December 13, 2010

For the most current version of this Note, see Background Notes A-Z.

PROFILE

Geography
Area: 41,526 sq. km. (16,485 sq. mi.); about half the size of South Carolina.
Cities: Capital--Amsterdam (pop. 767,457). Other cities--The Hague, seat of government (488,553); Rotterdam (593,049); Utrecht (307,081).
Terrain: Coastal lowland.
Climate: Northern maritime, with cool summers and mild winters.

People
Population: 16.6 million.
Nationality: Noun--Dutchmen and Dutchwomen. Adjective--Dutch.
Ethnic groups: Predominantly Dutch; large minority communities are Moroccans, Turks, Surinamese, and Dutch Caribbean.
Religions: Largest groups are Roman Catholic, Protestant, and Muslim.
Language: Dutch.
Education: Years compulsory--13. Attendance--nearly 100%. Literacy--99%.
Health: Infant mortality rate--3.8/1000. Life expectancy--79.55 years.
Civilian employment (second quarter 2010, 7.807 million): industry--11.2%; manufacturing--16.9%; services--80.1%; agriculture--2.9%.

Government
Type: Parliamentary democracy under a constitutional monarch.
Constitution: 1814 and 1848.
Branches: Executive--monarch (chief of state), prime minister (head of government), cabinet. Legislative--bicameral parliament (First and Second Chambers). Judicial--Supreme Court.
Subdivisions: 12 provinces.
Political parties: Christian Democratic Appeal (CDA), Labor Party (PvdA), Freedom Party (PVV), Socialist Party (SP), Liberal Party (VVD), other minor parties.
Suffrage: Universal at 18.

Economy*
GDP (2009): $715 billion.
GDP growth (2010 est.): 1.75%.
GDP per capita (2009): $35,500.
Natural resources: Natural gas, petroleum, fertile soil.
Agriculture (1.8% of GDP): Products--dairy, poultry, meat, livestock, flower bulbs, cut flowers, vegetables and fruits, sugar beets, potatoes, wheat, barley.
Industry (25.4% of GDP): Types--agro-industries, steel and aluminum, metal and engineering products, electric machinery and equipment, bulk chemicals, natural gas, petroleum products, construction, transport equipment, microelectronics, fishing.
Services (72.8% of GDP): Types--trade, hotels, restaurants, transport, storage and communication, financial (banking and insurance) and business services, care, and other.
Trade (2009): Exports--$387.8 billion f.o.b.: machinery and transport equipment, chemicals, mineral fuels, processed food and tobacco, agricultural products. Imports--$345.6 billion f.o.b.: mineral fuels and crude petroleum, machinery, transportation equipment, chemicals, mineral fuels and crude petroleum, consumer goods, foodstuffs. Major trading partners (exports/imports)--EU (74.5%/55.6%), Germany (24.1%/19.6%), Belgium (11%/10%), China (1.5%/7.9%), United Kingdom (8.4%/6.1%), and U.S. (4.5%/8.4%), France (8.9%/4.9%).

*Figures are based on a July 2010 exchange rate of 0.80 euro to the dollar.

HISTORY
The Dutch are primarily of Germanic stock with some Gallo-Celtic mixture. Their small homeland frequently has been threatened with destruction by the North Sea and has often been invaded by the great European powers.

Julius Caesar found the region which is now the Netherlands inhabited by Germanic tribes in the first century B.C. The western portion was inhabited by the Batavians and became part of a Roman province; the eastern portion was inhabited by the Frisians. Between the fourth and eighth centuries A.D., most of both portions were conquered by the Franks. The area later passed into the hands of the House of Burgundy and the Austrian Habsburgs. Falling under harsh Spanish rule in the 16th century, the Dutch revolted in 1558 under the leadership of Willem of Orange. By virtue of the Union of Utrecht in 1579, the seven northern Dutch provinces became the Republic of the United Netherlands.

During the 17th century, considered its "golden era," the Netherlands became a great sea and colonial power. Among other achievements, this period saw the emergence of some of painting's "Old Masters," including Rembrandt and Hals, whose works--along with those of later artists such as Mondriaan and Van Gogh--are today on display in museums throughout the Netherlands and the world.

