German business fears for US ties

Schroeder: wants a peaceful solution to the Iraqi conflict

By Mark Gregory BBC World Service business reporter

German business leaders are worried the diplomatic row between Germany and the United States over Iraq will damage commercial ties between the two countries.

The head of a leading organisation representing German exporters told the BBC's World Business Report that Chancellor Gerhard Schroeder should reconsider his opposition to American military action in Iraq.

Other German business groupings have begun a campaign of advertisements, conferences and other initiatives to stress the significance of commercial and political ties.

I don't think anyone can recall a time when the relationship was so difficult

Anton Borner, BGA president

There is no real evidence so far that trade has suffered, but anecdotal reports from German industrialists suggest a growing reluctance by American firms to conclude contracts.

A major worry is that American consumers will start to boycott high profile German brands such as BMW and Mercedes cars, although that hasn't happened yet.

A lot to lose

Germany exports $45bn of goods to the United States each year.

It is the country's second largest trading partner.

A million Americans work for German firms with operations in the US such as SAP, Siemens and Deutsche Telekom.

Not surprisingly then, German business leaders are deeply worried that American anger at their government's opposition to war with Iraq will undermine commercial links.

Anton Burner, president of the BGA - a major association representing German exporters - said businesses must campaign to change the attitude of German politicians.

He said the chancellor Gerhard Schroeder had little understanding of the economic impact of his stance.

"I don't think anyone can recall a time when the relationship has been so difficult," said Mr Borner.

Advertising the issue

Another organisation, mainly financed by German businesses, is to take out full page advertisements in American and German newspapers this weekend.

The advertisements will stress the strength and depth of ties between the two nations over the past half century.

Mr Borner said:"There is no evidence of sale anywhere being hurt or things being damaged but there is a lot of concern.

"There are also fears about informal boycotts taking place in the US."