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US-The Netherlands Trade Relations: A Commitment to Free Trade
The Start of the Commitment

The Netherlands is a small independent European nation located on the North Sea. It was often called Holland after a historic region which is now a part of the modern nation. From an early economy based on fishing and commerce, the western areas of the Netherlands later developed shipbuilding, diamond cutting and other industries which manufacture cocoa, chocolate, gin and liqueurs. The latter comes from raw materials provided by overseas areas.

The Industrial Revolution did not begin on a large scale until the development of Limburg coalfields in the late 19th century. The 1930 Depression and the remnants of World War II left the nation impoverished. However, recovery and expansion of trade and industry proceeded rapidly after 1950 through closer economic ties with the Benelux Economic Union named after the three nations involved - Belgium, the Netherlands and Luxembourg. The European Community (EC) contributed to the growth as well. Except for natural gas, the Netherlands imports industrial raw materials. As a result, the major port complexes of Rotterdam and Amsterdam were utilized in order to promote major industrial regions. The leading manufactures are processed foods, metal and engineering products, electrical and electronic machinery and equipment, chemicals, petroleum products and natural gas.

Dutch agriculture became increasingly more intensive and specialized after the shift to imported grains during the 1870s. The leading exports are butter and cheese which include varieties named after the Dutch communities of Gouda and Edam. Tulips and other flower bulbs, tomatoes, cucumbers and lettuce play a vital part in the agriculture of the Netherlands as well.

In most years, exports slightly exceed imports in value. Majority of the Netherlands' trade is with other EC members - especially with Germany - and the United States. In fact, its relationship with the latter dates back from the American Revolution. The Netherlands was the first European Country to grant the United States the so-called diplomatic recognition. These two countries joined NATO in 1949 and became allies in the Korean and Gulf Wars. They also stood together in peacemaking efforts in Yugoslavia, Iraq and Afghanistan.

Major Imports and Exports between the Two Nations

Exports of the Netherlands contributing on a large scale in world economy include petroleum products and natural gas, chemical products, machinery and transportation equipment and foodstuffs. Imports, on the other hand, are comprised of crude, petroleum, machinery, chemical products and foodstuffs. Its trade relations with the United States is overwhelming, making the latter the third largest foreign investor in the Netherlands while the Netherlands ranks fourth among the direct foreign investors in the US. Per records of the US Census Bureau, as of the eight-month period ending August 2008, balance of trade was recorded as follows: US Exports to the Netherlands - $27.57 billion; and US Imports from the Netherlands - $14.43 billion. The statistics for the entire 2007 were tracked with the following data on hand:

  • The Netherlands' Exports to the US. For the year 2007, $18.42 billion worth of exports to the US came from the Netherlands. Out of this total amount, $3.47 billion or 18.84% came from other petroleum products. Other pertinent products on the list were: US goods returned and reimports; other industrial machinery; nuclear fuel materials and fuel; wine and related products; other scientific, medical and hospital equipment; industrial organic chemicals; medicinal, dental and pharmaceutical preparations; fuel oil; and other soft beverages and processed coffee. The latter garnered for itself an income of $366.54 million or 1.99% of 2007's total.
  • The Netherlands' Imports from the US. US products going to the Netherlands have always increased throughout the years. As evidence to this, it garnered a total of $32.99 billion for the year 2007 alone. Of this total, 12.03% or $3.97 billion went to pharmaceutical preparations. Other products found on top of the charts were: telecommunications equipment; organic chemicals; medicinal equipment; computer accessories; fuel oil; other household goods; plastic materials; civilian aircraft parts; and other chemicals. Other chemicals totaled to $795.88 million or 2.41% of the total for 2007.
  • Fastest-Growing US Exports to the Netherlands. There are a lot of United States' products gaining fast recognition in the Netherlands' market. With this regard, five notable commodities made it to the top-ranking items in terms of sales increase. On top of them all were wheat which earned $17.53 million equivalent to an all-time high of 28,274%. Other items comprising the list were: sorghum, barley and oats; bodies and chassis for passenger cars; glassware and chinaware; other coals and fuels. The last item recorded total sales of $164.62 million or 372% from 2006.
  • Fastest-Growing US Imports from the Netherlands. Imported goods from the Netherlands' made their remarkable stint in the US market as well. As proof to this, zinc made it to the top with $1.77 million or a commendable sales increment of 7,379%. Included in the list are: other commercial vessels like barges and tugboats; cocoa bans; liquefied petroleum gases; and pleasure boats and motors. The last product garnered a sales increase amounting to $63.4 million which is 501.6% higher than its sales in 2006.
Treaties between the United States and the Netherlands

