Flag of the Netherlands

Netherlands country brief

Introduction

The Netherlands is a parliamentary democracy with a constitutional monarchy. King Willem-Alexander is the head of state, having been invested as monarch upon the abdication of his mother, Queen Beatrix, on 30 April 2013. Long renowned for its internationalist outlook, the Netherlands was a founding member of the European Union (EU), the UN, NATO and OECD. With Belgium and Luxembourg, it is also a member of the Benelux Economic Union. While the capital city of the Netherlands is Amsterdam, the Dutch Government and Parliament are located in The Hague.

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 and the EU’s judicial cooperation agency, Eurojust. It is also host to the Organisation for the Prohibition of Chemical Weapons (OPCW).

Political overview

In the Netherlands, the political powers of the monarch are largely ceremonial. Until recently, the monarch played an influential role by selecting the informateur who began the process of identifying possible parliamentary coalitions which could lead to the formation of a new Council of Ministers, or Cabinet. This prerogative was transferred, for the first time, to Parliament following elections in 2012. 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 of Parliament (equivalent to the House of Representatives in Australia). The Council of Ministers usually comprises thirteen to sixteen ministers and a number of state secretaries, who traditionally support ministers.

There are three levels of government in The Netherlands: 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 Senate, of Parliament, consists of 75 members indirectly elected by members of the 12 Provincial Councils. The Second Chamber of Parliament has 150 members elected by universal adult suffrage. The Second Chamber 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

A broad centrist coalition comprising the liberal (VVD) and the Labour Party (PvdA) was sworn into office on 5 November 2012, following elections in September of that year. Mark Rutte, leader of the VVD, is the Prime Minister of the Netherlands. Mr Rutte also served as Prime Minister under the previous VVD/Christian Democrat minority coalition government which governed the Netherlands from October 2010 until April 2012. Lodewijk Asscher (PvdA), former Deputy Mayor of Amsterdam, was appointed Deputy Prime Minister and Minister of Social Affairs and Employment. Frans Timmermans (PvdA), a former State Secretary for European Affairs (2007-2010) and diplomat, is Foreign Minister. Under the current Government Lilianne Ploumen (PvdA) will serve as Minister for Foreign Trade and Development Cooperation, reflecting the strong correlation which the Netherlands sees between international trade and development.

Foreign policy overview

Key objectives of the Netherlands' foreign policy are promoting and defending Dutch prosperity and national security. The Netherlands, which is highly dependent on foreign trade, has a direct interest in and seeks to promote a stable international legal order. It has a long history of promoting human rights worldwide as an essential part of foreign policy. Other foreign policy priorities include addressing global poverty and inequality, climate change and other environmental threats, energy security, international terrorism, proliferation of weapons of mass destruction and human trafficking.

Strengthening regional and global institutions, including the UN, has long been a focus of Dutch foreign policy. The Netherlands has historically been a strong supporter of European integration. It works with European partners to promote prosperity and security, including through fighting crime and deterring illegal migration. In addition to its traditional focus on multilateral and regional institutions, the Netherlands has sought to forge strong partnerships with countries that share its values, including Australia.

The Netherlands is a significant aid donor, committing approximately 0.75 per cent of GDP to Overseas Development Assistance in 2011. The majority of this is contributed through multilateral organisations, including the UN, Human Rights Fund and Stability Fund. In 2011 the Netherlands revised its development policy to focus on four key themes: water management, food security, international security and the rule of law and sexual and reproductive health and rights, consistent with the Millennium Development Goals. The current Dutch government reaffirmed its commitment to these core themes in October 2012. The Netherlands will target aid to 15 partner countries in the Middle East and Africa as well as Bangladesh and Indonesia. The Netherlands has viewed development cooperation as a vehicle for economic growth with the ultimate aim of countries becoming self-reliant.

