Exploring Germany’s role as a global ethical leader.

Germany, in its pursuit to be a beacon of inclusivity, minority rights, and human rights, has embraced a noble cause. However, its approach of conditioning trade on compliance with its ethical and political standards presents a contentious strategy. This stance, while admirable in principle, could at best imbalance Germany’s trade and at worst alienate key partners.

Germany’s economy, deeply intertwined with global trade, now faces unprecedented challenges. Post-COVID disruptions, the Ukrainian conflict, soaring energy prices, and increased industrial overheads have amplified Germany’s reliance on exports. The loss of affordable Russian gas has necessitated a reimagining of its commercial strategy, with increased sales offsetting rising costs.

Particularly vulnerable is the armament sector, which, unlike adaptable industries, is geographically constrained and export-dependent. Despite the announcement of a significant upgrade fund in the wake of the Ukrainian crisis and Germany’s remilitarization, actual implementation remains pending. The Traffic-Light coalition, comprising the Social Democrats, Free Democrats, and Greens, holds significant power in this arena, overseeing every export deal, a total value of which amounts to $8.4 billion.

For German companies, the stakes are high. Domestic procurement, often favoring U.S. technology, threatens the very survival of the German defense industry. IG Metall vice-president, Jürgen Kerner, warns of the implications of continuing this trend. Furthermore, the civilian applications of military technology mean setbacks in this sector could have widespread repercussions. Renk CEO Susanne Wiegand encapsulates the industry’s sentiment, emphasizing the crucial role of state support and the need for innovative market exploration within the constraints of export control laws.

However, Berlin’s actions often seem at odds with these industrial aspirations. The government’s use of export vetoes as diplomatic leverage has repeatedly impacted the sector financially. The recent hesitation over the Eurofighter Turkish contract is a case in point. Germany’s delay could push Turkey towards alternative purchases, like the F-16, potentially linking this decision to broader geopolitical negotiations like Sweden’s NATO membership. This pattern isn’t new; Berlin has historically blocked high-value sales, often under pressure from parties like Der Linke, affecting countries such as Turkey, Egypt, and Saudi Arabia.

These decisions carry dual risks: damaging trade relations causing concern among Western industrial partners, and directly impacting German firms. As Renk CEO Wiegand stresses, a unified European approach to export policies is critical, as partner nations are unlikely to accept German-imposed restrictions.

Despite these challenges, there are indications of a more pragmatic approach. German Chancellor Olaf Scholz’s recent moves to ease international sale restrictions signal a shift towards realism. This approach aligns with Scholz’s diplomatic philosophy, as seen in his interactions with the Emir of Qatar regarding Middle Eastern negotiations: engaging with influential regional players is essential to prevent further escalation.

However, this realism faces criticism from within the Traffic-Light coalition, particularly from Die Linke. Their objections highlight a political paradox: while advocating for ethical standards, they offer no viable alternatives that address the economic implications of such policies.

Germany’s value-based export policy, driven by a desire to align foreign trade with ethical standards like LGBTQI+ rights, remains a subject of debate. Sociologist Christian Schüle points to the influence of moralizing forces in shaping this policy. While it has not been fully implemented, its presence in political rhetoric is undeniable.

This policy’s tension with practical needs became evident during the Ukrainian crisis. The necessity of securing reliable energy sources led to a pragmatic shift, even among those previously critical of countries like Qatar. Vox reporter Jen Kirby notes the contrast between Merkel’s pragmatism and Scholz’s progressive stance, emphasizing the Greens’ push for a values-driven foreign policy.

Germany stands at a crossroads. The future of its foreign trade policy hinges on the balance between the pressures from NGOs and left-leaning parties advocating for a values-based approach, and the demands of Realpolitik, driven by global realities and domestic concerns. The outcome of this struggle will significantly shape Germany’s role on the global stage and the future of its industry.