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Country Commercial Guides FY 2000: Netherlands Report prepared by U.S. Embassy The Hague, released July 1999 Note*

CHAPTER I. EXECUTIVE SUMMARY

This Country Commercial Guide (CCG) presents a comprehensive look at the Netherlands' commercial environment, using economic, political and market analysis. The CCG's were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at U.S. Embassies through the combined efforts of several U.S. Government agencies.

The United States' partnership with the Netherlands is its oldest continuous relationship and dates back to the American revolution. Our excellent bilateral relations with the Netherlands are based on close historical and cultural ties and a common dedication to individual freedom and human rights. An outward looking nation, the Netherlands shares with the U.S. a commitment to open markets and free trade. The two countries share similar positions on a number of trade and policy issues and work together bilaterally and through multilateral organizations on matters concerning trade, economic cooperation, and regional and global problems.

The Netherlands is about the size of the State of Maryland, with a population of 15.7 million.

So why should American exporters "Go Dutch?"

The Netherlands is one of the top dozen trading countries in the world. It is ranked 11th in GNP, eighth in imports of goods and services from the U.S., and recently overtook the United Kingdom and Japan to become the largest foreign investor in the U.S. The U.S. is the largest foreign investor in the Netherlands and has its largest bilateral trade surplus in the world with this country ($12 billion in 1998).

In the context of international trade the Netherlands is a key center within the global business network. Its advanced infrastructure is geared towards the transportation of goods, people, and electronic data. Core distribution points within the Netherlands include Rotterdam, the world's largest port, and Amsterdam Schiphol Airport. The importance of international trade for the Netherlands is underlined by the fact that more than half of the Gross Domestic Product (GDP) is generated by activities beyond the national borders.

Over 160 million consumers (more than half the population of the European Union) live within a 300-mile radius of Rotterdam. Use of English is widespread and seventy-three percent of the Dutch population are fluent in one or more foreign languages.

The Dutch economy remains one of Europe's economic powerhouses, and continues to display sustained, albeit slowing GDP growth combined with sharply falling unemployment and moderate inflation. The impact of sharply falling world trade growth is expected to be relatively mild compared to that of the economic downturn in the early 1990's. This is primarily because the Netherlands successfully addressed the issues of public finances and stagnating job growth long before its European partners. Reforms are continuing with a stronger emphasis on market flexibility. While the economy grew a solid 3.8 percent in 1998, the government estimates that the slowdown in world trade will cause Dutch GDP growth to shrink to an annual average of just 2 percent in 1999 and 2000. OECD and Dutch financial sector forecasts are slightly more optimistic, predicting average GDP growth of well over 2 percent. Reduced economic activity is expected to arrest the fall in unemployment at a level of 5 percent of the labor force, while softening consumer price inflation to just one percent. The Netherlands was one of the first EU member states to qualify for Economic and Monetary Union in May, 1998, and Dutch budget deficit and stock of public debt are converging below or closer to EMU deficit and debt criteria.

The range of export potential for products and services in the Netherlands is amazingly broad-based. American industrial and consumer goods, as well as services, have a reputation for quality. American exporters considering the Dutch market should follow the conventional wisdom which states that an American product with strong sales in the U.S., can expect to do well in the Netherlands.

The country's strategic location combined with the relative ease of doing business makes the Netherlands an ideal European operations location for American companies. The Netherlands boasts a world-class and user-friendly transportation and distribution infrastructure, as well as a full menu of business services. Companies may want to start by taking advantage of the state-of-the-art Dutch distribution system which includes "value added logistics" (VAL) services.

More than 7,000 U.S. companies have appointed Dutch agents and distributors in the Netherlands. Approximately 1,600 American companies or affiliates have operations in the Netherlands, employing over 150,000 people. Many American companies locate Dutch distributors through participation in trade events, and by taking advantage of the services offered by the U.S. & Foreign Commercial Service, which are designed to support the matchmaking process.

American firms expanding into Europe should seriously consider the Netherlands as a springboard into the rest of Europe - geographically, structurally and culturally the most logical choice.

If you are interested in doing business in the Netherlands, the American Embassy should be your first point of contact. If we do not know the answer to your questions, we know who does. Please direct your inquiries to the U.S. & Foreign Commercial Service, Phone: (31) 70 310 9417; Fax: (31) 70 363 2985.

Detailed information on our services and programs in the Netherlands is available on the World Wide Web at http://users.bart.nl/~ustrade

For information on the U.S. Department of Commerce's programs in Europe, see http://www.sce.doc.gov

Country Commercial Guides can be ordered by U.S. exporters in hard copy or on diskette from the National Technical Information Service (NTIS). Please contact the NTIS at 1-800-553-NTIS for more information. Country Commercial Guides can be accessed via the World Wide Web at http://www.STAT-USA.gov; http://1997-2001.state.gov/; and http://www.mac.doc.gov. U.S. exporters seeking general export information/assistance and country-specific commercial information should contact the U.S. Department of Commerce, Trade Information Center by phone at 1-800-USA-TRADE or by fax at (202) 482-4473.