Evening star., 1949-06-12
British See
Competition
From Reich
Industrial Comeback
Poses Problems
In Exports
ey Rolond Bird
sy Rolond Bird

cf koSono efo
| LONDON president Of the
British Board Of Trade made q
statement in the House Of Com
mons recently on German coinpe-
tition In export markets, Al the
very moment. British exports
were breaking all records He
had previously listened to indus
tries anxious 70 lay before him the
facts-as they saw them-of grow
ing German competition. These
representations have been made
with an insistenee which almost
suggests that Germany has made
full-scale industrial recovery
and has the whip hand in cornpe-
tition in the export markets,
] Some unkind critics Of. British
industry have suggested that II Is
shouting long before II Is hurt, II
/ has certainly become rather un-
used TO competition In the last 10
years. Controls and rationins al
home and a sellers market for
exports have enabled British in
dustry TO so ahead with produc-
ton. often regardless OF costs
+ The first hint of competition Is
like the first furry Of snow in
winter. II means tough weather
ahead.
There are two main complaints
about German competition. The
first is that it may be unfair
in other words. that 1t may be
bolstered up by such devices as
subsidies and multiple exchange
rates. The second is that German
exports can be sold more cheaply
than British because German
wage rates are lowes.
Prices Distorted
! Until short time ago the
joint export import agency (which
supervises German trade on be-
half of military government
fixed the prices OF German ex-
ports by reference TO prices ol
similar articles IN world markets
Last summer. following the re-
/ form of German currency. a uni
form conversion rate of 30 United
States cents to one deutschemark
was fixed. This rate has proved toe
high for some classes OF German
exports. For other classes OF ex-
ports, it may be unreasonably low
| German prices are still dis.
torted. So are German wages
Internal German costs have moi
settled down after the currenc,
reform last June. They are much
more stable than they were. bui
in some lines of production Ger
many could probably still affort
to export at much higher con-
version rate.
The argument that German
wages are unfairly low also fail'
to survive examination. Increase:
in German wages have alread,
been made since the stop" wa
removed last November. German
earnings on the average are dor,I
so per cent OF British earnings
But German productivity Del
man Is certainly much lower than
British productivity.
| It will take time before these
distortions in the German economic
structure are removed. In the next
few months the cost OF replacing
| German stocks Of materials will
rise, while food will cost more
German wages will tend to rise al
productivity rises. There is no un-
assailable evidence of q persistent
deliberate attempt at unfair CON-
petition. through an unduly low
conversion rate. through unfairly
low wages or through system OF
specific export subsidies.
Must Watch the West
British exporters. nevertheless
are within their rights in demand
ing that the government keep @
close watch for any emergence OF
unfair practices by German in
dustry. The fact that fears oi
German competition are out oil
proportion TO the recovery in Ger
many's export capacity. however
suggests that British industry has
something to learn about the
part which Western Germany ID
destined to play In European re-
covery.
German Observation-Disclosures
may be said Of Its long-r1in pos
sibilities-is In q very immature
stage. The threat OF competition,
touches the edge Of . few markets
| in which British exports have en-
joyed a clear run since the war
The final figures Of German trade
/ in ie48 are not yet available. but
estimates suggest that exports OF
raw materials and manufactures
were worth $3.50. 900 900. OF which
one-third consisted Of manufae-
lures. Something less than $780,
000. 900 for German manufactures
| In le48 compares with s5.5f2. 900. =
900 for exports OF British man
ufactures last year.
German exports. which were
lSee BIRD, PAGE C-5.t