Geographical dimension of Dutch goods trade

Author: Pascal Ramaekers

What are the main countries of origin and destination in Dutch goods trade? How well-represented is the Netherlands in the external goods trade of the United States, China, Russia and the rest of the world? How important is the European Union to the Netherlands’ trading success and how large is the Netherlands’ contribution to intra-EU trade? In this chapter, we answer these and many other questions by analysing the geographical dimension of Dutch imports and exports.

5.1Key findings

As we described in chapter 2, trade in goods is of great importance for the Dutch economy. In 2017, the Netherlands earned 151 billion euros in goods trade, for example. This included 119 billion euros in Dutch-manufactured exports, while the remainder was generated by re-exports. Altogether, the export of goods accounts for 21 percent of GDP. Chapter 4 of this publication describes the composition of Dutch goods trade by type of goods and by supplying and receiving industry, top sector and region. In this chapter, we present the geographical dimension: what are the main countries of origin and destination in Dutch goods trade? Not only Germany, the United Kingdom and the United States are mentioned here, but various much lesser known trading partners will also be covered. Previous editions of the Internationalisation Monitor (CBS, 2016; CBS, 2017; CBS, 2019a) already described bilateral trade with Germany, the United Kingdom and the United States, respectively, in more detail.

A key conclusion of this chapter is that the European Union (including the UK) is a vitally important market for Dutch goods exports, with a share of almost 71 percent in 2018. However, this share has declined since 2010, when it exceeded 74 percent. Among the top ten export destinations, China and the US are the only countries outside the EU. Dutch goods imports are less focused on the EU, although here as well, the EU holds the largest share (53 percent of the total). The EU’s share was equally large in 2010. Russia and Norway are included in the top ten of major goods suppliers, aside from the US and China.

Approaching the figures from an international rather than from a Dutch perspective, the landscape takes on quite a different look. The Netherlands does not play a very large role as a goods supplier to the ten largest non-EU economies, including the US, China, Japan, India, Canada and Brazil. However, the Netherlands is a major supplier to countries such as Belgium, Nigeria, Sweden and Germany. For the ten largest non-EU economies, the Netherlands plays a more significant role as a recipient country rather than a supplier. This is particularly the case for Brazil, where the Netherlands is the fourth largest export destination. For example, the Netherlands receives large loads of Brazilian soya beans. The Netherlands is relatively even more important as a recipient country for Iceland, Belgium, Ivory Coast and Norway. Considering total trade in goods (starting from 2 billion euros in trade value), the Netherlands is most important for Belgium, Nigeria, the United Kingdom, Sweden, Norway, Germany and Russia.

5.2Dutch goods exports

The EU (including the UK) is still by far the largest export destination for the Netherlands in comparison with the continents outside Europe and with the rest of Europe, see Figure 5.2.1. Nearly 71 percent of Dutch goods exports go to another country within the EU. These intra-Community exports have shown the highest absolute growth (+74 billion euros) relative to 2010. However, in percentage terms, the growth rate is lower (+27 percent) than in exports to the Americas (+50 percent), Asia (+67 percent), Africa (+42 percent) and Oceania (+130 percent). The EU’s share in Dutch exports declined as a result from over 74 percent in 2010 to slightly under 71 percent in 2018.

The ten largest export destinations in 2018 accounted for two-thirds (334 billion euros) of the aggregate Dutch export value (496 billion euros), see Figure 5.2.2. These ten markets still constituted a combined share of 70 percent in 2010. They include eight EU countries (Germany, Belgium, the UK, France, Italy, Spain, Poland and Sweden) and two non-EU countries (the US and China). Among these ten countries, the highest percentage growth relative to 2010 is seen in trade with China (+90 percent) and Poland (+76 percent) while the lowest growth is in exports to Italy (+9 percent). Looking at the 50 largest export destinations for the Netherlands in 2018, what stands out is the growth in exports to 47 of these countries, relative to 2010. The only declining export markets were Russia (–4 percent), Greece (–10 percent) and Luxembourg (–11 percent). In terms of their respective percentage share in Dutch exports, several more countries have lost ground including Germany (–1.5 percentage points) and Belgium (–1 percentage point). China and Poland have increased their share the most, both by 0.6 percentage point.

