25-05-13

American Chamber of Commerce in Belgium

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American Chamber of Commerce in Belgium

April 2013

Are US Companies Important to Belgium?

AmCham Belgium’s answer is a resounding YES, based on research that we carried out for our new report The Importance of US Companies in Belgium published on March 14. Our research revealed that the 50 largest US companies in Belgium employed 90,334 people and contributed €1.7 billion to government finances in taxes and social security in 2011, the last year for which official data are available.

The report includes an updated listing of the US Top 50 Companies in Belgium ranked by number of employees.  With 14,059 employees, ManpowerGroup tops our list for the second year in a row. Looking at the historical presence of US companies in Belgium, the top 10 companies in our list have been active in Belgium an average of 62 years. As Marcel Claes, Chief Executive of AmCham Belgium, said at the launch event, “These companies are here for the long term, and they want to be here for the long term.” What then is drawing them to Belgium?

People first

The Importance of US Companies in Belgium report was launched with a panel discussion between representatives of three of the US Top 50 companies. The panelists were quick to praise Belgium’s highly educated, multilingual and flexible workforce. This is important for Coca-Cola and Pfizer, both of which have major research centers in Belgium, and for Accenture whose ‘product’ is its people. Eric Lonbois of Accenture said, “Access to skills is very crucial.” He went further, equally stressing the mindset. Belgians tend to be very open towards other cultures, which is an important consideration for international companies.

Need for stability

The picture isn’t entirely rosy, however. The US Top 50 companies employed 2.3% fewer people in 2011 than in 2010. Asked for areas where Belgium can improve, all of the panelists called for stability. Peter Menu of Pfizer said it best: “I think that we need stability... We love to plan, in 1 year, in 5 years, in 10 years.” It’s difficult for companies that make big investments in Belgium to explain to their American headquarters that the rules have changed in the middle of the game.

Competitiveness was another concern. This includes not only the high cost of labor but also the tax regime. Jean Eylenbosch of Coca-Cola described the country as a sponge: “It’s small, it’s flat but it absorbs everything.” This has led Coca-Cola’s products to be 20-30% more expensive here than just across the border in France or Luxembourg.

Conclusion

Yes, US companies have made a significant and longstanding contribution to Belgium. The overall figures from the report are impressive to be certain – 90,334 employees, €1.7 billion – and this is not even the complete picture. Our research did not take into account two other important factors: indirect employment and employees’ fiscal contribution. In the pharmaceutical industry, for example, the multiplier has been placed at 2.5 – that is, for every employee hired by a pharma company, another 2.5 jobs on average are created outside of the company. Moreover, the US Top 50 companies paid out nearly €5 billion in wages and salaries, on which their employees must also pay taxes and social security. That’s up to €2.5 billion more for the Belgian state. And there are, of course, other elements which cannot be quantified, such as the high quality of jobs created by US companies.

Wrapping up the panel discussion, Scott Beardsley, President of AmCham Belgium, said, “If there was ever any doubt about it in people’s minds, US companies are still important in Belgium, but I would also say that Belgium is important for US companies.”AmCham Belgium will release its 2013 Priorities for a Prosperous Belgium with specific policy recommendations for the Belgian Government on May 29.

The panel discussion on March 14 was immediately preceded by AmCham Belgium’s Annual General Meeting. Eight new board members were formally elected. In addition to the six who have been serving in an advisory capacity since their nomination last September, the new board members include Joost Maes from Egon Zehnder and Roland Teixeira de Mattos from GE Europe.

The four board members whose term came to an end this year were also all re-elected: Ludo Deklerck of Bird & Bird LLP, Jean Eylenbosch of Coca-Cola Enterprises Belgium, John Largent of Magic Monkey and Eric Lonbois of Accenture.

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Building the Largest Free Trade Zone in the World

by Karel De Gucht, Trade Commissioner, European Commission

Two billion euros is the value of the goods and services that cross the Atlantic between the EU and the US everyday. Two trillion euros is slightly less than the value of the investment stocks that European and American firms hold in each other’s jurisdictions. The transatlantic relationship is the biggest commercial relationship in the world. 

But if trade already flows so abundantly, why negotiate a new EU-US trade agreement?

First, despite the success of our relationship, there is still a great deal of untapped potential. Though the tariffs we impose on imports are low 

– around 4% on average 

– the volume of our trade 

is enormous. As a result, every tariff we remove, even the lowest ones, will result in millions of euros of savings to companies, savings which can be reinvested for growth. For example, car parts sometimes cross the Atlantic more than once – as components on their first journey and then going back in the finished product – meaning they currently may pay tariffs twice.

