Eight Barriers to Trade

The Netherlands must earn more by doing business abroad. Trade is encountering serious obstacles in this respect. President Hans de Boer, of the employers' organization VNO-NCW, mentioned this during the general members' meeting of the Dutch Potato Organization on Wednesday 10 May. (NO) 8.

The Netherlands earns its living and especially its investments abroad. The agricultural sector plays a large part in this. '60 percent of the worldwide seed potato trade is in the hands of the Netherlands,' says De Boer, who harvested seed in Friesland during his student years.

Of the total Dutch revenue model, approximately 32 percent of the added value is earned directly abroad. 'That has to go to 40 percent', says the chairman of entrepreneurship club† 'Because Germany and Belgium are now following very quickly. Still, there are a few hurdles lurking.'

1. Power Bloc European Union
'The world is increasingly segmented into blocks. As a country, we cannot cope with some blocks alone. The Netherlands cannot make a dent in a packet of butter yet, the European Union, on the other hand, is not bothered by that. Also, don't forget that the EU is by far the most important export market for us. Those who would rather have the Netherlands out of the European Union are people with suicidal characteristics. You shouldn't take them seriously, but they are life-threatening.'

2. Trump's politics extremely threatening
'The Netherlands' foreign trade is going well, there are enormous opportunities, but we are threatened by foreign countries. We have to deal with President Donald Trump. He's right about a few things, but his "America first policy" is extremely threatening. He wants to reduce the corporate tax rate from 35 to 15 percent. Financially, this has to be paid for by high import tariffs and a zero tariff for what goes out. This means that you should not let AkzoNobel be taken over by an American company. They are taking up production capacity behind the walls of the United States and that will cost us jobs.'

Another example that worries De Boer is the presidential order that Trump recently issued. 'He wants to know from every organization how they can replace the production they get from abroad with domestic production. That affects the trade. If you want to influence this, you must do so through the European Union. As a block you are much more interesting, TTIP is also something like that. At one point, we were the only party to openly argue that we should have a free market with the US. It's a shame we let this opportunity slip, because now the US is doing it itself.'

3. Trade with Asia
Asia is a great market, but we also know the downside. That is the steel dump from China on the European market. Far below cost and also filthy produced, a danger to Tata Steel that employs almost 10.000 people (including the spin-offs, you're talking about almost 20.000 employees). Brussels is sometimes accused of being too bureaucratic, but we need them to cope with this. The EU as a power bloc to ensure our place in the world.'

4. Restoring relationship with Russia takes time
“Russia is important for trade, but the relationship is difficult. Agriculture knows this better than anyone else. I am willing to accept the invitation from the Russians to talk about trade, but then I would like support from the Dutch government. Because of the disaster with the MH17 I don't get it. The disaster plays through that and politics is not yet ready to open the Russian market quickly. Nevertheless, politics has the lead to ensure that we as the Netherlands are not the last to get a toe in the door.'

5.Brexit: loss and opportunity
'The English are our second trading partner. Britain's exit from the EU will therefore cost us a lot of money. The upside, however, is that the Netherlands is now above England as a business location. There are about 100 extra serious companies that are considering establishing themselves in the Netherlands. A great opportunity that we are also working hard on.'

6. Aftercare of trade missions must be improved
De Boer is full of praise for the amount of trade missions that are being organized and the participants, many of whom are agricultural, are turning orange in one fell swoop, but he also sees areas for improvement. 'The agreements for companies are made manually, while I think that this could be done better on the basis of data. With matching via the internet, a company can come into contact with a foreign partner in a much more targeted way. Another point that does not go well is the aftercare. Certainly when it comes to projects that require a consortium of companies, such as the Panama locks around which hundreds of hectares had to be developed. Professionalization is required in the follow-up after the mission. The money is now there, now the implementation is yet to come.'

7. Stable Domestic Climate
'We are happy with the election results: stability has been chosen. It could have gone very differently. In that case, there would have been a man on the box with whom you have to go on a trade mission that you would rather not have on it. I am positive about the cabinet negotiations. I think the chance of them coming out now is well above 50 percent. I foresee a middle cabinet. The only thing I am against are the ideas of GroenLinks about all green measures. A meat tax, a packaging tax and higher tax on driving and air travel. In fact, the cabinet must lay the foundation for a system in which entrepreneurship can flourish and residents are proud of their country and can earn a good living there.'

8. More money to economy
VNO-NCW drew up the NL Next level program in collaboration with the support of various sectors. 'In it we argue in favor of a little more money going from the national budget to the hard corner. Invest 5 billion in infrastructure, R&D, security and energy transition and reduce the burden for citizens and businesses with 5 billion each. That can be done without strange budget cuts. In this way the economy can grow further and jobs are created.'

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