Student name:

Lesson no. and topic: Lesson 5 – International Trade Theory

Activity number: 3

Name of the country: Germany

Flag of the country:

Answers to the questions:

1. How important is trade to the nation (trade as a share of GDP)?

Answer: According to some statistics, Germany's foreign trade accounts for 88.1%of the country's GDP,
and the country has been the world's third largest importer and exporter since last year. Moreover, in
2019, Germany exported products worth USD 1,489 billion (a drop of 4.5 percent year-on-year),
importing a total of USD 1,234 billion (-3.9 percent-WTO). Germany is a net importer of commercial
services. In 2018, the country exported USD 335 billion worth of services, while imports were somewhat
higher, at USD 362 billion (data by WTO). Meanwhile, Germany’s main trading partner is the European
Union which accounted for 68.2 percent of exports and 67.8% of imports (BMWi). In terms of single
countries, the major export destinations were the USA (8.9%), France (8%), China (7.3%), the
Netherlands (6.2%), and the UK (5.9%). Further to that, Germany's economy is the fourth biggest in the
world, accounting for one-quarter of the European Union's GDP (24.7%) in 2019. Germany is also the
US's biggest European trade partner and the country's fifth-largest export market. Unfortunately, the
COVID-19 pandemic interrupted the global economy, which had an effect on Germany as well. German
exports are expected to decrease by 12% in 2020, according to IMF estimates, while imports will follow
a similar trend (-8.4 percent).

After considering all of these facts and data, I came to the conclusion that commerce is very
essential to Germany. Besides this, it seems that trading activities, and particularly their GDP, provide
nearly all of the country's resources. Also, with regards to their current GDP in 2020, Germany have an
enormous figure amounts to 3,806,060.14$ which really illustrates the significance of trading for them.
Therefore, I believe Germany has truly placed not only importance for it but also on preserving their
nation’s image, particularly when it comes to trading and truly trading is an important factor for
Germany.
Data source: Santander and trade markets (export enterprise, 2020) | International Trade Administration – Official
website
2. What products and services does it export and import?

Answer: With respect to goods and services they carry out within or outside their nation, Germany has
some of the typical kinds of items exported or imported by other countries. Moreover, according to
Observatory of Economic Complexity (OEC) which is an online data visualization that focuses on the
geography and dynamics of economic activities. Germany (2019) was the world’s largest exporter of cars
($145B), vehicle parts ($62.9B), packaged medicines ($56.8B), centrifuges ($13.7B), and electrical control
boards ($13.7B). On the other hand, the top imports of Germany are cars ( $75B), vehicle parts ($41.1B),
packaged medicaments ($30.5B), crude petroleum ($29.4B), and refined petroleum ($23.5B). Besides
that, Germany was also the world’s biggest importer of Nitrogen Heterocyclic Compounds ($17.9B), Ball
Bearings ($4.4B), Cheese($4.37B), Large Flat-Rolled Stainless Steel ($3.71B), and Oxygen Amino
Compounds ($3.3B)
Data source: https://oec.world/en/profile/country/deu - Observatory of Economic Complexity (OEC)

3. Is there a concerted effort to stimulate the economy by promoting exports? Support your answer.

Answer: I believe there isn't any, based on what all of the credible data indicates in terms of their
economy. These amazing statistics and figures say it all: their present situation and economic resources
are more than adequate to continue their growth and improvement as a nation. Since, they are one of
the world’s biggest exporter and importer particularly in terms of their current GDP. I also believe that
no intentional effort is required; nevertheless, there may be a few efforts that are still required in order
to improve and raise their profits, particularly on these trading issues. Further, according to World Trade
Organization, its international trade values are about 1.2 million USD for imports and 1.4 million USD for
exports, with a total export of 1,327.6 billion euros and a total import of 1,041.1 billion euros (Federal
Statistical Office of Bundesamt). It really shows how well-maintained their economy is, to the point that
Germany was in a strong economic position prior to COVID-19. Thus, I think there is no concerted effort
needed in order to stimulate their economy through promoting exports.
Data source: Destatics – Statistisches Bundesamt | Santander and trade markets (export enterprise, 2020) | World
Trade Organization

