7 - TRADE POLICIES IN GERMANY

Abstract

This chapter describes trade policies in Germany. Two contrasting cases in West Germany's trade policy experience illustrate how the prior existence of a special institution for a particular branch of industry promotes protection when the demand for it rises, and how the absence of such an institution gravitates against new protection. The steel industry was subject to special rules under the European Coal and Steel Community and received much protection. The West German automobile industry was subject only to normal rules applicable to all other industries and received no protection, even though the demand for it rose. It is found that after more or less complete liberalization of intra-Community trade by 1958, the first steps of the European Commission in enforcing special rules were harmless enough. In 1963, tariff and non-tariff protection against imports from third countries was increased in response to a temporary decline in sales. They were renewed from year to year, and, in 1967, a voluntary export restraint was negotiated with Japan.