Trade with Germany
Germany has the largest economy in the European Union and the third largest in the world. It is a major source of direct investment and the second-largest buyer of tourism services. As the EU's industrial locomotive and a significant participant in Eastern European economies, Germany's financial health has implications far beyond its own border: it is the world's second-largest importer.
Canada's trading relationship with Germany is generally trouble-free, with few irritants. Germany is Canada's fifth-largest export market and ranks sixth among Canada's suppliers. Canada's bilateral trade with Germany has grown considerably in the past decade: Canadian imports from Germany rose from $3.83 billion in 1990 to $7.77 billion in 2000, while Canadian exports rose from $2.20 billion in 1990 to $3.15 billion in 2000.
Although the Canadian share of the German import market
has decreased, the composition of Canadian exports to
Germany has changed considerably: raw and processed
materials and semi-manufactured products have decreased
markedly, while the share of the value-added finished
goods grew from 24 percent in 1987 to over 50 percent
in 2000. The following priority sectors have been identified
as offering strong prospects for continued growth for
Canadians exporters: Information Technology, Communications
and Multimedia; Aerospace; Residential Housing; Agriculture
and Agri-Food; Cultural Industries; Industrial Machinery;
and Health Industries.
The major Canadian exports to Germany in 2000 were pulp ($673m), machinery ($586m), aircraft ($317m), iron ore ($233m), medical instruments ($190m), and electrical machinery ($176m). Canada's main imports from Germany in 2000 were machinery ($2.4b), vehicles ($1.5b), electrical machinery ($622m), pharmaceuticals ($503m), and medical instruments ($469m).
Germany is host of the world's oldest, largest and most important trade fairs. As more than ninety percent of new products and technologies are introduced into the German market via trade fairs, it is highly advisable to Canadian firms to exhibit at and /or visit the relevant fairs; as many of these are truly international, Canadian exporters can also establish contact with potential customers from many other countries during these events.
Economic ties between our two countries are strong, but a concerted effort must be made to render them stronger still. Germany is not only the world's third-largest economy and Europe's economic and industrial powerhouse, but also the largest net direct investor in the world, with investment abroad averaging about $45 billion annually, or about nine percent of the world total. Canada receives only a tiny fraction of this massive amount. With its favourable cost structure, highly-educated workforce, membership in NAFTA, European orientation, and fiscal and monetary stability, Canada should be an attractive destination for German investment. The new Canada-Germany Double Taxation Agreement, signed in Berlin in April 2001, will help to promote investment in both directions.
With estimated assets of over $7 billion in 2000,
Germany is the sixth-largest foreign direct investor
in Canada. At the same time, Canadian firms hold $3.2
billion in assets in Germany, making that country the
seventeenth-largest destination for Canadian foreign
direct investment worldwide. Most multinational German
companies are represented in Canada, including such
well- known names as Bayer, BASF, Siemens, Daimler-Chrysler,
Mannesmann and Thyssen-Krupp. The majority of the six
hundred German subsidiaries in Canada, however, are
small to medium size ("Mittelstand") firms,
with 1,500 locations throughout the country. Many Canadian
companies have holdings in Germany, to take advantage
of market opportunities there and in surrounding countries.
Notable investors include Alcan, CAE Electronics, Bombardier,
Pratt and Whitney, Trizec Hahn and Magna.
Visit the office of the
Trade Commissioner Service in Germany.
|