Belgium Country Brief
Overview
Australia enjoys positive and constructive relations with Belgium, with a growing bilateral commercial relationship. We share similar approaches to many international issues, including climate change, arms control, whaling and Antarctica. Australia and Belgium are partners in NATO's International Security Assistance Force (ISAF) in Afghanistan. Belgium is a member of the Australia Group on Chemical Weapons.
The Australian community in Belgium is estimated at 700 and an estimated 5100 persons in Australia were born in Belgium.
The European Council and the European Commission are based in Brussels and the North Atlantic Treaty Organisation (NATO) also has its headquarters there.
Political Overview
System of Government
Belgium is a constitutional monarchy and King Albert II (who acceded in 1993) is head of state. The country became a federal state in 1995. There are three main forms of government in Belgium: the federal government, regional governments and community councils. The Federal government is responsible for issues such as justice, the interior, foreign policy, defence, social security and some health matters.
Belgium is divided into three regional government areas. Flanders comprises mainly Dutch speakers while Wallonia and Brussels are French speaking regions (a small German speaking community also exists). The regions have jurisdiction over a wide range of policy areas, including economic, transport, public works, and industrial policy. Education and other ‘cultural issues' are devolved to three community councils that have similar levels of authority to regional governments. These are divided along linguistic, not geographic, lines representing the Dutch, French and German speaking peoples.
The Belgian government devolved agriculture and foreign trade responsibilities to the regional governments through part of a June 2001 institutional reform program. The regions were also granted greater fiscal autonomy, and there was a restructuring of finances for the linguistic community councils.
Major Parties
There are four main groups of mainstream political parties in Belgium, which are then split along linguistic lines: Christian Democrat (CD&V-NVA-CdH); Liberal (VLD-MR); Socialist (PS-SPA-SPIRIT); and Environment Groups (Ecolo-Groen). The far-right Vlaams Belang party is also a key player, particularly in Flanders, although Belgium’s other political parties have agreed to not enter into coalition agreements with the Vlaams Belang, in an arrangement known as the cordon sanitaire.
Political Developments
On 20 March 2008, Flemish Christian Democrats leader, Yves Leterme was sworn in as Belgium’s Prime Minister. Leterme leads a five party coalition government with five Deputy Prime Ministers (one per coalition partner) and fourteen ministers.
The new Government has reconfirmed Belgium’s commitment to the EU and NATO and is looking ahead to Belgium’s EU presidency in the second half of 2010. The Government has committed to increasing its development spending, supports the successful conclusion of the Doha Round and has reiterated that the Balkans and central Africa are focal points for Belgian foreign policy.
A key Government priority will be to enact a national employment strategy with the aim of creating 200,000 new jobs by 2011. Initiatives have also been proposed to lower taxes, increase pensions, boost economic activity, stimulate small business, get tough on immigration, enhance security and improve public health.
Economic Overview
Since 1921 Belgium has had an economic union with Luxembourg, the Belgium-Luxembourg Economic Union (BLEU). Both Belgium and Luxembourg have sophisticated open market economies although, as members of the EU, their agriculture sectors remain subject to market access limitations. Currency in Belgium is the Euro. GDP per head at market exchange rates stood at US$A41,605 in 2007.
Belgium is a major trade gateway to the rest of Europe. Belgium's top export markets are its neighbours in the EU - Germany, France and the Netherlands. More than two-thirds of Belgium's GDP is derived from foreign sales, one of the highest percentages among industrialised nations.
Figures released by the National Bank of Belgium (NBB) indicated that GDP growth was 2.7 per cent in 2007 which was slightly above the EU-average. This was driven largely by increased domestic consumption, a 4.6 per cent rise in exports and investment growth in excess of 5 per cent. Inflation remained below the EU average at 1.8 per cent and the unemployment rate fell to 7.5 per cent. The NBB forecast is that GDP growth will moderate to 1.9 per cent in 2008.
Bilateral Relationship
Historical Ties
The contemporary bilateral relationship is underpinned by binding historical ties stemming from World War I. Many Australians served in Belgium between 1916 and 1918, especially during the Battle of Messines, 7 June 1917, and the Third Battle of Ieper (Ypres), 31 July to 6 November 1917. More than 12,500 men of the AIF died, of whom half have ‘no known grave’.
As part of Australia’s commemoration of the 90th anniversary of major battles that took place on the Western Front in 1917 and 1918, the Minister for Veterans’ Affairs, the Hon Alan Griffin MP visited Belgium on 22 April 2008. Mr Griffin held discussions with Flemish officials and viewed places of interest to Australian war commemorations, including the “In Flanders Field Museum”, the Passchendaele 1917 Museum, Menin Gate, Buttes-Polygon Wood Cemetery and Tyne Cot Cemetery.