Goods are exported by both independent small and medium-sized enterprises (SMEs) and large enterprises. The latter account for nearly three-quarters of such exports, the remainder of approximately one-quarter is on account of the independent SMEs. Traditionally, the percentage share of independent SMEs is larger in exports to countries closeby and smaller in trade with more distant countries. In exports to Germany, for instance, the independent SMEs take up 30 percent of the value. The share is even 32 percent in exports to Belgium. Independent SMEs are much less frequently the ultimate exporter to important but faraway destinations like the US (15 percent) and China (19 percent).

Nearly 23 percent of Dutch goods exports have Germany as the final destination, followed at a distance by Belgium with more than 10 percent, see Figure 5.2.3. The gap becomes slightly smaller if re-exports are not considered. In that case, Germany’s share drops to just over 19 percent, while Belgium’s share remains more or less the same. This is due to the fact that as much as 27 percent of total re-exports has a German destination. The UK and France also receive a relatively high volume of Dutch re-exports, while the US and China are only small re-export destinations for the Netherlands. Considering domestic exports only (i.e. not including re-exports), the country ranking is only slightly different from that of total goods exports. A higher ranking goes only to China (from 9^th to 7^th position) at the expense of Spain (from 7^th to 8^th) and Poland (8^th to 9^th).

Independent SMEs have a higher share in domestic exports (30 percent) compared to the share in total goods exports (26 percent); in re-exports their share is merely 19 percent. In both cases, they export relatively more to nearby countries than to destinations far away.

5.3Dutch goods imports

In Dutch goods imports as well, the EU is the most important trading partner with a value of 236 billion euros and a share of 53 percent in the total (of 442 billion euros), see Figure 5.3.1. Intra-Community acquisition (imports from other EU countries) rose by 59 billion euros or 34 percent as of 2010. In percentage terms, the growth rate was only higher in trade with the other European countries (+43 percent) and with Oceania (+134 percent, but representing imports at a minimal level). Imports from Asian origin countries grew at a similar pace (+33 procent). In 2018, the EU held a share equal to 2010. Traditionally, this share is much lower in Dutch imports than in exports. This has to do with large re-export flows from Asia and the Americas, arriving in the Netherlands but destined for other EU countries.

In 2018, the ten largest foreign goods suppliers were responsible for 65 percent of total Dutch imports, see Figure 5.3.2. This share was the same in 2017 and just slightly higher in 2010 (66 percent). Out of these ten top suppliers, six are countries within the EU (Germany, Belgium, United Kingdom, France, Italy, Spain) and four are non-EU (China, the US, Russia and Norway). In comparison with 2010, the list includes Spain as the only newcomer, replacing Japan. The top ten export destinations includes fewer non-EU countries (only China and the US). Russia and Norway are mainly high volume suppliers of crude oil and natural gas. The strongest absolute growth in imports as of 2010 has come from Germany (+19 billion euros or +32 percent) whereas the highest growth percentage-wise came from Italy (+51 percent), Norway (+67 percent), the US (+35 percent) and Belgium (+38 percent).

Just out of the top ten of origin countries, there has been a rapid increase in imports from Poland (+90 percent since 2010) as well as Ireland (+70 percent), Hong Kong (+186 percent) and Vietnam (+454 percent). Only five out of the 50 main countries of origin showed a decline in 2018 relative to 2010, namely: Japan (–15 percent), Brazil (–16 percent), Saudi Arabia (–8 percent), Kuwait (–22 percent) and Argentina (–18 percent).

