German / American Trade Compliance

Germany and the United States of America are not simply international superpowers in the sense of warfare and global influence, they are also world leaders in international trade and exports. In 1955, during the post-war occupation of Germany, the United States, “established diplomatic relations with West Germany, which included the US, British, and French zones.” It was not until 1974, that the United States established relations with Soviet-occupied East Germany. However, the trade relationship between the two countries did not become as strong as it is today until after Germany was unified in 1990 and would lead to Germany becoming a world power in trade and one of the United States’ most important trading partners.

 The European Union Member States are the United States’ biggest trading partner, but since Germany has the largest economy of the Member States, it is at the heart and center of US/European Relations. According to the US Department of State, “Germany is the world’s third-largest exporter,” after China and the United States with 47% of the country’s Gross Domestic Product (GDP) coming from exports. The US-German Treaty of Friendship, Commerce, and Navigation was signed on June 26, 1956, as an amendment to the original Friendship Treaty signed in the 1920s after World War I to improve US-German relations beyond the constraints and restrictions brought on by both World Wars. This treaty not only provided a mutually beneficial economic and political relationship for both countries, but it also gives US companies national treatment and allows capital between the countries to move freely without falling victim to double taxation.

            Even with the success brought on by this treaty, and Germany’s leading position in the world of exports and global trade, German/European trade faced its fair share of problems. European Member States like Germany do not have their own independent trade policies, therefore they are part of several bilateral and multilateral agreements, which include: The European Economic Area Agreement, Trade agreements with Overseas Countries and Territories (OCT), and many others that include Asian and Africans, as well as Australia and New Zealand. The three main trade agreements that impact US/German trade are customs unions, association agreements, and partnership and co-operation agreements. These policies apply to all countries that are a part of the World Trade Organization (WTO), an organization that regulates international trade rules and proceedings. The biggest example in recent trade history is known as the BREXIT, which was the withdrawal of the United Kingdom from the European Union on February 1, 2020. This withdrawal had a significant impact on Germany, as well as the rest of the European Union. In 2021 UK imports into Germany fell 8.5%, and is no longer among Germany’s top 5 trading partners, however this proved to be favorable for other trading partners like the US and other European Union Member States.

            In conclusion, over the years Germany has not only become an increasingly important trade partner to the United States, but it has also become one of the world’s leading superpowers in the world of trade. This would not have been possible without several trade agreements with other countries and the cooperation of the members of the World Trade Organization. Cooperation and compliance are important on a global scale, not simply between the countries involved in a particular trade, so it is important to not only understand the trade nuances of a given country, but it is also important to understand that country’s history of trade. In regard to the German/American history of trade, this is no exception, a long history of socioeconomic trade agreements and treaties have helped the two countries maintain a positive and mutually beneficial trade relationship that is sure to withstand the test of time and overcome any geopolitical or economic obstacles.

History of Trade Compliance in Germany/Handelskonformität in Deutschland

• Trade Policies
  • No independent trade policy because of EU membership
  • European Economic Area Agreement & others
    • https://www.state.gov/u-s-relations-with-germany/
• What makes Germany such a leader in trade/exports?
  • https://history.state.gov/countries/germany
• BREXIT impact on European/German trade
  • • https://uk.practicallaw.thomsonreuters.com/w-012-2025?transitionType=Default&contextData=(sc.Default)&firstPage=true
    • https://www.theguardian.com/world/2022/feb/09/uk-goods-into-germany-down-further-sign-brexit-damage
• German/American Trade
  • Most important trading partner in Europe for the US
  • The US-German Treaty of Friendship, Commerce, and Navigation
    • https://www.auswaertiges-amt.de/en/aussenpolitik/unitedstatesofamerica/218718

Contributor: Angelique Jones

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