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Cablegate: Highlights of 2007 German Foreign Trade Congress in Bremen

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RR RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHAG #0070/01 3252113
ZNR UUUUU ZZH
R 212113Z NOV 07
FM AMCONSUL HAMBURG
TO RUEHC/SECSTATE WASHDC 0194
INFO RUEHRL/AMEMBASSY BERLIN 0178
RUCNFRG/FRG COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHAG/AMCONSUL HAMBURG 0214

UNCLAS SECTION 01 OF 03 HAMBURG 000070

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E.O. 12958: N/A
TAGS: ETRD ECON BEXP BTIO GM
SUBJECT: HIGHLIGHTS OF 2007 GERMAN FOREIGN TRADE CONGRESS IN BREMEN


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1. SUMMARY: Over 800 participants and several guests of honor,
including German Federal Economics and Technology Minister
Michael Glos and King Abdullah II bin Al-Hussein of Jordan,
attended the 7th German Foreign Trade Congress 2007 on November
13-14 in Bremen. Glos stated that Chancellor Merkel remained
convinced that it was still possible to reach a WTO agreement
before the presidential elections in the U.S. King Al-Hussein
stressed the commitment to political, economic and social
reforms in many of the countries in the Middle East and called
on the gathered business representatives to grasp the economic
opportunities in the region. While the overall atmosphere at
the congress was very upbeat, the plenary sessions featured
several issues of concern to the German export community:
stalled WTO negotiations, Germany's restrictive visa and
immigration policy, and the lack of German personnel willing to
work abroad for longer periods of time. One German high-level
export representative heavily criticized the new 100 percent
container scanning requirement mandated by U.S. law. END
SUMMARY.

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Free Trade Praised, Compartmentalization Feared
--------------------------------------------- ----------------

2. In his keynote speech, President of the National Association
of German Wholesale and Foreign Trade (BGA) Anton F. Boerner
passionately praised the free trade system as a concept that
brought prosperity to Germany and the world. Boerner stated
that every fifth job in Germany is dependent on export and that
with a prospective export volume of EURO 985 billion (about USD
1.45 trillion) in 2007, Germany is likely to once again become
the world's export champion. Boerner pointed out that Germany
was also the second largest importer, trailing only the U.S.
While Boerner saw no alternative to free trade, with the
stagnant WTO negotiations and an increased tendency to negotiate
bilateral trade agreements that exclude third countries, he
lamented that there was a turning away from the multilateral
free trade system. Boerner stated that the WTO is the best
guarantor of free trade. However, in his view the chances for a
WTO agreement are low, particularly due to the upcoming
difficult negotiations on agricultural subsidies. He also saw a
real danger of market regionalization and compartmentalization.
Boerner lamented that the German discourse on globalization is
mostly dominated by fear (e.g. wage cuts, loss of jobs) and, by
contrast, presented globalization as the only chance to maintain
and develop German living and working standards. He criticized
the German and European farmer's presidents for their stance on
free trade, arguing that the fences must not come up but down.


3. Federal Economics and Technology Minister Michael Glos
stated that Chancellor Merkel remained convinced that it was
still possible to reach a WTO agreement before the presidential
elections in the U.S. He underscored that the German government
was determined to facilitate a successful completion of WTO
talks. Glos noted that foreign companies provide 2.2 million
jobs in Germany, whereas Germany secured 5.5 million jobs
abroad. He also said that foreign countries invested USD 43
billion in Germany, whereas Germany invested USD 80 billion
abroad.

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Royal Perspectives on Trade: Speech by Jordanian King
--------------------------------------------- --------------
----------

4. In his speech, King Abdullah II bin Al-Hussein of Jordan
declared that trade opportunities in the Middle East had never
been greater. He stressed that there has been a commitment to
political, economic and social reforms and progress in many of
the countries in the Near East, and presented Jordan as an
attractive regional gateway to 300 million Arabs. He praised
Chancellor Merkel's leadership role during the German G-8
presidency and stated that he is looking forward to the joint
summit of the G-11 and G-8 on December 14.

