Travel

Netherlands Country Brief

Introduction

The Netherlands is located in north-western Europe. Its capital is Amsterdam, while the Dutch Government and Parliament are located in The Hague. The Netherlands is a parliamentary democracy with a constitutional monarchy, with Queen Beatrix the current head of state. Long renowned for its internationalist outlook, the Netherlands was a founding member of the European Union (EU), UN, NATO and OECD. With Belgium and Luxembourg, it is also a member of the Benelux Economic Union.

The Netherlands is host to seven international legal organisations: the Permanent Court of Arbitration, the International Court of Justice, the Hague Conference on Private International Law, the Iran US Claims Tribunal, the International Criminal Tribunal for the former Yugoslavia, the International Criminal Court, and the Special Tribunal for Lebanon. The first six are situated in the Hague as is the EU's criminal intelligence agency, Europol. The Hague is sometimes referred to as the legal capital of the world.

Political Overview

In the Netherlands the political powers of Queen Beatrix, the head of state, are largely ceremonial although the Queen can play an influential role in her capacity as neutral arbiter between political parties in the formation of a new Council of Ministers, or Cabinet.

Effective executive authority in Government is exercised through the Prime Minister, who presides over the Council of Ministers and who is usually the leader of the largest party in the Second Chamber, or lower house, of Parliament. The Council of Ministers usually comprises thirteen to sixteen ministers and a number of more-junior state secretaries. 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 First Chamber, or upper house, of Parliament, 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 in the Netherlands, necessitating coalition governments.

Political Developments

The present Government is a coalition formed between the Christian Democrats (CDA, 41 seats), Labour Party (PvdA, 33 seats) and Christian Union (CU, six seats). The formation of the coalition was announced on 13 February 2007 following the general election of 22 November 2006. The Socialist party won 25 seats.

The Council of Ministers comprises 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 Jan Peter Balkenende (CDA) is the Prime Minister. There are two Deputy Prime Ministers: Mr Wouter Bos (PvdA) who is also Minister for Finance; and Mr Andre Rouvoet (CU), who is also Minister for Youth and Family. 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.

Foreign Policy Overview

The Netherlands’ foreign policy is aimed at defending and protecting Dutch prosperity and security on the one hand, and promoting the development of the international legal order on the other. The Netherlands, which is highly dependent on foreign trade, has a direct interest in a stable international legal order. The Netherlands’ Foreign Minister, Maxime Verhagen, has also said that Dutch foreign policy is focused on dealing with the major challenges of our age, which he has cited as including poverty and inequality, climate change, energy scarcity, international terrorism, nuclear proliferation, weapons of mass destruction, human trafficking and the food crisis.

Strengthening regional, plurilateral and multilateral institutions has long been a focus of Dutch foreign policy. The Netherlands is a strong supporter of European integration. It works within EU frameworks to promote “a decisive and democratic Europe” and with European partners to promote prosperity and security, fight crime, deter illegal migration and prevent and respond to terrorism.

In addition to the Netherlands' traditional focus on multilateral and regional institutions, Foreign Minister Verhagen has advocated the need to forge strong alliances with countries that share the Netherlands' western liberal values. In a speech in September 2008, Mr Verhagen noted that in Afghanistan, Australia and the Netherlands stood “shoulder to shoulder” defending the security interests of both our countries.

Mr Verhagen shares Australia's concern at the lack of progress on disarmament. At the May 2008 Disarmament Conference, he said the Netherlands stood ready to work constructively towards a new agenda on disarmament and non-proliferation. The Netherlands also considers missile proliferation to be a growing problem. Mr Verhagen has called for new political initiatives in this area to create more security and stability.

The Netherlands' unique geography means it is one of the countries most vulnerable to climate change. It has long seen climate change as one of the major global challenges of our time and continues to be a strong advocate of international cooperation to urgently address it. It aims to reduce its greenhouse emissions by 30 percent by 2020 and has pushed the EU and other developed countries to adopt a similar target.