The commitment of these two nations to free trade came from a number of trade agreements. With their desire to stay ahead of any other tandem in international trade, they have strengthened their bonds by way of signing pacts. The following are the most recognized treaties between the United States and the Netherlands:

  • The Netherlands Friendship, Commerce and Navigation Treaty. This was signed in The Hague in March 27, 1956 and was entered into force on December 5, 1957. This did not merely focus on strengthening the bonds of peace and friendship. It also concentrated on economic and cultural relations between the people of these nations. It was also a form of commitment for investments and establishment of equal rights and privileges.
  • Tax Convention Amendment. This was amended in March 8, 2004 to intensify the quest against double taxation and other income tax related issues. This was done in order to construe with the tax laws provided by the US Treasury's current tax policies. It further provided for the taxpayer's option to extend his benefits from the unmodified convention one year from the date the modified convention took effect.
  • Dutch-American Friendship Day. This is probably the longest running event for the Dutch and Americans. Tracked since April 19, 1782, this was celebrated yearly in order to signify the start of the unification of these two nations. This is relevant in the history of both nations and had guided all other trade and social related aspects of their comradeship. This was also helpful in the establishment of the first US embassy in the world.
Conflicts between the United States and the Netherlands

Because of their strong bond, trade conflicts between the United States and the Netherlands were minor in nature. The barriers were not really geared on trade itself but some other factors in the community. The disputes seen were as follows:

  • US Poultry in the World Market. US poultry's positioning in the world market was made stiff by the presence of Brazil, France and the Netherlands. The latter was the US's main competitor in the Russian market from 1994 to 2000.
  • Free Trade and Illegal Drugs. There was this speculation spreading elsewhere that the free trade between the two nations as well as US's trade with other European economies, might have led to illegal drugs coming to and from the borders of the United States. It was too sad to note that there were differences on treatment of these issues where European illegal drug laws were a bit more relaxed than that of the US. The United States, however, was making a proposal to legalize marijuana in the country.
The Future of US-Dutch Trade Relations

Much has been said about the overwhelming commitment between the US and the Netherlands. They stood side by side in order to conquer all the wars in the world. They were never rattled by the conflicts associated with trade. They have also struggled to persevere more with the billions of dollars seen in their trade balances.

With the Dutch-American Friendship Day, every aspect of their socialization - whether it is for business or for socialization - will surely soar to greater heights. For more than a century now, the celebration will definitely continue and it could always be a milestone in both their histories. Keeping the faith on their free trade alliance will make the future generations benefit from their pacts.

Every year shows records of exports and imports that form part of their actual interest to make their trade flourish. At some points, there may be a decrease but these data are insignificant when it comes to their entire business relations. Time and again, they have sailed the tough seas together and because of this they have valued the positive side more than they think of the barriers to their economic relations.

US-Netherlands Trade References

  • http://www.state.gov/r/pa/ei/bgn/3204.htm
  • http://www.census.gov/foreign-trade/balance/c4210.html
  • http://www.census.gov/foreign-trade/statistics/product/enduse/imports/c4210.html
  • http://www.census.gov/foreign-trade/statistics/product/enduse/exports/c4210.html
  • http://tcc.export.gov/Trade_Agreements/All_Trade_Agreements/exp_005868.asp
  • http://en.wikipedia.org/wiki/Netherlands-United_States_relations
  • http://www.worldcat.org/oclc/56604889
  • http://www.treas.gov/press/releases/reports/tenether04.pdf

  • Note: Trade statistics, industry links, economic projections and global business resources on this page have been compiled from hundreds of trade related websites, government guides and resources on the Internet. We provide this valuable information for industrial suppliers, manufacturers, exporters and importers seeking to enter or expland business opportunities in Netherlands.

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