German Chancellor begins first trip to South America to strengthen relations.

(Reuters) - German Chancellor Olaf Scholz heads to Argentina on Saturday to begin his first trip to South America, as his government seeks to reduce economic dependence on China and strengthen relations with democracies around the world.

During the three-day trip, Scholz, a Social Democrat, will visit the three largest economies in the region - Argentina, Chile, and Brazil.

One of the priorities on the agenda will be the war in Ukraine and the lessons learned from it – such as, for Berlin, a greater awareness of the need to reduce economic dependence on authoritarian states. Germany's dependence on Russian gas generated an energy crisis after relations deteriorated due to the war initiated by Moscow.

Europe in general is racing to reduce its dependence, especially on China, for minerals essential for the transition to a carbon-neutral economy, and South America is rich in these minerals.

"These three countries are all interesting partners for diversifying our overall economic relations, but also for our commodity supply," a German government official said on Friday.

Regarding competition with China, which has invested heavily in the region over the past decade, the official said that Germany simply needs to be more proactive and also better prepared to embrace sectors it has previously avoided.

“For example, lithium mining – that’s a challenging task, especially in relation to social and environmental standards. And in the past, we probably avoided it… but we can’t afford to do that if we want to sustain ourselves.”

Argentina and Chile are located in the so-called "lithium triangle" of South America, which holds the world's largest reserves of the metal used in batteries.

The German Chancellor is accompanied by a delegation of about a dozen executives from various sectors, as well as the Deputy Minister of Economy, Franziska Brantner.

BRAZIL

In Brazil, the final leg of the trip, Scholz will be alongside the Minister of Development, Svenja Schulze, due to the renewed impetus for joint projects since the election of Luiz Inácio Lula da Silva, who promised a revolution in Brazil's climate policy.

Deforestation in the Amazon has reached its highest levels in 15 years under the government of far-right president Jair Bolsonaro.

Lula's new focus could help pave the way for a free trade agreement between the European Union and Mercosur – which is also on Scholz's agenda for talks with regional leaders.

EU ambassadors have already told Brazil that the free trade agreement with Mercosur, agreed in principle in 2019, will not be ratified unless there are concrete measures to halt the ever-increasing destruction of the Amazon rainforest.

Scholz's visit is also a strong show of support for Lula, following Bolsonaro supporters attacking the Three Powers buildings in Brasília on January 8, just one week after his inauguration.

The German Chancellor will speak about this and will also visit memorials to the victims of the military dictatorships in Chile and Argentina.