Surge in oil going to West Berlin evens up East-West German trade
Something new has happened in trade between East and West Germany (Bonn calls it inner-German trade). In the first quarter of this year, the German Democratic Republic (DDR) shipped more to the Federal Republic of Germany than vice versa.
West German exports to the DDR in the first three months were up 47 percent to 1.4 billion deutsche marks ($809 million). The DDR shipped 1.57 billion DM, up 45 percent, to the Federal Republic.
Usually, West Germany has a sizable surplus in trade with its communist neighbor -- one running around 300 million DM ($173 million).
West GErman officials expect their nation to be running a trade surplus again with the DDR later this year. But for the year as a whole, trade will be "about balanced."
What happened is that DDR shipments of crude oil and oil products to West berlin increased dramaticaly in price -- by mor ethan 200 percent and 127 percent, respectively. West Berlin takes about 2 million tons of oil and products (such as gasoline) from the DDR. The crude originates in the Soviet Union, going west through the Friendship Pipeline.
West Germany also tranships oil to East Germany. But it is only half as much -- about 1 million tons.
In physical volume there has been little change in East German-West German trade in the last five years. "We don't says that very loud," noted an official here. "In political terms, we regard it as important."
West Germany still holds the official hope that increased trade will help the two Germanys reunite some day. But officials admit it isn't likely for decades.
West Germany holds about 3.9 billion DMs in IOUs from the DDR. It does not want this debt to grow much. So this year's balance in trade is welcome in that sense, though the higher prie of oil is naturally regretted.
The prime restraint on "inner-German trade" has been the inability of East Germany to deliver goods of sufficient quality to West Germany. Moreover, the East Germans have wanted to diversify their exports to other Western nations. In addition, East Germany has apparently been scrambling to find enough goods to ship to the Soveit Union to pay for the oil it is buying there.
In any case, the better balance in trade between the two Germany is seen here as possibly opening the way for more West German exports to the DDR.
To West Germany, trade with the DDR is not too important economically. East Germany buys only about 1.6 percent of West German exports, down from 1.9 percent in 1972.
West Germany is more important for the DDR, taking about 9 percent of its exports.
Last year East Germany shipped 4.79 billion DM ($2.8 billion) of goods to West Germany. Petroleum products topped the list, followed by textiles and clothing, agricultural products, chemicals, machinery and electrical goods, wooden furniture, and so on.
East German textile exports have been hit by competition from East Asian nations, dropping 11.5 percent last year. The DDR did step up its shipments of iron and steel products by 49 percent and of wooden goods by about 9 percent.
The most important of West Germany's 5.09 billion DM of exports to the DDR was machinery and electrical equipment. Other shipments include chemicals, agricultural and forest products, iron and steel products, coal, textiles, nonferrous metals, and so on.
Exports of West German capital goods to the DDR have been losing ground to France, Austria, and Japan. Some years ago West Germany won some 80 or 90 percent of the DDR's imports of machinery, equipment, and plants. Today it has only 40 or 50 percent of that business.
A West German official complained that other nations were subsidizing such exports with low-interest loans. "But we do nothing," he said. "Besides, we can't have all the trade with East Germany."
An office in Berlin regulates "inner-German trade." Officials from both sides meet every two weeks or so to deal with any problems.
East German goods enter West Germany duty-free. Nonetheless, the DDR has been losing its market position in West Germany.
"What they need is more quality and more modern products," said an official here. "They don't react as quickly to changes in the market as we want them to. Their planning system is not very efficient."