The Netherlands believes that innovation and technology deployment and dissemination are crucial for tackling climate change effectively. The Netherlands is a strong supporter of renewable energy and has committed to spend €500 million (A$951 million) over four years (2008-2011) to promote the uptake of renewable energy in developing countries. Being heavily reliant on gas, coal and oil for its energy supply, the Netherlands is a strong proponent of carbon capture and storage (CCS) and is a founding member of the Global Carbon Capture and Storage Institute initiated by Australia.

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 committed to helping achieve the Millennium Development Goals including through promoting women's health and rights and focussing more attention on economic growth and the distribution of wealth. In October 2008, Netherlands Development Minister Bert Koenders announced that the Netherlands would increase its contribution to the Global Fund and that from 2010 the Dutch contribution to the Fund would reach €90 million (A$177.8 million) per year. The Global Fund works to fight AIDS, malaria and tuberculosis.

The Netherlands has a long history of promoting human rights worldwide as an essential part of foreign policy. Foreign Minister Verhagen has said the need to protect people from torture, the importance of freedom of religion and the availability of drinking water were priorities for the Netherlands.

Economic Overview

The Netherlands is a small, wealthy trading nation. With 16.5 million citizens it accounts for 0.2 per cent of world population, 1.4 per cent of world GDP and 3.5 per cent of world trade. The Netherlands has the 16th largest economy and 7th largest financial sector in the world. It has recently overtaken France to become the world's fifth largest exporter of goods (USD634b in 2008) and is the seventh largest importer of goods (USD574b in 2008). Trade accounts for almost one third of GDP, as do financial and business services, while industry and retail each account for around 14 per cent. Agro-food production accounts for around 10 per cent of the economy and about 20 per cent of exports.

Real GDP growth in the Netherlands reached 2.0 per cent in 2008 but the economy is forecast to contract by 4.8 per cent in 2009 and by around 0.5 per cent in 2010. The unemployment rate, although generally the lowest in the EU, is forecast to increase to 5.5 per cent in 2009 and 9.5 per cent in 2010.

The Netherlands has played an important and influential role in the global response to the financial crisis, with many of its ideas and measures picked up by the EU and others, including the G20. The Prime Minister and the Finance Minister have been vocal in calling for stronger supervision of the international banking and finance industries, including strengthening of the IMF and other global financial institutions. They have also urged the freeing of world trade to stimulate the global economy.

Trade and Investment

Most of the Netherlands’ trade is with EU countries, especially Germany and Belgium. The US is the Netherlands’ largest export destination outside Europe, while China is rapidly growing in importance as a supplier. Dutch trade mainly comprises machinery and transport equipment, chemical products, fossil fuels and agricultural products. Russian oil is the largest import, although computers from China come a close second. On the back of the sharp reduction in global trade resulting from the global economic crisis, Dutch exports are forecast to shrink by 16.75 per cent in 2009.

The Netherlands is an attractive prospect for foreign investors given its open economy, outward focus, sound public sector, good social services, modern and effective infrastructure and a dynamic private sector. One in ten private sector employees works for a foreign company. The Netherlands is an important international investor in its own right, being home to a number of large companies with multinational operations, including Royal Dutch Shell, ING Group and Rabobank. The Netherlands has one of the world's most highly developed pension fund industries, with private assets under management far in excess of the levels in most of the other countries in relative terms. In addition, the Dutch venture-capital market is among the best developed in Europe.

Bilateral Relationship

Australia has longstanding, friendly and productive relations with the Netherlands. We share fundamental values and a similar global outlook. The Netherlands is one of our closer European partners on international security and counter-terrorism issues.

Cooperation with the Dutch in Oruzgan Province in southern Afghanistan since May 2006 as part of the NATO-led International Security Assistance Force (ISAF) is the primary contemporary focus of the bilateral relationship. Approximately 800 Australian Defence Force (ADF) personnel work with Dutch personnel in a Provincial Reconstruction Team (PRT) to establish security and deliver reconstruction and community-based projects. Following discussions with Foreign Minister Stephen Smith on 1 April 2009, Dutch Foreign Minister Maxime Verhagen said in a press release that the Netherlands and Australia would continue their excellent cooperation in Afghanistan.

