German exports shrank by at least 12% this year as demand from the United States and Britain collapsed due to the coronavirus pandemic while Asia remained the only bright spot for Europe’s largest economy, the BGA trade association said on Tuesday.
“The COVID-19 pandemic has pushed us back five years when it comes to trade – and at the same time it has catapulted us five years into the future in terms of digitalisation,” BGA President Anton Boerner said.
German exports to the United States, its largest foreign sales market outside the European Union, fell by 16% and exports to Britain tumbled by 18.5%.
“The only bright spots are China and Asia, their importance continued to increase during the pandemic,” Boerner said.
But it remained to be seen how a China-backed agreement among fifteen Asia-Pacific economies to form one of the world’s largest free trade blocs would change demand for European goods in coming years, Boerner cautioned.
China is likely to overtake France and the United States this year to become number one destination for German exports by value for the first time as German companies double down on the resurgent Asian giant.
European officials said on Monday that China and the EU are likely to clinch a deal this week that would give EU firms better access to the Chinese market, improve competition conditions and protect EU investment in China.
The BGA president urged European policy makers to overcome differences in trade policies with the United States and find new common ground with President-elect Joe Biden.
Exports could grow by up to 13% next year, said Boerner, warning, however, that forecasts were tricky due to the unpredictable nature of coronavirus pandemic developments.
Boerner said it was unlikely that exports, an important driver of overall growth in Germany, would hit pre-crisis levels before 2022, adding, that could happen in the first or second quarter of that year.