§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry what assessment he has made of the effect of a united Germany on the medium-term prospects for the United Kingdom balance of trade with West and East Germany.
§ Mr. RedwoodIn 1989 exports to the FRG were £11 billion and imports £20 billion; exports to the GDR amounted to £106 million and imports £169 million. The medium and longer-term effects on the balance of trade of a united Germany remain uncertain. In the shorter term, exports to the present FRG could increase as a result of British companies supplying customers in the GDR through or in co-operation with companies in the FRG. In the medium and longer term, unification should free the GDR from the constraints imposed by shortages of convertible currency and the potential for increased exports could be considerable; but so too will be competition for the business. As to imports from a united Germany, it remains to be seen how successfully GDR producers are able to compete following a move from a command to a market economy. My Department is keeping prospects under review.