The country's importance declined, however, with the gradual loss of Dutch technological superiority and after wars with Spain, France, and England in the 17th and 18th century. The Dutch United Provinces supported the Americans in the Revolutionary War. In 1795, French troops ousted Willem V of Orange, the Stadhouder under the Dutch Republic and head of the House of Orange.

Following Napoleon's defeat in 1815, the Netherlands and Belgium became the "Kingdom of the United Netherlands" under King Willem I, son of Willem V of Orange. The Belgians withdrew from the union in 1830 to form their own kingdom. King Willem II was largely responsible for the liberalizing revision of the constitution in 1848.

The Netherlands prospered during the long reign of Willem III (1849-90). At the time of his death, his daughter Wilhelmina was 10 years old. Her mother, Queen Emma, reigned as regent until 1898, when Wilhelmina reached the age of 18 and became the monarch.

The Netherlands proclaimed neutrality at the start of both world wars. Although it escaped occupation in World War I, German troops overran the country in May 1940. Queen Wilhelmina fled to London and established a government-in-exile. During the war, the Nazis rounded up the Jewish population before deporting them to camps in the East. Over 75% of the Netherlands' 140,000 Jews died at the hands of the Nazis. Shortly after the Netherlands was liberated in May 1945, the Queen returned. Crown Princess Juliana acceded to the throne in 1948 upon her mother's abdication. In April 1980, Queen Juliana abdicated in favor of her daughter, now Queen Beatrix. Crown Prince Willem-Alexander was born in 1967.

Elements of the Netherlands' once far-flung empire were granted either full independence or nearly complete autonomy after World War II. Indonesia formally gained its independence in 1949, and Suriname became independent in 1975. In the Caribbean, what was known as the Netherlands Antilles dissolved on October 10, 2010. The islands of Aruba and Curacao, and Sint Maarten (the Dutch two-fifths of the island of Saint Martin) enjoy a large degree of autonomy as constituent members of the Kingdom of the Netherlands. Meanwhile, the islands of Bonaire, Saba, and Sint Eustatius are considered to be special municipalities within the Netherlands.

GOVERNMENT AND POLITICAL CONDITIONS
The present constitution--which dates from 1848 and has been amended several times, most recently in 1983--protects individual and political freedoms, including freedom of religion. Although church and state are separate, a few historical ties remain; the royal family belongs to the Dutch Reformed Church (Protestant). Freedom of speech also is protected.

Government Structure
The country's government is based on the principles of ministerial responsibility and parliamentary government. The national government comprises three main institutions: the Monarch, the Council of Ministers, and the States General. There also are local governments.

The Monarch. The monarch is the titular head of state. The Queen's function is largely ceremonial, but she does have some influence deriving from the traditional veneration of the House of Orange, from which Dutch monarchs for more than 3 centuries have descended. Her influence also derives from her personal qualities as Queen and her power to appoint the "formateur," who forms the Council of Ministers following elections.

Council of Ministers. The Council of Ministers plans and implements government policy. The Monarch and the Council of Ministers together are called the Crown. Most ministers also head government ministries, although ministers-without-portfolio exist. The ministers, collectively and individually, are responsible to the States General (parliament). Unlike the British system, Dutch ministers cannot simultaneously be members of parliament.

The Council of State is a constitutionally established advisory body to the government that consists of members of the royal family and Crown-appointed members generally having political, commercial, diplomatic, or military experience. The Council of State must be consulted by the cabinet on proposed legislation before a law is submitted to the parliament. The Council of State also serves as a channel of appeal for citizens against executive branch decisions.

States General (parliament). The Dutch parliament consists of two houses, the First Chamber (“Senate”) and the Second Chamber (“House of Representatives.”). Historically, Dutch governments have been based on the support of a majority in both houses of parliament. The Second Chamber is by far the more important of the two houses. It alone has the right to initiate legislation and amend bills submitted by the Council of Ministers. It shares with the First Chamber the right to question ministers and state secretaries.