The Netherlands is a valued interlocutor on counter-terrorism matters and has made valuable contributions to the Jakarta Centre for Law Enforcement Cooperation (JCLEC) founded by Australia and Indonesia in 2004. Australian and Dutch officials from a number of agencies regularly consult on counter-terrorism matters.

Australia and the Netherlands frequently exchange views on a number of global and multilateral issues. The Netherlands supports the International Commission on Nuclear Non-Proliferation and Disarmament and is represented on its Advisory Board. It shares many of our views on climate change. It shares our strong commitment to the promotion of human rights internationally. Like Australia, the Netherlands seeks UN reform, including limited expansion of the UN Security Council, and is committed to achieving the Millennium Development Goals.

The Netherlands is an important member of the EU and a valuable interlocutor on EU issues. The Netherlands provided good support for Australia ahead of the launch of the Australia-EU Partnership Framework in October 2008. Australia and the Netherlands share many common international trade policy objectives and we value the contribution the Netherlands makes to debate and policy development on trade issues within the EU.

Australia and the Netherlands signed a bilateral social security agreement on 2 July 2001, to give improved social security protection to people who have lived and/or worked in both Australia and the Netherlands. The social security agreement also exempts Australian employers from the need to provide Netherlands social security support for Australian employees sent temporarily to work in the Netherlands, provided the employee remains covered in Australia, by compulsory superannuation arrangements. Further information is available on the Australian Taxation Office website

Over 300,000 Australians are of Dutch origin. According to the Dutch Central Bureau for Statistics, approximately 14,000 Australians live in the Netherlands, including those with dual-citizenship.

High Level Visits

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 2006. It was attended by Prime Minister Balkenende, other senior Ministers and the Crown Prince and Princess. The then Governor-General, Major-General Jeffrey, attended the launch of the Australia-based commemorations in Canberra on 10 February 2006 and later visited the Netherlands in September 2006. Prime Minister Balkenende visited Australia in April 2006 and, 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 2006 in the presence of the Crown Prince and Princess. 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.

Bilateral Economic and Trade Relationship

The Netherlands is a significant investment and trading partner for Australia. It is Australia’s second largest export market within the EU after the UK. It is home to a number of financial institutions and other companies that operate in Australia including ING Group, ABN-AMRO, Fortis, Rabobank, AEGON, Shell, Unilever, Delta Lloyd, Philips, and Akzo Nobel.

In 2008, the Netherlands was Australia’s 18th largest merchandise trading partner with total exports and imports of A$5.5 billion. In 2008, the value of Australia’s exports to the Netherlands increased by 31.5 per cent to A$3.7 billion. Significant Australian exports to the Netherlands in 2008 included coal, metal ores and medicaments. Significant imports included medicaments, pharmaceutical products and mechanical handling equipment.

Australian services exports to the Netherlands in 2008 totalled A$401 million, mostly recreational travel. Services imports totalled A$767 million.

In 2008, the Netherlands was the fourth largest source of foreign direct investment in Australia (A$25 billion) after the US, UK and Japan, and the eighth largest source of total foreign investment (A$32.9 billion). The Netherlands was the sixth largest destination for total Australian investment abroad (A$30 billion) and eighth largest destination for Australian direct investment abroad (A$5.6 billion).

Trade and Investment Opportunities

The Australian Trade Commission (Austrade) is the Australian Government's trade and investment development agency. Austrade assists Australian businesses to contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia. Austrade delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment; promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment; administers the Export Market Development Grants scheme; undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment; and provides advice to the Australian Government on its trade and investment development activities.

In the Netherlands, Austrade maintains representative offices in Amsterdam and Rotterdam. Austrade's Opportunities Online website is a valuable starting point for information on export opportunities to many countries, including the Netherlands. For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au

 

Updated 10 November 2009