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Business

German, American Execs Get Together for Mini-Davos

In what's being dubbed as the German-American answer to Davos, more than 100 chairmen of companies from both sides of the Atlantic are meeting in Washington in an effort to revive their economic ties.

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Execs at a summit in Washington want to oil the 100-year old German-American export machine.

The German-American economic relationship remains as tight as ever despite recent diplomatic tensions between Berlin and Washington. The organizers of a major transatlantic trade summit in Washington on Monday and Tuesday are hoping to exploit the goodwill in the business world and make it spill over into the political realm.

On the eve of the meeting, Chairman Michael Rogowski of the BDI German Federation of Industry called for U.S. President George W. Bush and German Chancellor Gerhard Schröder to meet as soon as possible. "At the very latest, they should have a face-to-face meeting at the G-8 summit in France," Rogowski told the Frankfurter Allgemeine Zeitung newspaper on Monday.

Business leaders from both countries will be coming together in Washington along with leading German politicians including Economics and Labor Minister Wolfgang Clement -- and Bush and Schröder should heed their example, Rogowski said. "Chancellor Schröder and President Bush need to finally start talking again -- the current speechlessness makes no sense."

The business super summit is being organized jointly by the American Chamber of Commerce, the Federation of German Industries and the Association of German Chambers of Commerce and Industry.

A Who's Who of bluechip companies

The idea for the "German-American Executive Summit" originated from Wolfgang Ischinger, Germany's ambassador to the United States, who began planning to bring together German and American business and political leaders even before the current diplomatic imbroglio between the countries began. In the course of a year of planning, the event has swelled into a massive production.

"We want to make it clear that German-American relations rest on a solid foundation in the pillars of business and trade," Ischinger said on Monday in Berlin.

With more than 100 executives attending from companies that represent a who's who of the leading blue chips on Germany's DAX and Wall Street's Dow Jones indexes, the meeting is being touted as the largest bilateral business summit in the history of either country. The heads of Lufthansa, Daimler-Chrysler, Hapag Lloyd, RWE, General Electric, General Motors, Wal-Mart and Citigroup are expected to converge on the Potomac.

The state of German-American business ties are expected to dominate two closed-door roundtable discussions planned for Tuesday. The executives are hoping to develop strategies to fuel economic growth in both countries, which are both perilously close to recession. Economics Minister Clement and United States Trade Representative Robert Zoellick are slated to give the event's main speeches, which they hope will help to dissipate recent political and trade tensions.

Outside of the summit, Clement is also meeting with his U.S. counterparts, Secretary of Commerce Donald Evans and Treasury Secretary John Snow, as well as Federal Reserve Chairman Alan Greenspan.

A fusing economy

Despite the political crisis that's plagued German-American ties in recent months, the business sector has not experienced any ripple effects. On the contrary, the German and American economies have never been as deeply interconnected as they are today. The U.S. remains Germany's largest export market outside of the European Union. It is also Germany's most-important trading partner after France, with a trade volume of over $120 billion last year.

But the ties go even deeper. American firms in Germany employ close to 800,000 people, and German companies operating in the U.S. employ over a million. According to the Washington bureau of the German Office for Foreign Trade, the number of German direct imports to the U.S. grew by 17.6 percent in the first quarter of 2003 compared to the same period a year earlier.

Slouching toward a banana war?

Nevertheless, there are still dark clouds looming over the economic relationship.

The suit filed by the U.S. at the World Trade Organization last week calling for a lifting of the EU's moratorium on imports of genetically modified foods could lead to a trade war if punitive duties are imposed on European goods in retaliation. The consequences would be negative not only for Germany, but for the entire European Union.

In his Frankfurter Allgemeine Zeitung interview, Rogowski called for the EU to lift the moratorium. He also warned of other pitfalls that face executives at the meeting, including European complaints about protectionist steel tariffs imposed by the U.S. and tax shelters for American companies doing business overseas.

There are glitches in the relationship to be sure, but the executives gathering in Washington will at least be able to breathe easier knowing that the diplomatic crisis between Berlin and Washington will likely end before its side effects cross over to the business world. Signs of that were already apparent on Monday, as U.S. Vice President Dick Cheney said he would open up his schedule for a meeting with Clement.

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