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 is the largest trading partner for 7 of the 10 new EU member states) 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 sixth-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 $10.26 billion in 2005, while Canadian exports rose from $2.20 billion in 1990 to $3.23 billion in 2005.

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 44 percent in 2005. The following priority sectors have been identified as offering strong prospects for continued growth for Canadians exporters: Advanced Material and Nanotechnology, Aerospace and Defence, Agri-Food, Arts and Cultural Industries, Automotive, Consumer Products, Health Industries, ICT (Information and Communication Technology), Machinery and Plant Engineering, Marine Industries, Renewables and Environmental Technologies, Technology and Innovation Transfer, Wood Products and Construction.

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 one of the largest net direct investors in the world. 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 $9.4 billion in 2005, Germany is the sixth-largest foreign direct investor in Canada. At the same time, Canadian firms hold $7.7 billion in assets in Germany, making that country the eleventh-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.