The Second Chamber consists of 150 members, elected directly for a 4-year term--unless the government falls prematurely--on the basis of a nationwide system of proportional representation. This system means that members represent the whole country--rather than individual districts as in the United States--and are normally elected on a party slate, not on a personal basis. There is no threshold for small-party representation. Campaigns are relatively short, lasting usually about a month, and the election budgets of each party tend to be less than $2 million. The electoral system makes a coalition government almost inevitable. The last election of the Second Chamber was in June 2010.

The First Chamber is composed of 75 members elected for 4-year terms by the 12 provincial legislatures. It cannot initiate or amend legislation, but its approval of bills passed by the Second Chamber is required before bills become law. The First Chamber generally meets only once a week, and its members usually have other full-time jobs. The current First Chamber was elected following provincial elections in May 2007.

Courts. The judiciary comprises 62 cantonal courts, 19 district courts, five courts of appeal, and a Supreme Court that has 24 justices. All judicial appointments are made by the Crown. Judges nominally are appointed for life but actually are retired at age 70.

Local Government. The first-level administrative divisions are the 12 provinces, each governed by a locally elected provincial council and a provincial executive appointed by members of the provincial council. The province is formally headed by a queen's commissioner appointed by the Crown.

Current Government. General elections (of the Second Chamber) were held in June 2010. On October 14, 2010, a new minority government of the Liberal Party (VVD) and Christian Democratic Appeal (CDA) was sworn in, headed by Prime Minister Mark Rutte (VVD). This government relies on parliamentary support from the Freedom Party (PVV). Given the consensus-based nature of Dutch politics, a change of government does not usually result in drastic changes in foreign or domestic policy. Descriptions of the four main parties follow.

The Liberal Party (VVD), which is considered “liberal” in the European rather than American sense, emerged from the June elections as the largest party with 31 seats, although with a slim margin. Considered the most conservative of the major parties, the Liberals attach great importance to private enterprise and the freedom of the individual in political, social, and economic affairs.

The second-place finisher in the June elections was the Labor Party (PvdA), with 30 seats. PvdA is a classic European social democratic party, which is left of center. Labor’s emphasis is economic equality for citizens, though the party has debated the role of the central government in that process. PvdA has no formal links to the country’s trade unions.

The far-right, populist Freedom Party (PVV) achieved more gains than any other party in June, becoming the third-largest with 24 seats. PVV, lead by Geert Wilders, primarily runs on an anti-Islam and anti-immigrant ticket, along with a nationalist agenda that voices little support for European integration, Dutch participation in crisis management operations, or development assistance. On socio-economic issues, however, PVV tends to be “conservatively” left-of-center.

The once-dominant Christian Democratic Appeal Party (CDA) slipped into fourth position, losing 20 of its previous 41 seats. CDA supports free enterprise and holds to the principle that government activity should supplement but not supplant communal action by citizens. On the political spectrum, the CDA sees its philosophy as standing between the "individualism" of the Liberals and the "statism" of the Labor Party.

Domestic Drug Policy
Despite the government’s long-term efforts to combat production of and trafficking in narcotic drugs, the Netherlands continues to be a significant transit point for drugs entering Europe (especially cocaine), and an important producer and exporter of synthetic drugs, particularly Ecstasy (MDMA), although MDMA production appears to have declined significantly in recent years. Dutch authorities received no reports of Ecstasy tablet seizures in the United States linked to the Netherlands in 2008, though this may be due to incomplete data. In July 2008, the Justice and Interior Ministers established a task force to combat the criminal organizations behind cannabis plantations. In September 2009, the Cabinet approved a letter outlining future Dutch drug policy. The gist of the letter was that the government wants to maintain its current policy of tolerating cannabis sales in “coffeeshops,” At the same time, it wants to reduce the number of “coffeeshops” and find a way to restrict sales to Dutch citizens. The “100% controls” at Schiphol airport in Amsterdam on inbound flights from the Caribbean and some South American and West African countries have resulted in a sharp decline in the number of drug couriers from those countries.

