Germany's traditional export markets remain France, the US, the Netherlands, Italy and the UK. But trade has also increased with the Middle East and North Africa. While the overall share of German exports to the area remains low, at 2.1 per cent of the total, the region is growing in importance. Germany's total Middle East exports - mainly machinery, industrial goods and transport-related items, including vehicles - increased by almost 11 per cent to DM 23,444 million in 2000. This growth established the region as the fourth most important export market, ahead of Latin America and Africa.

Last year's increase in demand for German goods across the region was largely a result of the strong oil price and consequent renewed purchasing power, especially in the oil exporting states. This led to a wave of new large-scale projects in the region's industrial and infrastructure sectors, and the downstream oil and gas industries.

The key market for German exports remains Saudi Arabia, which absorbed products worth DM 5,160 million in 2000, up by 18 per cent from the corresponding period the year before. The UAE and Egypt took second and third places, followed by the Maghreb states - Tunisia, Morocco and Algeria.

For German firms, the region's renewed economic strength has opened up a range of opportunities, particularly as western economies are slowing down.

'We have seen positive developments almost all over the Middle East,' says Klaus Friedrich, attorney-at-law at the foreign trade division of VDMA, the German Machinery and Plant Manufacturers' Association. 'Export volume for machinery has gone up by 20-40 per cent across the region.'

While the total value of machinery exports to the Middle East and North Africa remains low compared with other regions, growth rates are encouraging. According to the VDMA, which represents and promotes the interests of about 3,000 German enterprises, Algeria recorded the highest growth in demand for German machinery in North Africa. Exports climbed to DM 251 million between January and August 2001, a year-on-year increase of 43 per cent.

During the same period, exports of machinery to Saudi Arabia rose by 21 per cent to DM 653 million, while the UAE bought machinery valued at DM 667 million, up by 34 per cent. The region's largest market for German machinery was Iran, importing goods worth DM 774 million in the first nine months of 2001, a year-on-year increase of almost 50 per cent.

On the import side, the high oil price pushed the value of German imports in 2000 to DM 19,005 million, a staggering 60 per cent increase from the previous year. Libya accounted for DM 5,711 million of the total - mainly made up of crude oil. Libya is Germany's fourth most important oil supplier after Russia, Norway and the UK. The oil price rise also benefited Germany's other traditional oil suppliers: Syria, Algeria and Saudi Arabia.