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The German economy has been hit hard by the economic crisis as its export orientation makes it particularly vulnerable to global downturns. The Ministry of Economy holds that half of Germany’s value-added and one out of four jobs depend on exports. In addition, Germany’s specialization in investment goods magnifies the effect of business cycles. While global trade shrank by 12% in 2009, German exports plummeted by 18%.

In response, the Ministry of Economy has launched a ‘foreign trade offensive’. The initiative is strongly centered on trade promotion: export credit guarantees, foreign trade chambers, trade fairs, politico-economic visits and deal-making support.

But what Germany needs is an agenda for open markts that guides all trade-relevant policies – at home, in Brussels and at the G8/G20. Since most trade policy competences have been delegated to the EU, forceful German support for trade liberalization in Brussels is the key challenge. Three examples illustrate the potential for improvement:

Read more on the website of the ECIPE.

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