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Netherlands Country Brief

Introduction

Australia has close and productive relations with the Netherlands. There is a wide network of contacts, including through government, private organisations and personal links, enhanced by the striking similarities between our two societies. People-to-people links underpin our political and economic contacts – there are over 300,000 Australians of Dutch origin. Australia and the Netherlands have strong commercial ties, particularly in direct investment, and both sides recognise that there is potential for further development of business links.

The Netherlands is a valuable like-minded interlocutor on global issues ranging from international security challenges to trade policy. A focus of cooperation is our partnership with the Dutch in a Provincial Reconstruction Team in southern Afghanistan's Oruzgan Province, under the NATO-led International Security Assistance Force Stage III.

Political overview

System of Government

The Kingdom of the Netherlands is a constitutional and hereditary monarchy with a bicameral parliament (Staten-Generaal). The Head of State, Queen Beatrix, succeeded to the throne in 1980 and marked her Silver Jubilee on 30 April 2005. Executive authority is exercised through the Prime Minister, who presides over the Council of Ministers (Cabinet). There are three levels of government: national, provincial and municipal. The Netherlands is divided for administrative purposes into twelve provinces, each administered by a directly-elected Provincial Council, a Provincial Executive and a Sovereign Commissioner, who is appointed by Royal Decree.

General elections for the national government are normally held every four years, using a system of strict proportional representation. The upper house of Parliament, the First Chamber, consists of 75 members indirectly elected by members of the 12 Provincial Councils. The Second Chamber of Parliament, which is roughly equivalent to the Australian House of Representatives, has 150 members elected by universal adult suffrage. It alone has the right to initiate legislation and amend bills submitted by the Council of Ministers. Under the system of proportional representation, no single party has ever won an outright majority, necessitating coalition governments. Further information on the Government of the Netherlands is available from their website.

Recent political developments

The present government is a coalition formed between the Christian Democrats (CDA), Labour Party (PvdA) and Christian Union (CU). The formation of this coalition was announced on 13 February 2007 following the general election of 22 November 2006. In these elections the Christian Democrats (CDA) won 41 seats, the Labour Party (PvdA) 33 seats and the Socialist party 25 seats. The results offered no clear coalition as 76 seats are required for a majority.

The Cabinet contains sixteen Ministerial positions, with eight going to the CDA, six to the PvdA, and two to the CU. There are also eleven State Secretaries, or junior ministers. Mr Balkenende remains Prime Minister, although there have been changes to key Ministerial positions. Mr Wouter Bos (PvdA) became Deputy Prime Minister and Minister for Finance, Mr Maxime Verhagen (CDA) is Minister for Foreign Affairs, Mr Eimert van Middelkoop (CU) is Minister for Defence, and Mr Bert Koenders (PvdA) is Minister for Development Cooperation. A full list of Ministers and State Secretaries is available from the Government of the Netherlands website.

Economic overview

The Netherlands has a wealthy and open economy heavily reliant on foreign trade. It is the world's seventh largest exporting country and the sixth-largest source of direct investment. The economy is noted for stable industrial relations, moderate unemployment and inflation, a sizeable current account surplus, and an important role as a European transportation hub. The Netherlands is also one of the world’s largest agricultural exporters in value terms.

The Netherlands is also a popular base for foreign investment. Numerous factors contribute to this, including the country's geographic position in relation to other EU economies, a skilled and well-educated workforce with multilingual abilities, and an excellent IT and communications infrastructure.

Economic developments

After a period of sluggish growth, the Dutch economy picked up in 2004 with GDP growth of 2.0 per cent. After a dip in 2005 to 1.5 per cent, growth rose again to an estimated 2.9 per cent in 2006. This was driven primarily by an increase in domestic consumption (after accounting for the distortion created by health insurance financing reform). The Economist Intelligence Unit predicts that economic growth will be 2.8 per cent in 2008.