The role of independent small and medium-sized enterprises (SMEs) is smaller in goods imports (with a 20‑percent share) than in goods exports (26 percent). Furthermore, geographical distance appears to be less of a constraint to the SMEs where imports are concerned as compared to exports. For example, in 2018 no less than 39 percent of goods imports from China in 2018 were by SMEs. They occupied a relatively minor share in imports from other distant countries, however, such as from the US (13 percent) or Russia (6 percent). As for imports from neighbouring countries, SMEs contribute roughly the same share as in total goods imports, namely an average of 20 percent.

Previously, we broke down goods exports into re-exports and Dutch-manufactured exports. Likewise, we are now able to break down goods imports into imports for the domestic market (whether for consumption, intermediate consumption or as capital goods) and imports for re-exports.noot1 However, these data are not as recent and for now these are only available up to 2017 inclusive. For the year 2017, we have compared the various import flows from the ten main countries of origin, see Figure 5.3.3. The traditional re-export flows (from non-EU origin countries to EU destinations via the Netherlands) become visible as a result. What we see is that a major share of imports from the US and China is destined for countries elsewhere in the EU (i.e. imports for re-exports), whereas a relatively large share of imports from neighbouring countries is in fact destined for the domestic market. The exceptions to the rule are Russia and Norway, with a relatively large share of imports from these two non-EU countries intended for the domestic market. These are mainly extensive flows of crude oil and natural gas, which are either refined or consumed in the Netherlands.

5.4Importance of the Netherlands as a supplier to other countries

So far, the status quo has been looked at from a Dutch perspective. How important are other countries in Dutch goods trade? In the paragraphs below, the roles are reversed and we look at it from the perspective of the rest of the world: how important is the Netherlands to other countries as trading partner? For this, we have made use of the United Nations Comtrade Database (UN, 2019). This paragraph starts from the perspective of goods imports by other countries, and the Netherlands’ share in those imports.

The top ten largest economies in the world in terms of nominal GDP are taken as a starting point. It is not surprising that EU countries – at a lesser distance – import relatively far more from the Netherlands than more distant countries outside the EU, but the differences are striking. Above-average quantities are imported from the Netherlands by Germany and the United Kingdom (8 percent), but also by Italy (nearly 6 percent) and France (nearly 5 percent). This is much lower in the US (0.8 percent), China (0.6 percent), Japan (0.4 percent), India (0.5 percent), Brazil (1.3 percent) and Canada (0.7 percent), where imports from the Netherlands fall far below the world average of 2.7 percent.

Aside from looking at the importance of the Netherlands, we may also consider its trading position. The Netherlands is the second largest supplier to Germany and the fourth largest supplier to the United Kingdom and Italy. On the other hand, it is scarcely significant to China (31^st), Japan (34^th) and India (36^th).

Not much has changed, for that matter, in the position of the Netherlands since 2010. Although it has gained some significance as a supplier to the UK, it has become slightly less important to Germany, see Figure 5.4.1. In absolute terms, imports from the Netherlands have grown since 2010 in all ten countries (as noted in paragraph 5.2). A declining Dutch share means that imports from other countries have increased more rapidly. For example, Germany’s imports from China have risen more steeply than its imports from the Netherlands.

So far, we have only looked at the world’s ten largest economies. When we consider all countries with an import flow exceeding 1 billion euros in 2017, Belgium emerges as the country most dependent on the Netherlands’ supply. Over 17 percent of Belgian imports are from the Netherlands, see Figure 5.4.2. Belgium is followed by Nigeria, Sweden, Germany, the UK, Denmark, Italy, Portugal, Greece and Hungary.

Looking at the entire world, we see that the Netherlands is also an important goods supplier to countries such as Surinam, Guinea, Aruba and Mozambique. The Nether­lands is the second most important goods supplier to Aruba and Surinam after the United States, for instance; to Guinea, it is even the number one supplier and to Mozambique, the fourth largest supplier.

The current Dutch trade agenda pays special attention to 40 different countries; further details are given in the text box below.

