The Hemisphere: Trade Comeback

“Who is the most popular girl in Argentina?” asks a current Buenos Aires wisecrack. The answer: “Mercedes-Benz” —a humorous salute to the more than 13,000 German busses, trucks and cars that roll through the capital’s streets. In Brazil, doctors rely on new German X-ray machines; in Haiti, Bavarian beer is the favorite; in Mexico, German generators whir in new power plants. These signs and portents measure a striking development: exports of goods from Germany to Latin America, at a dead halt only eight years ago, were 2½ times greater by dollar volume in 1954 than in any year during Germany’s pre-World War I heyday of Latin American trading. Items: In the 3½ years since the freighter Santa Ursula sailed to Buenos Aires under the German flag—last seen in the River Plate when the Graf Spec was scuttled in 1939—West Germany has made itself Argentina’s No. 1 supplier.

¶ Taking advantage of a 2,728-lb. weight limitation for imported cars, which effectively excludes most U.S. cars from Colombia, Germans have made the little Volkswagen a commonplace on every village street.

¶ Germans are dickering to build a coastal freighter fleet, sugar and paper mills for Chile, whose Development Corp.’s executive vice president last week wound up a two-month business trip to West Germany.

Export or Die. The resurgence of German trade in Latin America is a direct result of West Germany’s postwar industrial comeback and its historic need to “export or perish.” The springboard was the war in Korea, which frightened Latin America into loading up on cars, printing presses, lathes, blast furnaces, chemicals and generators in return for coffee, cocoa, sugar, bananas, wool and hides.

The Germans went after their share of the trade by ingenious bartering agreements signed with eleven countries. No hard and fast commitment, each bilateral trade agreement simply budgets an equal two-way trade for a year, usually with an arrangement for “swing” credit if either of the contracting nations fails to fill its quota. Bartering is a step away from free trade, which German Minister of Economy Ludwig Erhard ardently urges. But he goes along with it because, by skirting present currency shortages and exchange difficulties, it works.

On Buttermilk. Once a barter agreement has paved the way, the Germans have made the best of it with service and salesmanship. “If you inquire in France, the U.S., Great Britain and Germany about buying machinery,” says a Caracas businessman, “the Frenchman doesn’t answer, the U.S. company sends a catalogue, the Briton assures you his product is the best, and two Germans show up and ask, ‘Where do we put it?’ ” In capitals and backlands throughout Latin America, German salesmen in belted jackets, speaking good Spanish or Portuguese, take pride in a three-word motto: “Sell, sell, sell!” They welcome small orders, quite feasible in German plants, where labor comes cheap and a product can easily be retooled for the individual customer. By building an engine that operates on either diesel fuel or natural gas, Germans got much Venezuelan oilfield business. “And we’d have made it run on buttermilk if that’s what they wanted,” bragged the designing engineer.

Between bartering and salesmanship, Germans pushed their 1954 exports to Latin America above the $500 million mark, compared to the prewar record of $200 million plus. Nevertheless, German businessmen are far from satisfied. Once their share of the Latin American market was 15%; now, because the market is vastly bigger, their $500 million cut represents only 10%. Germany may find the going tougher as she increasingly crowds the U.S., which supplied a third of the Latin American market before World War II and now supplies one-half. The German comeback has not seriously affected U.S. exporters as yet, but-plenty of them are beginning to take a hard second look at their busy German competitors.