An investigation done by the credit insurer, Euler Hermes's, research department has revealed that Germany is 4th on a list of countries with the most protectionist regulations. They are below the USA, India and Russia.
The study was done before President Trump's recent statements about trade restrictions. Chancellor Merkel's indignant reaction to this comes from seeing this research in a different light. According to the researchers, the German government favours important sectors such as Transport, Machinery & Equipment, and the Steel industry. The types of regulations vary from tolls to trade financing policies and non-tariff measures. The German service industry is also heavily regulated and, therefore, difficult to access for foreign competitors.
Surprising
According to the study, in 2017, 467 new protectionist regulations were announced. This was significantly fewer than in 2016. Johan Geeroms, Head of Risk Underwriting at van Euler Hermes, the Netherlands says, "This, in itself, is surprising because you would think more regulations are being implemented. Another surprise is that Germany was placed fourth. This while Chancellor Merkel is adamant that she does not believe in protectionism."
Geeroms says Germany has been on the protectionism bandwagon for a while now. "The Netherlands must not ignore this. We are, by and large, an export country. The more barriers, the worse off we will be. Dutch companies export about EUR425 billion's worth of goods on an annual basis. More than EUR1000 billion's worth goes to Germany."
Consequences for the Netherlands
Geeroms is concerned about the exportation of agricultural goods. "A quarter of Dutch exports to Germany come from the agricultural sector. However, when I look at the figures, I do not, as yet, see any direct consequences of the German regulations. Compared to the 2016 record year, there was renewed talk last year of a considerable improvement of 5% of agricultural exports to Germany."
Why is Germany apparently imposing all kinds of trade restrictions? "There is a reason they got 4th place. Whatever Chancellor Merkel claims; they are working on this. They have an enormous trade surplus. It seems like they want to ensure its safety." Geeroms has called on Dutch businesses and politicians to follow the developments in Germany, critically. "However good the relationship with Germany may be, we need to stay alert. We must be able to respond if things change. The spectre of protectionism is in the air. Before you know it, it might be too late."
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