5.5Importance of the Netherlands as a market for other countries

For the largest economies outside the EU, the Netherlands is of much greater significance in the capacity of customer rather than as a supplier, see Figure 5.5.1. Only in the case of Canada is there hardly any difference between imports from and exports to the Netherlands. Shares in the exports of the US (2.7 percent), China (3.0 percent), Japan and India (1.8 percent) as well as Brazil (4.2 percent) are however significantly larger compared to these countries’ imports. With the Port of Rotterdam, the Netherlands acts as a major ‘gateway to Europe’ for these countries, resulting in a substantial difference with Dutch exports. Nevertheless, Brazil as a major supplier of soya beans is the only country on the list that exports more than the world average of 3.3 percent going to the Netherlands. Other countries above this average include EU countries such as Germany, the UK, France and Italy; all of them are more dependent on Dutch imports than average.

In terms of position rather than share, the Netherlands is most important to Brazil and the UK (ranking 4^th in both cases) and Germany (ranking 5^th). It is much less important to Japan (13^th) and India (14^th).

Since 2010, the Netherlands has lost some of its relevance as export market for all the major world economies, albeit with minimal differences. The only significant drop in the Netherlands’ position as export destination has been recorded in the UK, India and Brazil.

Taking into account export flows of at least 1 billion euros in 2017, we see that the country depending the most on the Netherlands as a customer is Iceland: over one-quarter of Icelandic exports are destined for the Netherlands, see figure 5.5.2. This mainly concerns aluminium, which is produced in Iceland from local geothermal sources. The next two most dependent countries are Belgium and Ivory Coast. Exports from the latter consist mainly of cacao beans, which are processed in the Netherlands into cocoa powder, cocoa butter or chocolate, see also CBS (2019c). The large cacao flows have made the Netherlands Ivory Coast’s biggest customer.

Taking into consideration all countries in the world, the Netherlands is a top export market for countries such as São Tomé and Príncipe, Sierra Leone, Jamaica, Mozambique and Cameroon. This concerns relatively low-value trade, however.

5.6Importance of the Netherlands as a trading partner

By aggregating flows of imports to and exports from the Netherlands, we can say something about the importance of the Netherlands as a trading partner to the rest of the world. Taking the world’s ten largest economies as a basis, we can now see that the Netherlands is by far the largest trading partner for Germany and the UK, see figure 5.6.1. The Netherlands ranks fourth in both cases with a share of 7 percent in total bilateral goods trade. The two countries are followed by France (where the Netherlands is in 8^th position with a share of 4 percent), Italy (7^th with 4 percent) and Brazil (5^th with 3 percent). It is worth noting that despite only 3 percent, the Netherlands’ ranking is particularly high in Brazil. The reason for this is that the American continent has relatively few large economies as trading partners in comparison with other continents. The Netherlands is less important as a trading partner to the US (12^th position), China (16^th), Japan (21^st), India (28^th) and Canada (11^th).

Out of all countries with a bilateral trade value of more than 2 billion euros, the country which attaches relatively the greatest importance to the Netherlands is Belgium. Approximately one-seventh of its total goods trade is conducted with the Netherlands. The Netherlands also holds a very important trading position in Nigeria, which is a major supplier of crude oil as well as a large market for Dutch petroleum products. The Netherlands’ top 10 of trading partners in terms of relative importance further includes the UK, Sweden, Norway, Germany and Russia (in 3^rd to 7^th position). The Netherlands is the 2^nd largest trading partner for Belgium and Russia, 3^rd largest for Nigeria and Norway, 4^th largest for Germany and the UK, and 6^th largest for Sweden.

 

Looking at the entire world, the Netherlands is the most important trading partner for Belgium (14.5 percent) followed by Iceland (14.4 percent), Aruba (11.4 percent), Mozambique (9.2 percent), Nigeria (8.8 percent), Ivory Coast (8.1 percent), Guinea (7.9 percent), the UK (7.3 percent) and Sweden and Norway (both 7.2 percent). The Netherlands’ position in Germany is only 11^th with a share in German goods trade of 7.0 percent. Worldwide, the Netherlands accounts for 3.0 percent of all goods trade as of 2017.

5.7References

Open references