Foreign Trade Policy after Brexit and the Bundestag Election

"We need to make the social and economic significance of trade policy in Germany more present again”, underlined Hubertus von Baumbach, chairman of the BDI Committee on Foreign Trade.

The exploratory talks on the so-called Jamaica coalition have broken down. The options are another grand coalition, new elections or a minority government formed by the Christian Democrats and the Liberals. What effects are the lengthy efforts at forming a government – along with the various scenarios – having on the foreign trade interests of German industry?

As long as there is only an acting federal government, Germany has only reduced influence on important trade policy issues in the EU. That includes debates in Brussels on data flows and data protection in free trade agreements or on the architecture of FTAs. German industry depends on the federal government having a strong voice in Europe. We need rules-based and open global trade. We therefore hope that there will be clarity soon.

Whether new elections would really lead to this clarity is questionable, in my view. In any case, we must ensure that the social and economic significance of trade is better understood in Germany and that the related debates are balanced. Industry would like to make its contribution to this.

The Brexit negotiations between the United Kingdom and the EU are proving difficult. How is industry dealing with the trade policy challenges of Brexit?

First and foremost, we support the EU’s negotiating premises because the future cohesion of the EU27 is important for German industry. But as soon as there is sufficient clarity over the exit criteria, both sides should work to guarantee that trade relations are as undisrupted, deep, and comprehensive as possible post-Brexit. Naturally, we are all hoping that the transition to an ambitious trade agreement will be smooth to the greatest possible extent. The slow progress in the negotiations combined with London’s lack of a clear strategy means, however, that it is absolutely necessary for all companies to prepare themselves for a disorderly exit.