The Dutch Opium Act punishes possession, commercial distribution, production, import, and export of all illicit drugs. Drug use, however, is not an offense. The act distinguishes between "hard" drugs that have "unacceptable" risks (e.g., heroin, cocaine, Ecstasy) and "soft" drugs (cannabis products). One of the main aims of this policy is to separate the markets for soft and hard drugs so that soft drug users are less likely to come into contact with hard drugs. Sales of small quantities (under five grams) of cannabis products are tolerated in "coffeeshops" operating under strict conditions and controls. The United States continues to disagree with this aspect of Dutch drug policy. Trafficking in “hard” drugs is prosecuted vigorously. Overall, the Health Ministry coordinates drug policy, while the Ministry of Justice is responsible for law enforcement. At the municipal level, policy is coordinated in tripartite consultations among the mayor, the chief public prosecutor, and the police.

The Netherlands has a wide variety of demand-reduction and harm-reduction programs reaching about 80% of the country's 24,000-46,000 opiate addicts. The number of opiate addicts has stabilized over the past few years, with the average age rising to 40, and the number of overdose deaths related to opiates stabilizing at between 30 and 50 per year.

Counterterrorism/Homeland Security
The Netherlands supports counterterrorism efforts with leadership, personnel, and material, including the deployment of troops to Afghanistan as part of the International Security Assistance Force (ISAF). The Netherlands is a party to all 12 UN counterterrorism conventions.

In August 2004, the Act on Terrorist Crimes, implementing the 2002 European Union (EU) framework decision on combating terrorism, became effective. The act makes recruitment for the Jihad and conspiracy with the aim of committing a serious terrorist crime separate criminal offenses. In July 2009, the Dutch Government decided to initiate an external investigation into the legitimacy and effectiveness of Dutch counterterrorism laws and regulations. In January 2008, the appeals court in The Hague acquitted the seven members of the “Hofstad” terror group of participating in a criminal and terrorist organization, finding that “there was no question of a lasting and structured form of cooperation, nor of a commonly shared ideology.” In February 2010, the Supreme Court annulled the appeals court verdict and referred the case back for retrial to the court in Amsterdam. In October 2008, the appeals court in The Hague upheld the guilty verdicts of four members of the “Piranha” terror group for participating in a terrorist organization. Defense attorneys appealed the verdict to the Supreme Court, but the subsequent appeal was withdrawn. In June 2010, the National Counterterrorism Coordinator's Office (NCTb) maintained the terror threat level at "limited." (The Netherlands has four threat levels: minimum, limited, substantial, and critical.) According to the NCTb, this means that the chance of an attack in the Netherlands or against Dutch interests is relatively small but cannot be ruled out. The NCTb believes that the threat of an attack against Dutch interests abroad is greater in countries and regions where groups affiliated with al Qa’ida are active than in the Netherlands itself.

The Dutch have taken a leading role in the European Union, the Financial Action Task Force (FATF), and other bodies to establish financial protocols to combat terrorism. They have assisted countries that lack the capacity to implement measures to combat terrorist financing. The Dutch Government takes steps to freeze the assets of individuals and entities included on the UN Security Council Resolution (UNSCR) 1267 Sanctions Committee's consolidated list. In August 2008, the Prevention of Money Laundering and Financing of Terrorism Act (WWFT) became effective. The act incorporated the EU’s third Money Laundering Directive into Dutch national law.

The Netherlands is an active participant in the Container Security Initiative at Rotterdam, one of Europe's busiest ports. The Dutch Government also permits U.S. CBP Immigration Liaison Officers at Schiphol airport to assist with U.S.-bound passenger screening (the program is now known as the Immigration Advisory Program - IAP). In April 2009, Dutch and U.S. authorities performed the opening of the new FLUX (Fast Low Risk Universal Crossing) system at JFK airport enabling registered travelers between Amsterdam and a number of U.S. airports to go straight through U.S. immigration controls using iris scanners.