In 2007, the Governor-General, His Excellency Major General Michael Jeffery visited Belgium twice to represent Australia at WWI related commemorative events including a ceremony to re-interred the bodies of five Australian soldiers at Buttes New British Cemetery.
Agreements
Australia and Belgium have concluded a number of bilateral agreements, including agreements on Health and Social Security and a Working Holiday Maker arrangement (WHMA). The WHMA program enables young Australians and Belgians (18-30 years of age) to have an extended holiday in the other country by supplementing their travel funds through incidental employment, and to experience closer contact with a local community.
High Level Visits
High level visits are important in promoting cooperation and understanding between Australia and Belgium.
From 8 to 12 April 2008, an Australian Parliamentary Delegation, led by the President of the Senate, the Hon Alan Ferguson, visited Belgium for meetings with Belgian parliamentarians and to visit World War I commemoration sites around Ypres.
In April 2008, the Prime Minister, Mr Rudd, visited Brussels for EC talks and held a meeting with Prime Minister Leterme in Bucharest in the margin of the NATO Summit.
In April 2008 the Minister for Veterans’ Affairs, the Hon Alan Griffin MP visited Belgium and held discussions with the Flemish Minister for Government Policy, Foreign Policy, Media and Tourism, Mr Geert Bourgeois, the Mayor of Ypres, Mr Luc Dehaene and the Mayor of Zonnebeke, Mr Dirk Cardoen.
The Minister for Innovation, Industry, Science and Research, the Hon Kim Carr MP, visited Belgium in March 2008 and the Minister for Trade the Hon Simon Crean MP visited in January.
The Governor-General, His Excellency Major General Michael Jeffery, visited Belgium in July and September 2007 for World War I commemorations and the Hon Eric Abetz, former Minister for Fisheries, Forestry and Conservation, visited Belgium in January 2007.
Bilateral Economic and Trade Relationship
Australia’s investment relationship with Belgium significantly overshadows the trading relationship. In 2006, Belgium was ranked as Australia’s 9th largest source of total investment, valued at $A24.5 billion of which $A2.6 billion was foreign direct investment. Total investment outwards from Australia to Belgium totalled $A1.8 billion of which $A185 million was foreign direct investment.
In 2007, Australia’s total two-way trade in goods with Belgium was valued at $A3.0 billion, consisting of Australian exports of goods to Belgium worth $A1.5 billion and imports of goods worth $A1.6 billion.
In 2007 Australia’s major merchandise exports to Belgium included coal ($A275 million); nickel ($A245 million); zinc ($A204 million); and lead ores and concentrates ($A188 million). Australian imports from Belgium included passenger motor vehicles ($A388 million); medicaments (including veterinary) ($A155 million); medical and pharmaceutical products ($A92 million); and pearls and gems ($A64 million).
Australia exported $A167 million worth of services to Belgium in 2006-07. Major services exported were personal travel ($A41 million) and financial services ($A18 million). Services imports from Belgium were valued at $A60 million in 2006-07 and dominated by personal travel ($A15 million) and other business services ($A14 million).
Tourism between Australia and Belgium is rising and over 10,000 Belgians visit Australia each year.
Australian Business Successes in Belgium
With a GDP of US$A442.8 billion and a population of 10.6 million (2007), Belgium offers investment and business opportunities for Australian companies.
Australian companies successfully operating in Belgium include: Cochlear, the global leader in research and development and manufacturer of implantable hearing solutions; De Bortoli Wines, which has a major wine distribution branch in Belgium distributing wines throughout continental Europe; and the Macquarie Group, which owns 75 per cent of Brussels Airport.
In the mining sector, Australian companies Rio Tinto Diamonds NV and BHP Billiton Diamonds sell rough diamonds through their Antwerp offices to Europe. Nyrstart, a joint-venture between Australian zinc miner Zinifex and Belgium metals company Umicore, has major smelting operations in Belgium in Balen and Overpelt.
Export Opportunities
Belgium is an important destination for Australian coal, lead ores and medicaments. Other major export items from Australia to Belgium include confidential items (e.g. diamonds), other ores and alcoholic beverages.
Despite being one of the smaller European countries, Belgium has a state-of-the-art telecommunications system and transport infrastructure, a highly productive, multilingual workforce and a government eager to attract foreign investment. Its strategic position in the centre of Europe and its transport links make it ideal for distribution activities.
TradeWatch Contacts
If you would like more information on the trade and economic conditions in Belgium, please e-mail the Department of Foreign Affairs and Trade.
Last reviewed date: 13/06/2008