The Washington Diplomat / June 2013
By Larry Luxner
Nearly 680,000 Americans — more than the entire population of the District of Columbia — owe their jobs to bilateral trade and investment between the Netherlands and the United States.
That’s the conclusion of a study released March 20 by the Royal Dutch Embassy. The report, “Economic Ties Between the USA and the Netherlands: A Partnership That Works,” says that despite economic difficulties in both the United States and the 27-member European Union, Dutch investment in the U.S. economy continues to rise.
“As the global economy continues on the road to financial recovery, our Economic Ties report proves that durable, bilateral ties consistently yield results for both nations,” said Stephan Raes, the embassy’s economic minister. “Imagine how much stronger these ties can be when the U.S. and EU establish a Transatlantic Trade and Investment Partnership.”
Negotiations recently began on the TTIP, which the Netherlands enthusiastically supports. If approved, it would replace the North American Free Trade Agreement (NAFTA) as the world’s largest such accord, because the U.S.-EU trade relationship accounts for a third of total goods and services trade, and nearly half of all global economic output.
TTIP talks are expected to focus on three broad areas: market access; regulatory issues and non-tariff barriers; and modes of cooperation such as intellectual property rights, labor laws and protection of the environment.
“This agreement will be crucial to the continued growth of both our economies," said Dutch Ambassador Rudolf Simon Bekink. “The numbers in our Economic Ties report can be the seeds to the bountiful trade opportunities that will open up. In nearly every critical trade indicator, such as goods and services imported and exported to each country, Dutch-U.S. economic ties saw increases.”
Among other things, the newly released report found that:
• The Netherlands retained its place as the third largest foreign investor in the United States, pouring $240 billion into U.S. companies in 2011.
• U.S. companies increased their investment in the Netherlands to $595 billion, making it the top destination worldwide for U.S. foreign direct investment.
• The trade exchange of goods between the two countries increased by 26 percent in 2011 to $81 billion.
According to the report, about 343,300 U.S. jobs exist thanks to Dutch investment in the United States, while another 336,500 jobs depend on U.S. exports to the Netherlands. Those numbers are for 2011, which saw a 9 percent increase (or about 55,000 jobs) from the previous year.
Raes supervises a team of 50 people around the country, both at the embassy in Washington and at Dutch missions in Atlanta, Boston, Chicago, Houston, Miami, New York and San Francisco.
“There’s no country in the world where the United States invests more than the Netherlands,” he said, noting that Great Britain runs a close second, at $550 billion. “Before I came here, I didn’t know that,” said Raes, who prior to assuming this job in 2008 — just as the recession began ravaging both sides of the Atlantic — was director of international technology cooperation at the Dutch Commerce Department.
“Historically speaking, Europe is by far more important than emerging markets or even Canada and Mexico. There’s a lot of reasons for that,” he told The Washington Diplomat. “We have a good investment climate in the Netherlands, we’ve got a population that speaks English, an attractive corporate tax rate, and also Schiphol Airport and the port of Rotterdam, which is the gateway to Europe.”
More than 850 Dutch companies operate in the United States, including well-known brands like Heineken, Philips Global, Shell Oil and Unilever. Locally, international retailing group Ahold is the parent firm of Giant Food Stores, one of the Washington area’s largest supermarkets.
The top five states in terms of job creation due to U.S.-Netherlands economic ties are Texas (98,271 jobs), California (63,278), Pennsylvania (45,912), New York, (42,881) and Massachusetts (39,743).
In Maryland, home to 54,388 residents of Dutch descent, 21,600 jobs are supported by the investments of Dutch companies, and another 4,661 jobs are supported by Maryland exports to the Netherlands (mainly chemicals and transport equipment). Dutch foreign direct investment in Maryland came to $2.3 billion in 2011.
In Virginia, home to 84,465 inhabitants of Dutch origin, 15,939 jobs exist thanks to investments of Dutch companies, and another 4,839 jobs are supported by Virginia exports to that country. In 2011, Dutch FDI in Virginia totaled $2.1 billion.
In 2011, the United States exported $46 billion in merchandise and $1.5 billion worth of services to the Netherlands, according to the report. Major U.S. companies operating in Holland include Abbott Laboratories, Archer Daniels Midland, Cargill, Carnival Corp., Caterpillar, Coca-Cola, General Electric, Heinz, IBM, Nike, Starbucks, UPS and Xerox.
“The U.S. was the sixth largest export partner for Holland in 2010, and in 2012 became fifth, while export growth to the Netherlands since 2009 has averaged 10 percent a year,” said Raes. “If you read the newspapers, you’d think the end of Europe was in sight. But there’s actually quite a lot going on. We’ve got an unemployment level of just over 5 percent. The president of the United States would like such results.”