--------------------------------------------- --------------
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Export Opportunities are Infinite: Case of Skilled Crafts Sector
--------------------------------------------- --------------
-------------------

5. President of the Central German Skilled Trades Association
(ZDH) Otto Kenzler said that 70,000 to 80,000 German skilled
craft enterprises are engaged in foreign trade, most of them in
Great Britain and other EU countries. Kenzler noted that
because many specialized Polish craftspeople have left for

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Ireland, business opportunities are opening up for German
skilled crafts enterprises along the German/Polish border (e.g.
construction of wellness baths). Further, Boerner pointed out
that German skilled crafts enterprises had only exploited 50
percent of their export potential.

--------------------------------------------- --------------
--------------------------------------------- -
Trade Hampering Factors: Lack of (Flexible) Personnel, Visa and
Immigration Policy
--------------------------------------------- --------------
--------------------------------------------- -

6. Boerner stressed the importance of training and improving
professional skills in Germany, and underscored that this
necessity applies to Germans as well as locally hired personnel.
In this context he criticized Germany's visa and immigration
policy as a hindrance to training activities. Boerner stated
that foreign business partners needed to be able to quickly
immigrate into Germany and implied that this has become more
difficult due to undifferentiated security considerations.
Boerner further accentuated his criticism of German immigration
policies by stating that personnel shortages at German exporting
companies could be overcome, if German politicians would not be
so narrow minded (Note: Glos concurred, stating that this issue
was subject to party coordination. End Note.). Boerner stated
that Germany's restrictive visa and immigration policy was put
on the agenda of Germany's State Economics Minister Conference
on November 19/20, and expressed hope that state economics
ministers will eventually appeal to state interior ministers on
behalf of the export sector. Head of the Department of Foreign
Trade Policies in the Ministry of the Economy and Technology Dr.
Karl-Ernst Brauner referred to successful efforts by the German
federal government to motivate foreign students to study in
Germany.

7. Boerner as well as other business representatives alluded to
the fact that a lack of will on the part of Germans to work
abroad for longer periods of time represents the most important
obstacle to increased foreign trade. Several speakers
emphasized the importance to defend and lobby for the protection
of intellectual property rights (IPR). Boerner concurred,
stating though that this issue will be settled with respect to
China within the next one to three years, as China was likely to
follow Japan's path and increasingly be interested in IPR
protection of its own goods.

--------------------------------------------- --------------
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100 Percent Container Scanning Requirement Under Heavy Fire
--------------------------------------------- --------------
-------------------

8. Chairman of the National Association for the German Export
Trade (BDEx) Wolfhart Putzier stressed that there were various
new measures that could constrain trade. He stated that the
latest example of such constraints was the 100 container
scanning requirement "which will burden exports." Putzier
complained that even transshipments to Latin and South America
would be affected by the scanning requirement, since "the U.S.
would treat them as imports." Putzier claimed that the stresses
and strains imposed by the 100 scanning requirement would be
excessive and said that documentation and random inspections of
containers should suffice to guarantee security. He continued
by calling the policy regrettable and an example of U.S.
protectionism. Putzier said he hoped that Germany will not
yield to U.S. pressure and called on politicians to defend
German interests.

9. COMMENT: The number of statements and level of applause was
an indication that Germany's exporters are seriously concerned
about Germany's immigration and visa policy, which is
increasingly viewed as an obstacle to external trade. The fact
that this issues is on the agenda of the State Economics
Ministers Conference on November 19/20 is testament to the
urgency of the issue and an increased assertiveness of German
business associations. The way Glos remarked that the issue of
filling vacancies in Germany with foreigners was subject to
party coordination was a forthright signal that the SPD is
resisting opening the German labor market to foreign experts.
The harsh criticism of the 100 container scanning requirement
mandated by U.S. law as a protectionist measure may stem more
from a lack of accurate information than deeply ingrained
negative convictions toward USG policy. However, although the
remark did not receive much (audible) resonance among the podium
discussants and audience, it is a vivid reminder of the urgency
to counter such misperceptions before they develop into broader
misperceptions or serious trade disputes. In that context,

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successful outreach strategies applied with respect to the
Container Security Initiative (CSI) offer valuable experiences.
END COMMENT.

10. This message has been coordinated with Embassy Berlin.
BLUNT

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