Netherlands struggles to safeguard interests in Brexit negotiations
Just days before British Prime Minister Theresa May activates the process of the Brexit, Dutch experts warned the Netherlands is going to face a difficult balancing act of negotiating within a united European Union ( EU) front, while confronting thorny issues to safeguard its own interests.
“The Netherlands and Britain have shared many common interests as EU members, but the situation during the Brexit negotiations will be fundamentally different from business as usual with the UK being the departing state on the one side and Netherlands being part of the EU27 on the other,” said Joris Larik, senior researcher at The Hague Institute for Global Justice.
The expert on EU law and foreign policy suggested the Netherlands should focus its strategy on being part of a united EU front in the upcoming negotiations and refrain from entertaining any British proposals, which could incite internal divisions among the EU27 even if short term gains for the Dutch economy and citizens are being promised.
The Netherlands’ Advisory Council on International Affairs ( AIV) stressed in a Brexit report published last week that the EU member states should represent a united front in the negotiations for British withdrawal from the EU.
In particular it called on the Dutch government not to be receptive to any British proposals which clearly intend to turn EU member states against each other.
For the Netherlands, being the third largest exporter to Britain at 6.3 percent of GDP and fourth largest importer ( 3.7 percent of GDP) among EU states, consequences will be more significant.
The size of the UK’s exit bill set around 60 billion euros ($ 65.2 billion) covering liabilities such as pensions for EU officials, infrastructure projects, and the bail- out of Ireland, will be among the first topics for discussion.
The Netherlands, being a net contributor, would be under pressure due to Brexit and the country may suffer heavy losses if the exit bill cannot be worked out with the UK, Larik warned.
The Netherlands’ annual contribution to the EU budget is slightly below 6 billion euros ( 4.9 percent of GDP) and is ranked sixth. Britain, with a contribution of 15.4 percent of GDP, is the third largest contributor.
According to Larik, there are little chances to prevent an increase of the Dutch net contribution to the EU budget post- Brexit in particular given the stated ambitions of the EU to cooperate more closely in defense, security, financial and other matters.
“That will create additional costs, not fewer, in the near term. However, the biggest catastrophe for the Netherlands would be a weakening or even disintegration of the EU rather than a deal leading to higher costs,” he commented.
The Dutch Bureau for Economic Policy Analysis ( CPB) has estimated that Brexit would cost the Dutch economy 10 billion euros ($ 10.9 billion) annually by 2030, but a new BritishEU agreement cutting trade tariffs in half would reduce this figure by 20 percent.
As for the future relationship, the Dutch advisory body AIV suggested that the EU could engage in a comprehensive free trade agreement with Britain, modeled after the recent trade agreement with Canada, CETA, and going beyond that where possible through additional provisions.
The Netherlands, being a net contributor, would be under pressure due to Brexit and the country may suffer heavy losses if the exit bill cannot be worked out with the UK.