Principal Government Officials
Head of State--Queen Beatrix
Prime Minister--Mark Rutte
Minister of Finance--Jan Kees de Jager
Deputy Prime Minister and Minister of Economic Affairs, Agriculture and Innovation--Maxime Verhagen
Foreign Minister--Uri Rosenthal
Defense Minister--Hans Hillen
Ambassador to the United States--Renee Jones-Bos
Ambassador to the United Nations--Herman Schaper

The Netherlands' embassy in the U.S. is at 4200 Linnean Avenue, NW, Washington, DC 20008; tel: 877-388-2443; fax: 202-362-3430.

ECONOMY
The global financial crisis has hit the Netherlands hard since fall 2008; the Dutch economy entered recession in the fourth quarter of 2008, but annual GDP growth that year was 1.9%. In 2009, however, the economy shrank by 3.9%. The economy has recovered slowly in 2010. The first quarter saw economic growth of 0.6%, and in the third quarter the economy grew by 1.8%. Growth of 1.75% is expected for the full year. This is mainly due to the increase in international trade, the largest engine of the Dutch economy. In the first 4 months of 2010, exports increased by 17% and imports by 15% compared to the same months in the previous year. This is the result of not only increased production and trade, but also high oil prices and a weak Euro compared to the dollar. However, the national budget deficit (6.6% of GDP) and unemployment (5.5%) remain causes for concern.

The government has launched three economic stimulus packages since November 2008. The first package was worth about $8.3 billion, the second consisted mainly of government guarantees to stimulate lending and exports, and the third was worth $9 billion, bringing the total value of the stimulus measures to $17.3 billion, or approximately 2% of GDP. A key element of the packages is an agreement among stakeholders that the Dutch Government will not cut its stimulus spending before 2011, and then only “if the economy has recovered sufficiently.” The state finances have further deteriorated due to government interventions in the financial sector, including the nationalization of the Dutch activities of ABN Amro/Fortis Bank (costing a total of $37.6 billion), and capital injections to ING ($12.5 billion total) and other financial institutions whose balance sheets were compromised by U.S. mortgage-backed securities and other toxic assets. The government will sell all of its ABN Amro/Fortis Bank shares at the end of 2010, when the company will re-launch itself as ABN Amro. Meanwhile, the other financial institutions are repaying their government loans; ING has already repaid half of its support.

Private consumption in the Netherlands was 1.3% in 2008, but declined by 2.5% in 2009. It is expected to grow by 0.25% in both 2010 and in 2011. The unemployment rate increased from 3.9% in 2008 to 4.9% in 2009. Halfway through 2010, the unemployment rate was 5.5%. It is expected to remain at this rate over the whole year and through 2011. After a drop in the early 2000s, business investment (excluding the housing sector) staged a recovery from 2005 onwards. In 2008, business investment was up 7.4%, but it decreased sharply by 18.3% in 2009. For 2010, a decrease of 12% is expected. In 2011, the decline is expected to end with investment growth of 1%.

Before the onset of the financial crisis, many firms in the Netherlands cited a loss of competitiveness as a major impediment to growth as unit labor costs outpaced those of their major competitors, including within the euro area. Smaller wage increases codified in collective bargaining agreements before growth accelerated in 2006 helped Dutch firms stay competitive during this period. However, an increasing labor shortage resulted in higher wage demands in the second half of 2007 and into 2008, with the average wage increasing by 3.3%. The pace of job growth number of jobs steadily increased up to 2008, but then declined sharply in 2009 as fallout from the financial crisis constricted demand. Inflation ranged from 1.1% to 1.7% between 2004 and 2009, with a peak of 2.5% in 2008. In 2009, it was down to 1.2%. In the first half of 2010, inflation per month was 0.9% on average.

