Globalisation of trade and investment
Foreign Trade is a specialized field that is not an activity that everyone can get a grasp of; in fact it is a specialized arena that only specialised individuals can handle. Dealing with foreign trade effectively can push the country towards the road of success and any mishandling can result to be fatal for the future prosperity of the country. As Ludwig Erhard in 1953 said that “foreign trade is not a specialized activity for a few who might engage in it, but it is the very core and even the precondition of our economic and social order.
” (Trade Philosophy and Trade Balance, 1995). One of the major trading participants has been West Germany since the 1950s. During most of these years it had high trade and unlike many countries around the world, Germany had surplus current accounts meaning that the exports are more than the imports leaving the difference to be positive. “It was the world’s largest exporter in 1988, second largest after the United States in 1989, and first again in 1990 if East German exports before monetary unification in mid-1990 are included.
West Germany was also consistently one of the world’s largest importers” (Trade Philosophy and Trade Balance, 1995). Germany is the world’s third biggest economy in terms of gross domestic product (GDP), only after the USA and Japan. In Europe, it is the largest one, accounting for circa one third of the European Union (EU) GDP. However, the growth in German GDP is sluggish. In 2005 it amounted to 0. 9% compared with 1. 8% in the UK and 3. 5% in the USA.
Overall the average real GDP growth between 2001 and 2005 reached mere 0. 62%. On the other hand, it is predicted that the GDP growth will accelerate to 2-2. 2% between 2006 and 2009 (Datamonitor 2005). In addition, Germany is with its 82 million people the largest consumer market in the EU and also one wit the highest income per capita. The gross national income per capita in 2005 amounted to 29,210 international dollars (in purchasing power parity) (Doing b. in Ger. USA).