Evening star., 1953-07-26

industry'S total output was sold
abroad.
The precision instruments and
optical industry, while it does not
loom nearly as large in the total
picture. did an even better export
job, selling 40 per cent Of its output
abroad, higher proportion than
any other German industry. Makers
of electrical equipment exported IL
billion marks worth of their goods
out of total of billion produced.
The future outlook for German
exports is somewhat clouded. Re-
Gently German government and
business leaders voiced resentment
at foreign countries which push
their exports through overt or con-
cealed subsidies. The main targets
of this criticism are Great Britain
and France.
Several factors combine to limit
the scope and force of the current
German export drive. In the first
place, the makers of capital goods,
having largely worked off their post
Korean backlog of orders, note that
the mood for capital investments
abroad, particularly in the UNDER
developed countries, is on the wane.
In the machine building industry.
for instance, new orders for some
months have fallen behind the VOL
ume of current deliveries.
On the other hand, German prices
in many lines have advanced to a
point where they nullify other COM
petitive advantages; in particular,
the German iron and steel process
ing industry is handicapped by the
exceptionally high domestic price
level for these basic materials.
Arobs' Resentment
In various parts of the world the
German export drive has run into
unexpected difficulties. One of the
most serious was the threat Of
concerted economic boycott by the
Arab League, following Bonns resti-
tuition agreement with Israel Al
though the threatened boycott was
never put into effect, and, probably
never will be. individual cancella-
tions of orders, especially in Syria
and Saudi Arabia, struck severe
blows. Egypt, on the other hand,
appears to have come around to the
view that it is in its interest to enlist
German economic (and, to some ex-
tent, military aid in its conflict with
Britain rather than to punish Bonn
for its treaty with Israel.
In South America, Brazil's virtual
insolvency has put crimp into rap
idly expanding German exports to
that country. Argentina and Chile,
which also traditionally rank among
Germany'S best customers in that
part of the world, are likewise beset
by exchange difficulties and heavily
passive trade balances. On the other
hand, Venezuela recently has be-
come major market for German
exporters, including in particular
the Siemens & HalSke concern,
which has just obtained l00-mil-
lion-mark contract for telephone
equipment in that country.
France is still buying German cap
ltal goods on a large scale, but has
almost completely halted it's pur-
chases of German consumer goods.
The same applies to Finland and
many other European countries.
Wanted: Government Aid
In an attempt to keep the current
export boom from petering out, the
Germans look to their government
for daring leadership in three fields:
Opening up the huge trade area
behind the Iron Curtain for the ex-
change of non-Strategic goods
o Development of the European
eralization of trade.
Q An early return to the restoration
of freely convertible currencieS. In
this respect, Western Germany to-
day is Spearheading drive which
also has OutSpoken advocates in
the Netherlands. Scandinavia and
Britain, among other countries.
The story Of the DeutSche Mark
is Of itself striking demonstration
of Western Germany's powerful
comeback When the new currency
first was launched. five years ago,
the cautious Swiss bankers ex-
changed it at the rate of 19 Swiss
francs for 100 DIM. Today, the rate
of exchange hovers around 80 francs
for 100 DIM.
Last year, Germany Joined the
International Monetary Fund, which
on February 2. 1858, established a
par value for the Mark of AZ to the
United States dollar. This was the
first of number of steps leading
to gradual restoration of mark
convertibility.
Since May 2. free exchange deal
lngs on a restricted scale and in
limited number Of currencles nave
been resumed in Western Germany.
1t is planned gradually to broaden
the scope of these operations with a
view to freeing the mark altogether.
eventually, from its 20-year-old off,
cial fetters.