On Sunday at the opening of the Hanover industrial fair, German Chancellor Friedrich Merz and Brazilian President Luiz Inacio Lula da Silva urged stronger ties between Europe and South America’s largest economy, framing closer cooperation as central to a rules-based global trading system.
Both leaders welcomed the EU-Mercosur free trade agreement, which is due to enter into force on May 1. Merz said the move underlines commitments to multilateralism and to an economic order governed by rules, adding that the aim is cooperation with as few tariffs as possible - ideally none at all.
Lula, whose country is this year’s partner nation at the world’s largest industrial trade fair in Hanover, framed Brazil as a dependable partner for Europe, particularly when it comes to supplying raw materials. He noted that only about 30% of Brazil’s mineral potential has been mapped, while highlighting the country’s existing resource strengths: the world’s largest reserves of niobium, the second-largest reserves of both graphite and rare earths, and the third-largest reserves of nickel.
"These raw materials must serve as a driver of economic and social development," Lula said, urging greater technology transfer and the expansion of processing capacity within Brazil.
Beyond mineral resources, Lula said he intended to cover the full spectrum of economic cooperation with Merz, explicitly including areas such as artificial intelligence, critical minerals and data centers. The two governments are scheduled to hold German-Brazilian consultations on Monday to advance those discussions.
Context and implications
Leaders presented the activation of the EU-Mercosur agreement as a tangible step toward lowering trade barriers and strengthening institutional ties. Lula’s emphasis on mapping and processing capacity points to a dual objective: to leverage Brazil’s raw-material advantages while boosting domestic industrialization through technology partnerships.
Discussions slated for government consultations could address practical measures across industrial and technology sectors, though the public remarks focused on broad goals rather than detailed implementation steps.
Summary takeaway
- Merz and Lula called for closer EU-Brazil cooperation at Hanover, welcoming the EU-Mercosur deal effective May 1.
- Lula highlighted Brazil’s substantial mineral reserves and the limited mapping to date, and he pushed for technology transfer and more in-country processing.
- Planned German-Brazilian consultations on Monday are intended to take forward talks that include AI, critical minerals and data centers.