German trade engine intact

Despite a weak phase of trade activities in Europe, Germany looks set to reach new export and import volume records throughout 2012, the Foreign Trade and Wholesale Association (BGA) reported in its latest outlook on Tuesday.

It predicted that exports in the current year would total over 1.1 trillion euros ($1.39 trillion), up 4 percent from last year's level. Imports were forecast to rise by 3 percent to a volume worth 929 billion euros, marking a 10 percent increase year-on-year.

BGA President Anton Börner admitted that trade could have been even stronger without the protracted euro area debt crisis, but added companies had been able, by and large, to compensate for losses in Europe with brisk business in the US and many emerging countries.

Protectionism in the firing line

"There's no denying that our exports to Greece in the first half of the year dipped 9.0 percent, to Italy they declined by 8.0 percent and to Portugal by even 14 percent," Börner said in a statement. "But on the other hand, exports to the US climbed 19 percent, while shipments to Russia and China soared by 15 and 9.0 percent respectively."

The BGA upheld its optimism for 2013, saying that this year's expected records could be surpassed again. It cited Germany's robust labor markets and expectations that the world economy would pick up momentum next year.

The association warned against even more restrictive measures being implemented by some European nations and countries outside the continent. Protectionism would only lead to a bigger renationalization drive in many parts of the world and a resulting drop in competitiveness.

The BGA specifically criticized Argentina's current import and currency restrictions as well as EU trade protection instruments against solar modules from China, saying such measures were completely unacceptable.

hg/dr (dpa, dapd, Reuters)