Bilateral relationship

Overview

The Dutch Government's major foreign policy objectives are promoting international order, peace, security and stability; reducing poverty in developing countries; and maintaining and fostering good bilateral relations. The Dutch have a reputation for being strong internationalists and this is reflected in their foreign policy. As a trading and entrepreneurial country, they see a European single market and an open global trading system as in the national interest. As large net EU budget contributors, they continue to push for reform of the Common Agricultural Policy, particularly in the context of EU enlargement.

The Netherlands undertakes defence cooperation with a number of EU countries, including Germany and the United Kingdom, as well as with Australia in Afghanistan. The Dutch are also close allies of the US within the NATO context. Mr Jaap de Hoop Scheffer, a former Dutch Minister for Foreign Affairs, was appointed Secretary General of NATO in 2004.

In the wake of 11 September 2001, and after Madrid's train bombing in March 2004, the Dutch have been working with other EU countries on cooperative measures to combat terrorism. Mr Gijs de Vries, former State Secretary of the Interior and former Dutch representative in the European Parliament, served as the EU's first Counter-Terrorism Coordinator from 2004 to 2007.

The Netherlands has an active interest in terrorism in Australia’s region. It was directly affected by the Bali Bombings in October 2002, in which two Dutch citizens died. The Netherlands, along with other EU members, supported the United Nations listing of Jemaah Islamiyah as a terrorist organisation. The Netherlands has also assisted in strengthening counter-terrorism measures in Australia's region, contributing to the Jakarta Centre for Law Enforcement Cooperation (JCLEC) in Indonesia. Australian and Dutch officials regularly consult on counter-terrorism matters.

High level visits

The Minister for Finance and Deregulation, Lindsay Tanner, visited the Netherlands in July 2008.  During the visit Mr Tanner met the Minister for Economic Affairs, Maria van der Hoeven and the State Secretary for Finance, Jan Kees de Jager.

The Netherlands Minister for Defence, Eimert van Middelkoop, visited Australia in March 2008. He met with the Minister for Foreign Affairs, Stephen Smith and the Minister for Defence Joel Fitzgibbon.

Australia’s Prime Minister Kevin Rudd met with the Netherlands’ Prime Minister Jan Peter Balkenende in Bucharest in early April 2008 where they were attending a NATO Heads of Government summit meeting.  The two Prime Ministers also met during the Olympic Games in Beijing.  

Afghanistan

Cooperation with the Dutch in Afghanistan is a key element of the bilateral relationship. On 8 May 2006, it was announced that Australia would partner with the Netherlands in a Provincial Reconstruction Team in southern Afghanistan's Oruzgan Province. Approximately 400 Australian Defence Force (ADF) personnel contribute to a Reconstruction Task Force in Oruzgan Province, working closely with Dutch forces to deliver reconstruction and community-based projects. This valuable work includes skills development and engineering projects and helps both to strengthen local capacity and to increase Afghan security.

On 10 April 2007 it was announced that a Special Operations Task Group of about 300 personnel would deploy to Oruzgan for at least two years. The existing Reconstruction Task Force (RTF) Protection Company Group (about 120 personnel) will be extended and will continue to provide close protection to RTF personnel until August 2008. Expanded air, logistics and intelligence capabilities are also part of this deployment. The newly deployed forces operate in direct support of ISAF elements in Oruzgan, and operate under an Australian commander working within the ISAF framework.

In late December 2007, the Dutch Parliament agreed to extend the Oruzgan mission by two years until 2010.

For further information on Australia’s contribution to the International Security Assistance Force, please visit the Department of Defence website. Information on the Dutch component of the mission is available from the Dutch Ministry of Defence.

Aid

The Netherlands is a significant aid donor, committing 0.8 per cent of GDP to Overseas Development Assistance. The majority of this is contributed through multilateral organisations. The Netherlands is also one of the largest contributors to the Jakarta Centre for Law Enforcement Cooperation, founded by Australia and Indonesia in February 2004.