4. With whom does the nation trade?

Answer: Germany, the world's third-largest exporter after China and the United States, transported
US$1.378 trillion worth of products across the world in 2020, according to some sources. Moreover, this
is a 3.4% increase since 2016, but a 7.3% decrease from 2019 to 2020. This monetary amount reflects a
7.4 percent increase above global exports projected at $18.709 trillion a year ago in 2019. Using a
continental lens, Germany exported 66.1% of its total value to European nations, while 19.1% went to
Asian importers. Another 10.3% of German exports went to North America. Accordingly, here are some
of the Germany’s top trading partners: United States US$118.8 billion (8.6% of Germany’s total exports),
China $109.8 billion (8%), France $103.8 billion (7.5%), Netherlands $89.1 billion (6.5%), and United
Kingdom $76.4 billion (5.5%). Going in to its imports, Germany’s importing mostly from Netherlands
$106B, France $76.2B, Belgium $68.9, China $96.9B, and Poland $68.4B.

Furthermore, In May 2021, an increase in exports to the United States (€2.62 billion or 40.5
percent), France (€2.24 billion or 36.5 percent), and Poland (€2.1 billion or 51.3 percent) was primarily
explained by an increase in product exports of motor cars and motor caravans (€4.22 billion or 94.9
percent), chassis, bodies, engines, and so on for motor vehicles (€2.79 billion or 73 percent), and
machinery for (€2.79 billion or 73 percent).In May 2021, a rise in imports from the Netherlands (€1.82
billion, or 27.3 percent), Poland (€1.63 billion, or 41 percent), and Belgium (€1.61 billion, or 59.8%)
accounted for the majority of the increase in Germany's year-over-year imports.

Data source: https://www.worldstopexports.com/germanys-top-import-partners/ Central Intelligence Agency, The

World Factbook Country Profiles. Accessed on February 22, 2021 Forbes,  Global 2000 rankings, The World’s
Biggest Public Companies. Accessed on February 22, 2021 | https://oec.world/en/profile/country/deu

5. Is it dependent on any particular nation for trade, or does another nation depend on it? Discuss.

Answer: In the middle of the Covid-19 outbreak, Germany's reliance on China has been a subject of
attention and debate among the German people. Dependence on China, especially in the manufacture
and delivery of critical medical goods, has been cause for considerable concern. Moreover, Germany has
long known how to take advantage of the benefits of globalisation. Today, exports of products and
services account for approximately half of the country’s value added. One in four jobs relies on exports;
in industry, this is true for much more than any other employment. Exports are not the sole important
element here. As a manufacturing country, Germany also largely relies on affordable, high-quality
imports. According to WTO statistics, approximately 25%of the value added in German exports in
products was directly due to foreign suppliers in 2015. As a result of these facts, it is clear that Germany
is very reliant on another nation, especially when it comes to trade. According to certain statistical data,
China ranks first in terms of suppliers or importers, with a 10% share of imports to Germany, while the
United States ranks first in terms of consumers or major partners in terms of exporting products, with an
8.9% share. In addition, during this epidemic, Germany benefitted from its connections with China.
China has surpassed the United States as Germany's largest trade partner and has become a significant
market for many of the country's businesses.
Data source: Santander and trade markets (export enterprise, 2020) | https://www.echo-wall.eu/currents-
context/how-dependent-germany-china | https://www.nytimes.com/2021/03/19/business/china-germany-
economy-trade.html

6. Does the nation trade only with high-income countries or also with low- and middle income
countries? Name the countries

Answer: Based on some articles and statistical data, Germany really have a lot of trading partners across
the globe. I think these trading partners since most of them have good economy standing and also have
high income level. Therefore, I think Germany’s trading partners mostly are high-income countries and
hence they only trade with high-income countries. Moreover, these are the following countries
according to worldstopexports, the United States, a high-income country, is at the top of the list.
Following China, which is also a high-income country, comes France, which is both wealthy and high-
income. Following France is the Netherlands, which is likewise a high-income country, and the United
Kingdom, which is also among the countries with the largest economies and hence a high-income
country. After, United Kingdom comes Poland, which is categorized as a high-income economy by the
World Bank. Then there are these countries, all of which are high-income countries. Italy, Austria,
Switzerland, Belgium, Czech Republic, Spain, Hungary, Sweden, and Russia.
Data source: https://www.worldstopexports.com/germanys-top-import-partners/ | The World Bank

UK – High

Poland - High

Italy - High

Austria – High

Switz - High

Belgium - High

Czech – High

Spain - High

Hungary – High

Sweden - High

Russia -