The annual balance for 2020 is “bleak”, according to the foreign trade association. The previous year’s crisis level will only be reached again in 2022.
Dhe consequences of the corona pandemic weigh heavily on German foreign trade and prevent a rapid return to pre-crisis levels. Even if the industry association BGA is cautiously forecasting an increase of up to 13 percent for next year, the export slump in the current year is proving to be a severe blow to the office: “We won’t reach the pre-crisis level until 2022, probably in the first quarter, in any case until the summer, ”said Foreign Trade President Anton Börner on Tuesday. The annual balance for 2020 turns out to be “bleak” both in foreign trade and in wholesaling.
In view of the renewed lockdowns in Europe, the Federal Association of Wholesale, Foreign Trade, Services (BGA) expects an export decline of at least 12 percent by the end of the year. US business has so far collapsed by almost 16 percent and Great Britain anticipated the consequences of Brexit. Exports there have so far decreased by 18.5 percent. Even if the EU’s agreement on a trade agreement with the United Kingdom means there is a prospect of a “soft Brexit”, the companies face trouble: “The bureaucratic effort, the long uncertainty about future cooperation and the loss of the freedom of goods and people European domestic market represent an enormous burden in an already difficult situation, ”warned Börner.
At the same time, he and American President-elect Joe Biden hope that multilateralism will return. “Joe Biden stands for more predictability and reliability. The race for new trade sanctions and higher customs barriers should also be over. “
As an umbrella organization, the BGA represents an industry with around 125,000 German companies. Börner said that they were “largely” satisfied with the previous crisis policy. Around 40 percent of companies suffered a significant drop in sales as a result of the first lockdown. After many companies were still able to fall back on their reserves in the first phase, over 44 percent now see themselves more severely affected by the second, partial lockdown. In Börner’s view, however, it is important to concentrate further aid “sparingly” on those affected and not on entire sectors, because in most cases these are far too heterogeneous.
He has no understanding for the upcoming supply chain law, which should be carried out “single-handedly and without dialogue with the partner countries”. The law will mean that smaller suppliers with fewer resources will fail because of the “immense bureaucracy” and will withdraw: “There will be further market concentration – and medium-sized companies are the losers again.”
As part of global value chains, German SMEs are already affected by falling demand and production interruptions abroad, as a current analysis by the KfW development bank shows. Every third medium-sized company expects that many companies will withdraw from global value chains as a result of the Corona crisis. “Companies that can or have to concentrate on only a few markets are particularly vulnerable,” says KfW chief economist Fritzi Köhler-Geib. Medium-sized companies are therefore well advised to open up new sales and procurement markets.