German Trade and Comparative Advantage

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German Trade and Comparative Advantage The primary source of Germany's economic comparative advantages lie with advanced manufacturing products, and a strategic focus on an information based society. German engineered and manufactured products benefit from a global appeal for both quality and design. While other countries focus on cost cutting and lower labor costs, German manufacturing remains competitive through product innovation and increased labor productivity. While German labor costs are as much as 30% higher than the United States, manufacturing remains both a steady and robust employer. Specific advanced manufacturing industries that benefit from increased trade are automobiles, equipment, and renewable energy products. The following is a brief breakdown of target markets for each of these trade products. Automobiles In 2010, France ranked as the world's 7th largest automobile market by units, with PSA Peugeot Citroen and Renault accounting for over half of sales. Export of German automobiles to the French market is aided by weakness of domestic competitors and government incentives for new "green" models. The continued integration of advanced technology within automobiles enhances the durability of market share inroads achieved by German automakers. Equipment In 2009, Germany remained the Netherlands largest trading partner, accounting for 25.5% of their exports and 16.6% of imports. The Netherlands is a natural market for German equipment with Economy Watch
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