But tariffs will only be a small piece of the deal. We are aiming for an even bigger package, which will include opening of markets for services and, very importantly, in public procurement. The most effort, however, will go into addressing those barriers that lie behind the customs border, such as differences in technical regulations, standards and certification requirements. These technical barriers to trade are estimated to have the same effect as if we had extra tariffs of between 10 and 20% per product.

As an example, rules in the US and the EU on car safety are similarly strict, as public safety is always our top priority. 

But even if they have the same objective – to make cars safe for the road – the technical rules to achieve that objective differ. A car producer who wants to sell his car both in Europe and in the United States has to get it safety checked twice. This costs time and money. If we aligned our standards, or accepted the principle that a car which is found to be safe on one side of the Atlantic is also safe enough on the other, we could make real savings both for the producers, the regulators and ultimately for the consumers. If we do it well, we would be able to maintain the same levels of health and safety, but boost growth and create jobs with less red tape.

Second, because we are the biggest trade relationship in the world, transatlantic standards could be embryos of future world standards. This would mean that our businesses would not have the extra cost of producing for a plethora of different standards around the world. And because the same would apply to companies in other parts of the world, an ambitious transatlantic agreement would in effect be a global public good.

So I believe that it’s certainly not exaggerated to say that such a ‘transatlantic economic alliance’ will be groundbreaking. In short, it moves beyond anything we have done before. It could boost our economies by between 0.5% and 1% of GDP and offer real returns to everybody – expected €545 per average household in Europe – for next to no investment. Truly, this is the cheapest stimulus package you can imagine. Given that both Europe and America are recovering from the biggest economic crisis in living memory, we cannot afford to ignore these gains now. And all EU Member States stand to gain. In Belgium, for example, as Europe’s second largest port, Antwerp will benefit from the overall increase in trading volumes. In addition, exports of key Belgian products like high-quality beer and food products can also be expected to be winners. 

Can we achieve it? Reaching an ambitious deal will not be easy. The more we seek to achieve, the more protected vested interests will seek to oppose us. And finally, we want to do this as quickly as we can – in two years, if possible – though speed will not trump quality. I am ready to go the extra mile to achieve it. ¦

Karel De Gucht has been European Commissioner for Trade since February 2010. Together with US Trade Representative Ron Kirk, he worked on a report recommending the launch of negotiations for a Transatlantic Trade and Investment Partnership (TTIP) which was announced by US President Barack Obama, European Commission President José Manuel Barroso and European Council President Herman Van Rompuy on February 13, 2013.

A lawyer by training and a Belgian liberal (Open-VLD), he has held numerous political offices at both national and European level. He was first elected as a Member of the European Parliament at the age of 26 and has more recently been both Belgium’s Deputy Prime Minister and Minister of Foreign Affairs (2004-2009) before first joining the European Commission as Commissioner for Development and Humanitarian Aid (2009-2010).

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AmCham Belgium is a membership-led and -funded organization and the undisputed leader in providing business advocacy for doing business in Belgium. With its lobbying efforts and numerous conferences, publications and studies, we invite you to discover how we can play a pivotal role for your business in Belgium.

AmCham Belgium thanks its 2013 Diamond Sponsors: Deloitte, McKinsey&Company, Pfizer, Swift and would also like to thank its 2013 Gold Sponsors: 3M • AWEX • Baxter • Brussels Invest & Export Agency • Center for Creative Leadership • Conac • DHL Global Forwarding • Donaldson • Du Pont de Nemours • Eli Lilly • Ernst & Young • ExxonMobil • Flanders Investment & Trade • Gosselin Moving • Metropole Hotel • St John's International School • Steptoe & Johnson

American Chamber of Commerce in Belgium ASBL/VZW, rue du Trône 60 Troonstraat, 1050 Brussels - Tel. +32 (0)2 513 67 70 - Fax. +32 (0)2 513 35 90 - E-mail: gchamber@amcham.be

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Photo: Belgian Prime Minister Elio Di Rupo and Obama at the NATO Summit in Chicago, May 21, 2012 

The U.S. ranks as Belgium’s 5th principal trading partner; with Belgium ranked 18th for largest U.S. trading partner.  Bilateral trade was worth over $41 billion for the year 2010.

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