EU/European Issues

The Dutch have been active in the debate on the future model of the EU. The present coalition government agreement calls for the safeguarding of subsidiarity and democratic scrutiny by amending or consolidating existing EU treaties. The agreement states that the outcome of this process should be “manifestly different” from the constitutional treaty that the Dutch people rejected in a June 2005 referendum.

The Netherlands is concerned about increased spending pressure for agricultural subsidies and structural funds, and continues to push for reform of the Common Agricultural Policy. The Dutch accepted the introduction of the euro quickly, being the first euro area country to phase out its national currency.

International Organisations

The Hague is the seat of a number of international legal organisations, including:

The Global Reporting Initiative (GRI), an institute affiliated with the United Nations that promotes guidelines for economic, environmental and social reporting, established its permanent headquarters in Amsterdam in 2002.

2006: The 400th Anniversary of Dutch-Australian contact

In 2006, Australia and the Netherlands commemorated the 400th anniversary of the first recorded European landing on the Australian mainland by the Dutch ship, the Duyfken. The formal launch of the Netherlands-based commemorations marking the anniversary took place in The Hague on 30 January it was attended by Prime Minister Dr Jan Peter Balkenende, other senior Ministers and the Crown Prince and Princess.  The Governor-General, Major-General Jeffrey, attended the launch of the Australia-based commemorations in Canberra on 10 February.  During his visit to Australia, Prime Minister Balkenende, together with former Prime Minister Howard, launched a replica of the Duyfken on its commemorative voyage around Australia.

A Memorandum of Understanding between the Australian National University (ANU) and Leiden University in the Netherlands for a joint research project on South-East Asia was signed in October in the presence of the Crown Prince and Princess.  The Australian Government will provide $350,000 in seed funding for the project, matching a similar contribution by the Dutch Government. The project, with a focus on South-East Asia and Islam, will not only strengthen the bonds between young researchers in both countries, but will increase contact with universities and researchers in South-East Asia.

Australia and the Netherlands have negotiated a number of bilateral agreements, which are available from the DFAT Treaty database.

Bilateral economic and trade relationship

Trade

The Netherlands is a significant trading partner for Australia within Europe, and is Australia’s fifth-largest goods and services trade partner in the EU, with a total value of A$5.3 billion. Two-way merchandise trade was worth approximately A$4.2 billion in 2007, with a trade surplus for Australia of approximately A$1.3 billion. Australian merchandise exports to the Netherlands grew to total A$2.8 billion in 2007.  Major exports included coal, zinc ores and concentrates, and medicaments (includes human and veterinary medicines, hormones, insulin) and wine. In 2007, Australia imported merchandise valued at A$1.5 billion from the Netherlands, including medicaments, road tractors for semi trailers and mechanical handling equipment.  Total services trade with the Netherlands in 2007 was A$1.1 billion, with recreational travel the major export.

Whilst the Netherlands' trade policy settings are determined at the European Union level, Australia and the Netherlands share many common objectives in international trade policy.

Investment

The investment relationship between Australia and the Netherlands is a significant one. The Netherlands is Australia's fourth largest source globally of foreign direct investment (FDI) after the US, UK and Japan, with direct investment of A$25.3 billion in 2007. Numerous major Dutch businesses are established in Australia, including Royal Dutch Shell, Philips, ABN-AMRO, Rabobank and ING.

Export opportunities

The Australian Trade Commission (Austrade) is the Federal Government agency that helps Australian companies win overseas business for their products and services by reducing the time, cost and risk involved in selecting, entering and developing international markets.

Austrade’s Opportunities Online website is a valuable starting point for information on export opportunities to many countries, including the Netherlands.

Austrade maintains an office in the Netherlands. For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au

Tradeinfo Contacts

If you would like more information on the trade and economic conditions in the Netherlands, please email the Department of Foreign Affairs and Trade.

Last reviewed date: 26/08/2008