Question

Determine the international economic/trade exposure of the Netherlands. To what extent is the Dutch economy exposed to international economic activities? Reasons for that?

Answer 1

Overview of Netherlands:

According to the World Bank and International Monetary Fund (IMF) Netherlands is the 17^th largest economy in the world in 2019. During the fiscal year 2017-18 its GDP was approximately $48,860. This way Netherlands is one of the highest earning nations in the world.

Trade exposure of the Netherlands:

• The major exports of the Netherlands are mainly contributed with petroleum oils other than crude, processed foodstuff like plants, flowers, dairy products, meat, fruit and vegetables, automatic data-processing machines, medicaments and line telephony electrical apparatus. 50% of the sales are due to reexports of the country.
• The major imports of the country are mainly contributed by Crude Petroleum ($36.4B), Refined Petroleum ($33.1B), Broadcasting Equipment ($17.8B), Office Machine Parts ($15.9B) and Computers ($11B).
• The country's main trade associates are Germany (21.9%), Belgium (10.3%), the United Kingdom (8.6%) and France (8%), while imports come chiefly from Germany (18.5%), Belgium (10.7%), China (9%) and the US (7.7%).
• According to the World Bank record, in 2017, Netherlands enjoys a physically encouraging trade balance for goods and services, which stood at USD 95.8 billion, the country’s exports of goods were worth USD 652 and imports were USD 574.3 billion. This shows a good sign of economic prosperity of international trade.

Major reasons for the exposure of international trade:

• During last few years the economy has improved in the area of price competitiveness. The costs of labor is reduced considerably and successful in maintaining the same.
• The country enjoys a geographical situation advantage and have competent infrastructure as many transitions are made via Netherlands. The re-export of these products are the only reason for the improvement in the balance sheet.
• The Netherlands has exclusive features, with an openness that makes it highly weak to trade tremors, but instantaneously permits it to rapidly adjust its trade relations.