The Netherlands was one of the first EU member states to qualify for the Economic and Monetary Union (EMU). Traditionally, Dutch fiscal policy sought to strike a balance between further reductions in public spending and lower tax and social security contributions. During the first half of the current decade, the government struggled to keep the budget deficit within the limit of 3% of GDP set by the EU’s Growth and Stability Pact. The government achieved a budget surplus of 0.5% in 2006, 0.2% in 2007, and 0.7% in 2008. This shifted to a deficit of 5.3% in 2009 as a result of the crisis, more specifically increased government spending on stimulus packages, unemployment benefits, and financial sector bailouts. In its midterm budget evaluation of 2010, the government reported a deficit of 6.6% GDP, and an EMU debt of 66% GDP. However, due to several austerity measures taken by the government, the deficit is expected to be 4.7% in 2011. More austerity measures are expected to be taken by the new government to bring the deficit under control.

Government Role
Although the private sector is the cornerstone of the economy, the Netherlands has an important and vibrant public sector. The government plays a significant role through permit requirements and regulations pertaining to almost every aspect of economic activity; however, many advisory bodies and the private sector are calling upon the next government to significantly reduce the administrative burden and shrink the public sector. In the recent past, some environmental regulations have been temporarily relaxed to speed up certain infrastructure projects, particularly those related to economic stimulus measures. The government had gradually reduced its role in the economy since the 1980s, but it has been forced to become more active again as the economic downturn has necessitated its intervention. Unabated privatization came to a halt in December 2007, when the government approved a policy that "the State will not pursue selling its interest in approximately 30 companies of 'vital interest'." For example, the government is currently engaged in a protracted legal battle to prevent the national power grid from potentially falling into the hands of the private sector.

Trade and Investment
The Netherlands, which derives more than two-thirds of GDP from merchandise and services trade, had a record trade surplus of approximately $47 billion in 2007. In 2008, this surplus decreased to approximately $43.2 billion, and in 2009 to $42.2 billion. With no significant trade or investment barriers, the Netherlands remains a receptive market for U.S. exports and an important investment partner. The Netherlands is the seventh-largest destination for U.S. exports ($32.3 billion in 2009), as well as the fourth-largest direct investor in the United States. Dutch accumulated direct investment in the United States in 2007 was $209 billion. The United States is the second-largest investor in the Netherlands, with $370 billion direct investment as of 2007. There are more than 1,600 U.S. companies with subsidiaries or offices in the Netherlands. The Dutch are strong proponents of free trade and staunch allies of the U.S. in international forums such as the World Trade Organization (WTO) and the Organization for Economic Cooperation and Development (OECD).

Sectors of the Economy
Services account for about three-quarters of the national income and are primarily in transportation, distribution, logistics, and financial areas such as banking and insurance. Industrial activity generates about a fourth of the national product and is dominated by the metalworking, oil refining, chemical, and food processing industries. The agriculture and fisheries sector account for some 2% of GDP.

Although Dutch crude oil production is small, the Netherlands is the third-largest producer and the second-largest net exporter of natural gas in Europe (after Norway). At year-end 2006, the country had 1.4 trillion cubic feet of natural gas reserves valued at over $166 billion. The port city of Rotterdam is one of the world's major centers for crude oil imports, trading, refining, and petrochemical production. Key import sources include Russia, Saudi Arabia, and Norway. Domestic gas resources are forecast to run out by 2030. To remain an energy player after its own resources are depleted, the Netherlands is cultivating energy relationships with potential long-term supplier countries such as Algeria, Kazakhstan, Libya, Qatar, and--most importantly--Russia. For example, Dutch gas pipeline company Gasunie, wholly owned by the Dutch Government, holds a 9% stake in Gazprom’s Nord Stream pipeline, which will transport gas from Russia to Germany under the Baltic Sea. The Netherlands’s goal is to become a gas “roundabout” for the Western Europe, meaning a hub that gathers natural gas from various sources (including the North Sea, Algerian and Qatari liquefied natural gas (LNG), and Russia), and then distributes it via pipeline to continental Europe.

