AMESTERDAM: Trading relations between the European Union and the United States are under pressure in a way not felt for many years.
For decades, the U.S. has been the largest source of foreign direct investment into Europe, based on a strong partnership of common values on rules, taxation and fair financial rewards shared across national capitals.
However, that status quo now appears less stable. Not only as a result of increased tensions in trade relations, but perhaps even more importantly, in the arena of foreign direct investment. What is even more surprising is that this instability is originating from one of the most traditionally open and liberal European economies for U.S. business: the Netherlands.
Of all EU countries, the Netherlands has been the top recipient of U.S. investment – 17 percent of all U.S. foreign direct investment as of 2015 – something investors attribute to a solid and steady business climate, excellent transport links, respect for the rule of law, and favorable taxation.
Last week, however, Wouter Paardekoper, the president of the American Chamber of Commerce in the Netherlands, expressed his concerns about Dutch government plans to introduce onerous tax rules exceeding those proposed by the EU. These new rules would represent an unprecedented break with decades of pro-trade, fiscal policies that have attracted billions in foreign investment as well many companies to the country. Other signs of erosion to Dutch attractiveness to foreign investors continue to emerge, particularly through a radical shift in energy policy.
