overview of US-Belgian economic relations

1. ECONOMIC RELATIONSHIP BETWEEN THE UNITED STATES AND BELGIUM
Introduction
Belgium is well known in the United States for its excellent cuisine. Its chocolate,
waffles, beer and restaurants continue to impress many Americans. Others are familiar
with Belgium’s diamond industry. These products and services illustrate a Belgian
tradition of quality, innovation, and craftsmanship. Belgium stands for the creation of
high value products and services by highly skilled employees.
The Belgian-U.S. economic relationship is heavily focused on modern, high value goods
and services as well. The leading Belgian sectors for U.S. export and investment include
aerospace, automotive, chemicals, energy, environmental technologies, biotechnology,
information and communicating technology, green building, pharmaceuticals, medical
and dental equipment, safety and security, and logistics.
Belgium is an excellent test market for U.S. companies. The cosmopolitan nature of
Belgium and its mix of Germanic and Latin cultures make it an ideal European test
market for American products and services. The Belgian market is small enough that a
huge European-wide commitment to a new product is not necessary, yet diverse and
competitive enough that it offers a representative sample of potential buyers and
competitors governed by the same legal system. Belgium may be only the size of
Maryland, but it is the 20th economy in the world with more than 10 million people.
Belgium’s central location in the wealthy region of Europe makes the country an ideal
gateway for U.S. exports to Europe. As a result, Belgian-U.S. trade relations have always
been well developed. The Belgian American Chamber of Commerce in the United States,
for example, was formed in 1918 in response to the growing commerce between
Belgium and the U.S., making it one of the oldest and most established chambers in the

2. U.S. At the same time, U.S. companies in Belgium are members of AmCham Belgium and
AmChamEU, two separate “sister” organizations, focusing on their individual
memberships and goals. The two Chambers collaborate closely and especially on
business issues that interrelate Belgium and the European Union. While AmCham
Belgium focuses on improving business and investment opportunities for the US-Belgian
business community through lobbying, networking and knowledge sharing, AmCham EU
acts to inform and lobby the European institutions on behalf of American companies
throughout Europe.
Within a radius of 300 miles from Belgium, 140 million EU consumers can be reached
(almost 50% of the U.S. population) representing 60% of Europe’s purchasing power.
About 80% of Belgium’s GDP is exported. Study after study have shown that Belgium is
the ideal hub for European transit and distribution, and the country continues to be a
magnet for many North American companies desiring to establish a presence in Europe.
Currently, more than 1500 U.S. companies are located in Belgium.
Belgium is also widely known in the U.S. for its capital, Brussels, and the significant role
the city plays as host to the EU institutions and NATO. Brussels has become the second
city in the world for diplomats, behind New York, and the second city for foreign
journalists, after Washington DC. It is the place to be in Europe for U.S. companies
seeking to influence EU decisions and regulations. Belgium also offers specific business
opportunities for U.S. companies servicing the international organizations locally
present. Attracted by the EU 1992 single market program, many U.S. law firms and
lawyers have settled in Brussels since the early 1990s.
Brussels’s diplomatic role and the large presence of U.S. companies in Belgium ensure
that a large number of U.S. political and business leaders stay frequently in Belgium.
The resident American community in Belgium now exceeds 20,000. It is rare to
encounter U.S. business leaders or officials who have not spent some time in Brussels in

3. the recent past. This wealth of experience and international contacts, in turn, often lead
to even deeper economic ties between the two countries.

4. Trade
The trade relationship between Belgium and the United States is important for both
countries, and it is by no means a one way street.
Belgium is one of the countries with which the U.S. has a substantial trade surplus.
According to the U.S. Census Bureau, bilateral U.S.-Belgian trade was worth $ 41 billion
(2010). This makes Belgium a more important trading partner for the U.S. than India,
Australia, Russia, or Spain. Container ships carrying over 4000 containers a day make
Antwerp the most important port in the world for transport of goods to and from the
United States.
The U.S. is the number one trading partner for Belgium outside the EU, and the 5th
trading partner overall. It is also the 5th export market for Belgium (figure 1 and 2).
figure 1-Belgian Export Destinations (01-09/2010)
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figure 2- Belgian Suppliers (01-09/2010)
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5. Main Belgian exports to the U.S. include chemicals products, machines and equipment,
precious stones and metals, transport equipment, and mineral products (figure 3). The
U.S. has a particular strong position for trade in services. According to the Belgian
Agency for Foreign Trade, almost 3,000 Belgian companies currently export to the U.S.
market.
figure 3- Belgian Main Exports to the U.S. (%, 2009)
5
5.2 chemical products
5.2 machines & equipment
9.7 transport equipment
mineral products
63.3
precious stones &
metals
Belgium is the 18th trading partner for the United States. U.S. exports to Belgium
equaled $25.5 billion in 2010, i.e. almost 30% of U.S. exports to China. Through
November 2010, Belgium ranked as the 14th largest market for the export of U.S. goods.
Main exports from the U.S. to Belgium include chemical products, machines and
equipment, optical instruments, plastics and minerals (figure 4). In states like Texas,
Pennsylvania, Georgia and South Carolina, Belgium is among the top 10 export
destinations. Belgium is among the top 5 European export markets in more than half the
U.S. states, including California, New York, Illinois, and Texas.