Environmental Policy
The Netherlands is a small and densely populated country. Its economy depends on industry (particularly chemicals and metal processing), intensive agriculture and horticulture, and its infrastructure, which takes advantage of the country's geographical position at the heart of Europe's transportation network. These factors have led to major pressure on the environment. The government works closely with industry and nongovernmental organizations to reach environmental targets. The Dutch welcomed the EU's 2008 directive to cut greenhouse gas (GHG) emissions 20% from 1990 levels and increase power derived from renewable sources to 20% by 2020. In its national “Clean and Efficient” climate plan published in September 2007, the government unilaterally promised to go even further by 2020: reducing GHG emissions by 30% and cutting its overall energy use by 2% per year. The Environment Ministry recently unveiled its plan requiring the entire Dutch Government to procure only sustainable, “green” goods and services as of 2010. The government acknowledges it will need to rely heavily on fledgling clean energy technologies in order to reach its GHG reduction goals. Many independent energy experts, however, consider the government’s aggressive climate change targets to be overly optimistic.

FOREIGN RELATIONS
The Netherlands abandoned a longstanding policy of neutrality after World War II. The Dutch are engaged participants in international affairs. Dutch foreign policy is geared to promoting a wide variety of goals: the rule of law, human rights, and democracy. Priority is given to enhancing European integration, ensuring European security and stability (mainly through the mechanism of NATO and by emphasizing the important role the United States plays in the security of Europe), and participating in conflict management and peacekeeping missions.

The Netherlands generally pursues its foreign policy interests within the framework of multilateral organizations. The Netherlands is an active and responsible participant in the United Nations as well as other multilateral organizations such as NATO, the EU, the Organization for Security and Cooperation in Europe (OSCE), the Council of Europe (CoE), the Organization for Economic Cooperation and Development (OECD), the WTO, and the International Monetary Fund. A centuries-old tradition of legal scholarship has made the Netherlands the home of the International Court of Justice; the Permanent Court of Arbitration; the Yugoslavia War Crimes Tribunal; the Special Tribunal for Lebanon; the European judicial and police organizations Eurojust and Europol; the Organization for the Prohibition of Chemical Weapons (OPCW); and the International Criminal Court. Dutch security policy is based primarily on membership in NATO, which the Netherlands joined as a charter member in 1949.

The Dutch have traditionally been strong advocates of European integration, and most aspects of their foreign, economic, and trade policies are coordinated through the European Union. However, Dutch voters rejected the EU constitutional treaty in June 2005. Parliament approved the Lisbon Treaty in September 2008.

The Netherlands' post-war customs union with Belgium and Luxembourg (the Benelux group) paved the way for the formation of the European Community (precursor to the EU). Likewise, the Benelux abolition of internal border controls was a model for the wider Schengen accord, which today has 15 European signatories, including the Netherlands, pledged to common visa policies and free movement of people and goods across common borders.

The Dutch were key proponents of the 1992 Maastricht Treaty and were the architects of the 1998 Treaty of Amsterdam. They have embraced the introduction of new member states and the common currency (euro). In recent years, however, the Dutch have become increasingly skeptical of the way the EU is run and of any further enlargements.

Foreign Aid
The Netherlands has traditionally been one of the world's most generous aid donors. The Dutch provide a fixed 0.8% of GDP--approximately $7 billion--in overseas development assistance (ODA) annually. This makes the Dutch the world’s fourth-largest aid donor as a percentage of GDP and the sixth-largest in absolute terms. In 2009, ODA shrank in absolute terms because GDP shrank by 4%. In 2010, however, the Netherlands donated 0.82% of GDP to development assistance, which amounted to $5.9 billion. The new government is planning to reduce spending on ODA to 0.7% of GDP.

Despite the difficult economic situation, former Development Minister Koenders (before his departure from office in February 2010) worked to sustain Dutch leadership in international development. Koenders released a new foreign assistance strategy in October 2007 based on the Millennium Development Goals (MDGs). The strategy identifies safety and development, human rights, opportunities for women and girls, and sustainable energy as the priority areas for Dutch ODA. These thematic issues continue to receive the largest share of the ODA budget--about $4.2 billion in 2009. The government consistently contributes large amounts of aid through multilateral channels, especially the UN Development Program, international financial institutions such as the World Bank, and EU programs. Dutch ODA through these multilateral channels totaled almost $1 billion in 2009.

