The export fetish

Look at the following list of countries and decide why they are in this order:

1. France (€97 billion)
2. United States (€71 billion)
   
3. United Kingdom (€67 billion)
   
4. Netherlands (€66 billion)
   
5. Italy (€64 billion)
6. Austria (€54 billion)
   

The headline should have given you a clue. We're talking about exports — in this case, Germany's.

Those countries were the top destinations for German exports in 2008, according to the provisional trade statistics. Or, to put it another way, they are the countries that imported the largest amount of German goods.

For the sake of completeness, here are the top six countries from which Germany imported goods:

1. Netherlands (€72 billion)
2. France (€67 billion)
3. China (€59 billion)
4. United States (€46 billion)
5. Italy (€46 billion)
6. United Kingdom (€44 billion)

In total, Germany exported goods worth €995 billion in 2008 (up 3.1 per cent of 2007) and imported goods worth €819 billion (up 6.3 per cent)). This meant a trade surplus of around €176 billion, less than 2007's record figure of €195 billion.

What can we learn from these figures? Here are a number of points:

• Germany exports and imports goods to and from similar countries. China is an exception, being much more important to Germany as a source of imports than as a market for exports (11th place).
• Germany, which sells more than 40 per cent of its gross domestic product (GDP) as exports, is highly dependent on the economic situation in France, the US and the UK (and other EU countries).
• Two of Germany's top three export markets are English-speaking — hence the need to communicate well in English with native speakers as well as other non-native speakers.

Although Germany loves its title as export world champion, there is nothing intrinsically good about a trade surplus. You are letting other countries enjoy the fruits — or, rather, cars — of your production, albeit in exchange for money.

As the world economy and world trade contract, Germany will feel the pain especially intensely. It will pay the price for its export fetish.

What Germany needs to do (like China) is to increase domestic demand to balance its economy better and reduce the trade surplus via higher imports.

Germany also needs to support a coordinated world expansion if its export industries (and GDP) are not to collapse further.