Brazil and Germany

On the surface, it would seem that Brazil and Germany present many opportunities for fruitful bilateral trade and investment. In terms of comparative advantages, the Brazilian export portfolio tacks heavily towards precisely the raw materials German manufacturers require—and lack domestically. Conversely, German producers specializing in high-end technological and knowledge-based goods could find an expanding consumer base both in the burgeoning Brazilian middle class and in business-to-business trade with Brazilian partners. In terms of investment, Brazil would appear to be a prime destination for surplus German savings. For example, Brazil faces an infrastructure deficit while German firms have achieved particular sophistication in this field. For German firms, investment in this sector in Brazil can offer returns currently unavailable in continental Europe.