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WORLD BUSINESS

Germany still the export achiever

By Geoff Hiscock
CNN Asia Business Editor

story.chirac.merkel2ap.jpg
Merkel's first outside meeting as chancellor was with Chirac.

SPECIAL REPORT

FACT BOX

WORLD'S TOP TRADERS
Total merchandise imports and exports, 2004
1. United States $2344.3 billion
2. Germany $1629.2 billion
3. China $1154.5 billion
4. Japan $1020.3 billion
5. France $914.2 billion
6. UK $810.4 billion
7. Italy $700.2 billion
8. Netherlands $677.5 billion
9. Canada $596.3 billion 
24. India $172.8 billion
Source: WTO, October 2005

FACT BOX

TOP SERVICES TRADERS
Total services imports and exports, 2004
1. United States $578.3 billion
2. Germany $326.9 billion
3. UK $307.9 billion
4. Japan $228.9 billion
5. France $205.9 billion
6. Italy $162.6 billion
7. Netherlands $145.4 billion
8. Spain $138.2 billion
9. China $133.7 billion
16. India $80.5 billion
Source: WTO, October 2005

FACT BOX

KEY POINTS ABOUT THE WTO

Membership: The World Trade Organization has 148 member nations, including China, which joined in December 2001. There are also 33 observer nations, including Russia, Ukraine, Saudi Arabia, Iran and Iraq.

Key players: European Union, United States, China, Cairns Group (agricultural producers), Japan, Brazil, India.

Doha: The Doha agenda takes its name from a ministerial meeting in the Qatari capital in November 2001, at which it was agreed to launch new trade negotiations.

Cancun: The September 2003 ministerial meeting at the Mexican resort of Cancun broke up without agreement on agriculture and the "Singapore issues", which deal with trade and investment facilitation and transparency in government procurement.

Hong Kong: Key issues for discussion at the Hong Kong ministerial meeting include agriculture, services, textiles and clothing, intellectual property rights, subsidies, rules of origin, customs valuation, anti-dumping, investment, sanitary measures and technical barriers.

Potential stumbling blocks: Agricultural reform, intellectual property rights, particularly for medicines.

(CNN) -- Which of these three nations is the world's top exporter: China, Japan or the United States? The answer: none of the above.

World trade's quiet achiever is Germany, which regularly tops the export tables with its steady sales of industrial machinery, automobiles, chemicals, pharmaceuticals, advanced medical devices and information technology software and hardware.

From high-speed trains for China to luxury limousines for North America and heavy construction equipment for resources projects in outback Australia, German names like Siemens, Schering, Hochtief, DaimlerChrysler, Porsche, BMW, Volkswagen, Bosch, Hella, SAP and Deutsche Bank are global leaders.

Last year, German merchandise exports jumped 21 percent to $912 billion, almost $100 billion more than the United States ($819 billion) and well ahead of China and Japan.

Because the United States is such a huge buyer of goods from other countries -- its imports in 2004 reached $1,525 billion, compared with $717 billion for Germany -- the U.S. has the biggest total merchandise trade volume of $2,344 billion.

That puts it well clear of Germany's $1,629 billion, and third-placed China on $1,154.5 billion. And in commercial services trade, the U.S. is even more dominant, with total imports and exports of $578 billion last year, compared with $327 for Germany and $308 billion for third-placed Japan.

But it is Germany that has the merchandising muscle, accounting for 10 percent of total world exports. About one in four German jobs depends on exports, and a third of German GDP is generated through exports.

Its most important trade partner is France -- a fact reflected in new Chancellor Angela Merkel's decision that her first visit outside the country would be to see French President Jacques Chirac.

Merkel has pledged to restore German economic growth, cut the budget deficit and create more jobs -- a tough challenge, given that most economists expect growth will be below 1 percent this year.

There are some signs that Germany's sluggish performance of recent years is about to improve a little, with the GDP growth outlook for 2006 put at 1.3 percent by forecasters such as the Economist Intelligence Unit. But data released in late November shows domestic demand remains weak, a proposed value-added tax could crimp it further, and the jobless rate is still above 11.5 percent -- the highest in the euro zone.

In contrast, exports should rise by 4.5 percent to 5 percent next year, according to the EIU. So it is exports that will continue to underpin Germany's economy.

Its reputation remains undiminished as a maker of high quality equipment and machinery across a range of industry sectors. It is a global leader in biotechnology, information technology and chemicals. And its services sector -- including banking, insurance, transportation and tourism -- while only half the size of the United States, is still the second largest in the world.

Germany has close trade relations with the other members of the European Union, with almost 72 percent of German exports staying in Europe. The main buyers of its goods and services after France and the United States include the UK, Belgium, Netherlands, Italy and Spain. Poland, Hungary and the Czech Republic are becoming important customers.

Germany's competitive export sector does well when there is an upsurge in world trade. With China, India and the U.S. still driving much of the global expansion and signs of demand on the rise in Japan and the euro zone, the consensus outlook for 3.5 percent global economic growth in 2006 favors Germany.

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