International Trade in the Netherlands

News Related to International Trade in the Netherlands

Business outline for the Netherlands

Main Industry Sectors

The agricultural sector represents 3% of the country's GNP. The profits from production are high and the use of the agricultural surface area is very intensive. Nearly 60% of the production is exported, either directly or through the food industry, what makes of the Netherlands the third exporter of agricultural products in the world. Cereals, potatoes and horticultural products are the main crops.
Industrial activity, practically, generates nearly a quarter of the GNP through food-processing, the petro-chemical industry, metallurgy and also the transport equipment industry. The Netherlands is also amongst the major producers and distributors of oil and natural gas.
Services account for more than 70% of the national income and they are mainly centered on transportation, distribution, logistics, banking and insurances.

Economic Overview

The Netherlands entered into recession after the second trimester of 2008, the country was strongly affected by the international crisis due to its dependence on foreign trade.  Its GDP experienced a historic contraction of -4% in 2009.  The revival of global trade has allowed the country to recover with a slow growth drawn by the exports in 2010, estimated at 1.8%. 

The crisis plunged public finance into the red, beyond the limits of the European Stability and Growth Pact. The public deficit is estimated at 5.8% of the GDP in 2010, and the public debt is close to 65% of the GDP.  The priority of the government is to consolidate the budget and its objective is to bring the deficit to 3% of the GDP by 2013.  The government has established reforms intended to strengthen the financial sector and the management of the population's ageing is also essential.

The Netherlands presents high incomes per capita with an equal distribution of revenues.  The unemployment rate is rising but it still remains at less than 5% of the active population.

FDI in Figures

The Netherlands is one of the European countries that attracts most of direct foreign investment (FDI).  A strong international orientation and a liberal policy towards foreign investment are the characteristics of the Netherlands' policies in this field.  Many Dutch companies are multinational by nature and a large number of these are listed on the foreign stock markets.  There are no regulatory restrictions on foreign direct investment. 
The Netherlands had shown an increase of its FDI stock until 2007; however, due to the financial international crisis, the FDI flows declined in 2008.  They have begun to increase again, a trend that should remain. 

The global investment report of the UNCTAD classifies the Netherlands as a front runner in what concerns countries with a high potential and a good performance for FDI.

FDI Government Measures

The Dutch economy is amongst the most open in the world. Since January 2007, the Dutch taxation environment for international companies has become even more attractive. The company taxation rate has dropped by 25.5%, which is well below the European Union average. The whole of the government measures can be referred to on the Netherlands Foreign Investment Agency website. 

Country Strong Points

The Kingdom's strong points are highly developed communication and transport infrastructures, a skilled, productive  and multilingual labor force, a strategic geographical location which is a gateway towards major European markets, a stable political and macro-economic environment and a very developped financial sector.

Country Weak Points

The country's weak points are the high cost of labor, the limited domestic market, relatively complicated legislation, a cumbersome administrative system and a structurally faulty road infrastructure.

Foreign Trade Overview

The Dutch prosperity has always been based on its international trade.  Its level of openness (imports plus exports of goods and services) usually surpasses 100% of the GDP, which makes of its economy one of the most open and  foreign trade-oriented.  The Netherlands has the biggest European harbor at Rotterdam, thanks to its geographical situation. 

Foreign trade has experienced a significant drop during the crisis but due to its high technology industries and services, the Netherlands remains as one of the main pillars of the economy.  Exports as well as imports have revived in 2010 and the country should reach a small growth in 2011.  The country has a structural positive trade balance, a trend that should continue. 
The country's main trade partners are the European Union, the United States and China.