Germany is one of the richest countries in the world, ranking in the top 20 in gross domestic product per capita. It’s also the most populous in the European Union (EU), with 82.4 million people. With a highly developed economy supported by a large consumer base, it boasts low unemployment rates and rising wages. It’s one of the best places to do business, according to the World Bank’s ease of doing business score. Exports represent about 45% of the German economy, and a full quarter of its industry is devoted to being exported, which is a high percentage compared to other developed markets.
CETA: Knocking down roadblocks
Among the many incentives to do business in this progressive market, the introduction of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is the metaphoric cherry on top for Canadian businesses. The new trade agreement provides preferential access to the $20 trillion EU market through the elimination of tariffs. A full 98% of the tariff lines previously applied to manufactured products and 92% imposed on agriculture and agri-food products have been lifted. Non-tariff benefits have been equally significant, providing access to government procurement, a reduction of technical barriers and enhanced intellectual property protections.
Canadian exports to Germany: Where the action is
Last year, Canadian goods exported to Germany cleared $4.8 billion. Traditionally, the sectors in which we’ve done well include:
- agriculture and agri-food;
- consumer products;
- information and communications technologies;
- life sciences;
- machinery and equipment; and
We’re also seeing an impressive new uptake in:
- machinery repair and installation;
- transport and storage;
- high-tech goods; and
- retail and wholesale distribution.
German automotive industry changing gears
It’s hard not to think of the auto sector when you consider this market: German engineering is synonymous with innovation and quality. Don’t make the mistake of assuming all auto supply chains are entrenched, because change is in the wind.
Recent new emissions standards set by the EU will fuel the transition to electric vehicles, providing opportunities for new suppliers of electric vehicle components to enter the market. Lightweighting (the drive to make vehicles out of lighter materials) will continue to drive this sector, as will digitalization and autonomous driving, making it the perfect time for Canadian companies with relevant solutions to get a toe-hold here.
As part of EDC’s Business Connection Program, we’ve already made a series of introductions between innovative Canadian companies and German automakers. It’s inspirational to watch our home-grown trailblazers, having succeeded in one sector, diversify and cross over into the auto sector.
Appetite for superfoods
This may surprise you, but Germany is the world’s largest importer of agriculture and agri-food products. In addition to the leading, traditional exports—which includes oilseeds, wheat and grains, fruit preparations and pulses—emerging opportunities are sprouting up everywhere. Canadian producers of vegetarian and vegan foods will enjoy healthy sales, as will those dishing up plant-based proteins, superfoods and superfruits, as well as organic and “free-from” options. The biggest post-CETA winners are the products that had been previously subjected to high tariffs, so we’re now seeing substantial gains in fish and seafood, high-sugar foods, pet food, fresh and processed fruits. In fact, within its first year alone, the top 10 Canadian exports to Germany had experienced an average volume increase of 10%, with some subsectors climbing 55%.
Anuga is the world’s largest trade fair in the food and beverage industry. Taking place this fall in Cologne, Germany, it will house more than 7,400 exhibitors and some 165,000 visitors. EDC will be present at the show and has focused our efforts on showcasing the large proportion of women-owned and women-led companies in this sector. We’ll be facilitating connections and collaboration among female entrepreneurs to create new business opportunities and relationships among this under-represented exporting contingent.
Making inroads into Germany
Germany is not only an impressive market in and of itself; it can serve as a gateway to the rest of the EU. It’s also a jumping-off point in pursuit of opportunities in Asia or any of the countries with which Germany enjoys free trade agreements. Canada has an incredible trade ecosystem in place, which I’m proud to be a part of. So, why not put Export Development Canada to work for you?
German market intelligence
Our job is to help Canadian businesses of all sizes go global. If you’d like to find out more about various markets, we publish an array of economic and export reports that you can access online for free. Here’s just a few to bookmark:
- Germany country information page, which provides insights to help you evaluate the market in Germany;
- Country Risk Quarterly, an interactive guide providing economic and political information on 50 countries;
- Global Economic Outlook, a look at the changing global risks and opportunities to help inform your export strategy; and
- Global Export Forecast, an interpretation of major events in the world economy and how they affect Canadian exporters.