EU trade deal secures jobs in German engineering sector The removal of trade tariffs helped German manufacturer of

bookbinding machines find profitable market in South Korea.

• Reduced tariffs enabled Kolbus to secure new customers in South Korea and boost its export business.

• Kolbus machines improve work safety standards in South Korea.

Kolbus, founded in 1775, is a German company from North Rhine-Westphalia which specialises in book binding and paper processing machines. As manufacturers of a highly specialised niche product the company is susceptible to adverse affects of economic volatility. When the threat of the global financial crisis hit in 2008, Kolbus’ export activities – which currently constitute 80% of its total business – averted any potential loss of jobs within the company. The strength of the company’s exports rests on the 2011 trade agreement between the EU and South Korea. Since the ratification of the ageeement Kolbus has doubled its export output to South Korea.

A decisive factor in Kolbus’ success in South Korea is that customs duties have fallen from 8% to nill under the agreement. Kolbus CEO, Kai Büntemeyer, explains that “this leads to an enormous psychological advantage with the customer. And the potential savings of at least €25 000 per machine are, of course, also not exactly neglegible.” Among the goods that played an important role in German exports to South Korea in 2015, machinery came second at a total value of around €3.14bn (only after vehicles at a value of over €6bn).

Would you have thought? • Due to abolished customs duties, consumer prices

for Kolbus machines in South Korea were reduced by at least €25 000 each.

     

 

                                               

                   

Makers of highly specialised products bank on exports. At Kolbus, exports constitute 80% of the total business.

“In extremely niche markets such as the production of book binding and paper processing machines you can only be competitive if exports make up a large share of your business. That way you can balance out economic volatility and secure jobs in Germany.”

The trade agreement between the EU and South Korea The trade agreement between the EU and South Korea came into force in July 2011. It is the first such EU agreement with an Asian country. The treaty removes a number of customs duties between the two countries – for instance on vehicles, pharmaceuticals, medical and electronic devices. More on EU trade relations with South Korea: http://ec.europa.eu/trade/policy/countries-and-regions/countries/south-korea Check out more examples of small businesses that export from the EU: http://ec.europa.eu/trade/stories/exporter-stories

By allowing highly specialised engineering companies to be competitive, trade agreements secure jobs in Germany.

Kai Büntemeyer, CEO of Kolbus GmbH & Co. KG

Did you know? • Since the trade agreement entered into force in

2011, the value of German exports to South Korea has increased by more than 70 per cent. In 2015 it was €17.9 billion.

• At a value of €3.14 billion, machinery was the second most valuable type of export from Germany to South Korea in 2015.