Mark Rutte had his first encounter with Barack Obama at the White House today, and economics was top of the agenda – specifically, Rutte and the Ministry of Foreign Affairs played along with Obama’s current No. 1 concern and emphasised the number of jobs Dutch business concerns provide in the United States. 625,000, to be precise, according to a report assembled by the Dutch Embassy in Washington DC, a total which combines jobs linked to US exports to the Netherlands and jobs secured through Dutch investments in the US.

The packaging of the Rutte visit in this economic context is of course choosing a topic that will get the President’s ear, but it is also a smart move to focus on the economics of the Dutch-US relationship. While the importance of the Netherlands has declined in American eyes, the stats on trade and investment remain remarkable.

The Netherlands still holds on to the No. 3 position in terms of foreign direct investment in the US with $217bn. Beyond this is the fact that the US invests more in the Netherlands than any other state – $521bn. As the Dutch Ambassador Renee Jones-Bos puts it, “It is the result of our shared entrepreneurial spirit,” which is nice, but kind of glosses over the impact that extremely favourable Dutch tax and company registration policies have in making the Netherlands such an attractive destination for US funds. Most of the 1500+ US companies registered in the Netherlands are after all holding companies – shells profiting from a foothold in the Single Market. I also like the way the Netherlands is promoted as “a reliable trade and investment partner to the U.S,” a semi-swipe at those other nations that are perhaps not so trustworthy with their holdings of billions of US government bonds…..

But ok, the figures to an extent certainly speak for themselves. Its also fun to see a country exploiting the fact that it runs a major trade deficit with the US as an item of pride, not concern – ‘Hey, we buy loads of your stuff, we’re on your side!’ Rutte has rammed this pitch home by floating the idea of a US-EU free trade zone to further boost jobs, trade, investment – and who better to do this than the Dutch, pushing the merits of free trade from within the centre of the European integration process since day one (unlike the Brits, who may talk free trade but don’t walk the EU). “Dutch business leaders look forward to an intensive dialogue with American authorities” on this issue, according to Rutte in a ‘leaked’ press release. And why not? The transatlantic economy may be fading slightly in terms of trade (the US now trades more with Asia as a whole), but in terms of investment it is way ahead of anything crossing the Pacific. As the American Chamber of Commerce in Rotterdam put it, “mutual investment in the North Atlantic space is very large, dwarfs trade, and has become essential to U.S. and European jobs and prosperity.” And the Dutch are pretty well integrated into American socio-economic life, down to the Little Amsterdam Coffeeshop in Saratoga, California, that sells a good ……. pea soup.

But perhaps the nicest part of the whole (brief) Rutte-Obama show is the Dutch Embassy’s report on the US-Dutch economic relationship. Having had a dig in the last post below at the downward direction of the Dutch brand, the interactive maps of the Economic Ties report are great. Just shows, even economic chauvinism can sometimes look really good.

The Dutch have long considered themselves to be a builder of bridges between Europe and Washington. Europe is important but NATO is still fundamental on the Dutch strategic horizon. The current Minister of Foreign Affairs Maxime Verhagen stated in 2008 that “a strong Atlantic relationship directly serves Dutch interests” [Internationale Specator, 62 (Oct 2008)] When confronted with certain issues Dutch diplomats, contrary to the Belgians, thus still have a choice to make: going Atlantic or going European.

The European project is for the Dutch and its politicians a multilateral project, a far cry from the federal utopia the Belgians are pushing for. This cooperation among states can be expanded when needed, but the independent Dutch want to keep their options open. The plebiscite about the European constitution of the first of June 2005 was a more recent example of how the Dutch are rather cool lovers of a federal Europe.

From this comparative perspective, the claim that Dutch foreign policy is guided by a dogmatic Atlantic reflex must be tempered. It is correct that the Belgians made the right decision to condemn the Iraq War, but they did not explore all options. The Dutch, by contrast, thought about their options and believed that supporting the Americans would pay off and chose the Atlantic option. In hindsight it was a wrong choice, but calling that behavior dogmatic is overstated when we compare it with the Belgian decision-making process. The spirit that guided the Dutch decision was not the Atlantic Reflex, but the lack of a European reflex. If the Dutch government had convincingly promoted the Atlantic alliance, with the vigor that characterizes Belgian adherence to European integration, than one could speak about a genuine reflex.

However what rises up out of the five hundred pages of the Davids Report is the enormous difficulty that accompanied the decision of the Dutch government. Conversely, the Belgian decision to condemn a possible invasion was a cake walk. Consequently the Dutch decision-making process in itself – isolated from its outcome – can be interpreted differently. Compared to Belgium, the Dutch thoroughly evaluated all options, and then made the wrong decision. The decision of the Dutch government was not a consequence of too much dogmatism, but too little of it. Especially when we take into account the very flexible way that international law – an idea launched by a Dutchman named Hugo Grotius and embodied by the International Court of Justice and the International Criminal Court in The Hague – was interpreted.  

Although Belgium made the right decision, it is hard to say if the European reflex will pay off in the future. Nevertheless in a new world where new powers and new economies claim their rightful place at the table, a European reflex, or even a more modest European twitch, seems to be the more successful spasm that small countries such as the Netherlands and Belgium can possess.