The Netherlands also provides direct bilateral development assistance to select partner countries. In 2010, this assistance totaled about $1.3 billion for 40 partner countries, with the largest share going to Indonesia, Sudan, Tanzania, and former colony Suriname. Another highlight is Afghanistan, where the Netherlands donated almost $116 million in 2008 through bilateral and multilateral channels; this was part of the Dutch commitment to provide a total of $311 million to Afghanistan from 2006-2008.

International Drug-Trafficking Control
The Dutch work closely with the United States and other countries on international programs against drug trafficking and organized crime. There is close Dutch-U.S. cooperation on joint counternarcotics operations in the Caribbean. The Netherlands actively participates in the Drug Enforcement Administration's (DEA) El Paso Intelligence Center (EPIC) and is a full member of DEA’s International Drug Enforcement Conference (IDEC). The U.S. Coast Guard and the Royal Netherlands Navy actively work together in the drug transit zone in the Caribbean Sea through a bilateral Law Enforcement Detachment (LEDET) Arrangement. The Netherlands is a signatory to international counternarcotics agreements, a member of the UN Office on Drugs and Crime (UNODC), the UN Commission on Narcotic Drugs, and the 1990 Strasbourg Convention on Money Laundering and Confiscation, and is a major contributor to international counternarcotics projects.

U.S. RELATIONS
The U.S. partnership with the Netherlands is one of its oldest continuous relationships and dates back to the American Revolution. The excellent bilateral relations are based on close historical and cultural ties as well as a common dedication to individual freedom and human rights. The Netherlands shares with the United States a liberal economic outlook and is firmly committed to free trade. The United States attaches great value to its strong economic and commercial ties with the Dutch. In 2009, the Netherlands was the largest destination for United States direct foreign investment, with 13.4% of the total. This made the United States the largest direct foreign investor in the Netherlands. Vice versa, the Netherlands was the ninth-largest direct foreign investor in the United States in 2009. In 2008, however, the Netherlands was the largest direct foreign investor in the United States.

The United States and the Netherlands often have similar positions on issues and work together both bilaterally and multilaterally in such institutions as the United Nations and NATO. The Dutch have worked with the United States at the WTO and in the OECD, as well as within the EU to advance the shared goal of a more open, market-led global economy. The Dutch, like the United States, supported the accession of 10 new members to the EU in 2004, and accession negotiations for Turkey in 2005.

The United States and the Netherlands joined NATO as charter members in 1949. The Dutch fought alongside the United States in the Korean War and the first Gulf War and have been active in global peacekeeping efforts in the former Yugoslavia, Afghanistan, and Iraq. The Netherlands played a leading role in the 1999 Kosovo air campaign. They currently are contributing to EU peacekeeping forces in Bosnia. In the initial phase of the recent Iraq conflict, the Dutch deployed Patriot missiles to protect NATO ally Turkey, and sent a battalion of troops to Iraq to participate in stabilization operations. The Dutch also support and participate in NATO and EU training efforts in Iraq. They are active participants in the International Security Assistance Force in Afghanistan and in both EU as well as NATO counter-piracy operations.

Principal U.S. Embassy Officials
Ambassador--Fay Hartog Levin
Deputy Chief of Mission--Edwin R. Nolan
Acting Political-Economic Counselor--Shawn K. Gray
Global Affairs Officer--David E. Jaberg
Legal Counselor--John J. Kim
Public Affairs Counselor--Julie Moyes
Management Counselor--Graham L. Webster
Regional Security Officer--John L. Bush
Defense Attache--Captain Daniel Braswell
Office of Defense Cooperation--Colonel Charles C. Mau
Commercial Counselor--Maria J. Andrews
Agriculture Counselor--Stephen M. Huete
Consul General, Amsterdam--Julie A. Ruterbories

The U.S. Embassy is located at Lange Voorhout 102, 2514 EJ The Hague; tel: 31-70-310-2209; fax: 31-70-310-2307. The Consulate General is at Museumplein 19, 1071 DJ Amsterdam; tel: 31-20-575-5309; fax: 31-20-679-0321.

[This is a mobile copy of Netherlands (12/13/10)]