Managing Director of VDMA’s Foreign Trade Department, says:

„The Free Trade Agreement between the EU and the Mercosur states must now finally be implemented after years of standstill! We hope that the inauguration of Brazilian President Lula da Silva and the start of the Swedish EU Presidency will give new momentum to the entry into force of the agreement. Because time is pressing. Germany and the EU must prove with facts their interest in the Mercosur region, which also includes Argentina and Brazil - both countries that Chancellor Olaf Scholz is now visiting. 

Closer cooperation with Chile also offers great opportunities for Germany. Negotiations with Chile to modernize the Free Trade Agreement were recently concluded. Germany should significantly increase its engagement in joint energy and infrastructure projects in the country. To this end, Germany and the EU should use all funding instruments to ensure that China does not completely dominate the market with its technologies and standards.“

Argentina and Brazil in particular have some catching up to do in terms of closer cooperation. The agreement in principle between the EU and the Mercosur members for a Free Trade Agreement was reached more than three years ago but has still not been implemented. The Agreement provides for tariff reductions and a level playing field. In Mercosur, the European machinery sector currently faces the highest tariff burdens in the world. The dismantling of trade barriers also increases the chances for Brazil and Argentina to be better integrated into international value chains.“

A photo of Ulrich Ackermann, Managing Director of VDMA’s Foreign Trade Department, can be found here.

The VDMA represents more than 3,500 German and European mechanical and plant engineering companies. The industry stands for innovation, export orientation and SMEs. The companies employ around 3 million people in the EU-27, more than 1.2 million of them in Germany alone. This makes mechanical and plant engineering the largest employer among the capital goods industries, both in the EU-27 and in Germany. In the European Union, it represents a turnover volume of an estimated 770 billion euros. Around 80 percent of the machinery sold in the EU comes from a manufacturing plant in the domestic market.