The Netherlands' unique geography means it is 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 address it. The Netherlands will contribute €200 million in 2013 to international climate funding for developing countries. The Netherlands is also a strong supporter of renewable energy. The European Commission has set the target for the Netherlands of producing 14 per cent of its energy in a sustainable way by 2020. 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.

Economic overview

The Netherlands is a small, wealthy trading nation. With a population of 16.8 million it accounts for 0.24 per cent of world population, 0.9 per cent of world GDP and 3.6 per cent of the world’s exported goods. The Netherlands has the 18th largest economy and a sizeable financial sector. It is the world's eighth largest exporter of goods (US$538.5 billion in 2012). Agriculture accounts for 2.8 per cent of GDP, industry 24 per cent and services 73.2 per cent. The Netherlands has a comparative advantage in agro-food processing, as well as in chemicals, petroleum refining, and electrical machinery.

The Netherlands was hit hard by the global financial crisis in 2009 and its recovery since has been hampered by weakness in other European economies. In 2012, GDP growth was estimated at -1.0 per cent. The Netherlands 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 Netherlands sought stronger supervision of the international banking and finance industries, including strengthening of the IMF and other global financial institutions. It also urged the freeing of world trade to stimulate the global economy.

Trade and investment

Trade is an important aspect of the Dutch economy. Most of the Netherlands' trade is with EU countries, especially Germany and Belgium. The US is the Netherlands' largest export destination outside Europe. China is rapidly growing in importance as a supplier. Dutch imports comprise mainly machinery and transport equipment, chemical products, fossil fuels and agricultural products.

The Netherlands is an attractive destination for foreign investment, 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 significant levels of private assets under management. In addition, the Dutch venture-capital market is among the best developed in Europe.

Bilateral relationship

Australia has long-standing, friendly and productive relations with the Netherlands. We share fundamental values and a similar global outlook.

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 and enjoy close cooperation on a wide range of global and multilateral issues.

The Netherlands is an important member of the EU and a valuable interlocutor on EU issues. 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 from the Australian Taxation Office.

People-to-people links

During the 1950s, Australia was the destination of 30 per cent of Dutch emigrants and the Netherlands-born became numerically the second largest non-British group in Australia. Today over 300,000 Australians claim Dutch descent. The 2011 census recorded more than 76,000 residents of Australia born in the Netherlands. According to the Dutch Central Bureau for Statistics, approximately 15,000 first or second generation Australians live in the Netherlands.

High level visits

ANCODS Collection

In February 2011 the Dutch Government repatriated to Australia over one thousand artifacts that were recovered from Dutch East India Company ships that sank off the Western Australian coast in the 17th and 18th centuries. The artifacts were returned under the Agreement between Australia and the Netherlands Concerning Old Dutch Shipwrecks (ANCODS). A Mutual Declaration was signed on 15 September 2010 which acknowledged that Australia would hold the ANCODS Collection but that the Netherlands could borrow it for exhibitions. The Collection is on display at the Western Australian Museum in Fremantle.

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, Fortis, Rabobank, AEGON, Shell, Unilever, Delta Lloyd, Philips, and Akzo Nobel. In 2012 the Netherlands was Australia’s fourth largest source of foreign direct investment (A$32.3 billion) after the US, UK and Japan. The Netherlands was the eighth largest destination for total Australian investment abroad (A$27.79 billion).

In 2012, the Netherlands was Australia's 19th largest merchandise trading partner with total exports and imports of A$4.85 billion. In the same period, the value of Australia's merchandise exports to the Netherlands was over A$2.9 billion. Significant Australian exports to the Netherlands in 2012 included coal, oil seeds, zinc ores and medicaments (including veterinary). Significant imports included medicaments (including veterinary), ships and boats, refined petroleum and pumps.

Australian services exports to the Netherlands in 2012 totaled A$480 million, mostly personal travel and financial services. Services imports totaled A$1.34 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.

Austrade maintains a representative office in Frankfurt that covers the Netherlands. 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 September 2013