6. figure 4-Belgian Main Imports From the U.S. (%, 2009)
5.6 chemical products
9.1
machines &
equipment
37.5 optical instruments
12.3
plastics
minerals
16.4
The Belgian contribution to the U.S. economy perhaps started with the invention by
Solvay brothers Ernest and Alfred of a new process for producing sodium carbonate,
which revolutionized how Americans with little access to yeast on the frontier made
their bread. Sodium carbonate imported into the U.S. was turned into sodium
bicarbonate, baking soda. From those humble beginnings was born the Solvay Group,
with companies worldwide. Baking soda is found today in every American home.
Later on, thousands of Belgians settled in the Midwest and founded new communities
which they named after their Belgian hometowns like Antwerp, Ohio and Namur,
Wisconsin. The settlers also brought with them their skills and talents and were
responsible for building the glass industry in the U.S.
Today, Belgian companies and business leaders continue to be very active on the U.S.
market. As of 2010, Belgians held senior management positions at the highest levels
with companies like Xerox, Johnson & Johnson, Boeing, Nike, Cargill and Procter &
Gamble. The fact that Belgian researchers recently received prestigious American
scientific awards like the Ernesto Orlando Lawrence Award (U.S. Department of Energy),
the NIH Pioneer Award, and the Paul Janssen Award for Biomedical Research, illustrate

7. Belgian American scientific links. Scientific ties between the U.S. and Belgium are
enhanced by the Belgian American Educational Foundation (BAEF), the leading
independent philanthropy in the support of exchanging university students, scientists
and scholars between the United States and Belgium.
Belgian products and services have now increasingly become part of life in the United
States. Beyond beer and chocolates, these products in the U.S. are Belgian too:
• House of Anubis, the popular series on the Nickelodeon Channel in the U.S.
• a variety of drugs, such as epilepsy, allergy and HIV medications
• miniaturized transmitters/receivers for patient motion tracking during
radiotherapy
• a cargo inspection system designed to automatically detect nuclear threats in
the U.S.
• the processing of US mail in an effort to specifically guard against exposure to
anthrax
• audiovisual screens for the American corporate jets, large display walls for the
Command Centers of the US Coast Guard, large scoring boards and
entertainment screens during US basketball games
• non-polluting buses on fuel cells, providing public transportation buses for many
US metropolitan areas, including Washington DC, and San Francisco.
• sports playing field surfaces for NFL teams like the Pittsburgh Steelers, the
Denver Broncos, the Philadelphia Eagles and the Green Bay Packers
• a free software package that allows an individual or a community of users to
easily publish, manage and organize a wide variety of content on a website, used
by the White House
Economic links between the countries are being forged at the state level as well. In
2010, the California High-Speed Rail Authority signed a memorandum of understanding

8. (MOU) with Belgium to continue sharing high-speed rail planning and development
information. And BioNJ, New Jersey’s biotech industry organization, signed a
memorandum of understanding (MOU) with FlandersBio, the regional umbrella
organization for the life sciences and biotechnology sector in Flanders, to solidify
international ties between the clusters.
As stated above, Belgium offers specific business opportunities for U.S. companies
servicing the EU and NATO. Most tenders from European public contracting authorities
for public supplies, whose value is above the agreed thresholds, are open to U.S.-based
companies by virtue of the WTO Government Procurement Agreement (GPA). The GPA
allows U.S. firms to bid on all supplies and services, and some construction works
contracts, above thresholds contracted by EU central public contracting authorities.
However, there are restrictions for U.S. suppliers in the utilities sector, both in the EU
utilities directive and in the EU coverage of the GPA. These restrictions are only applied
when no reciprocal access for EU companies in the U.S. market is offered.
The website of the U.S. Mission to the EU has a database of all European public
procurement tenders open to U.S.-based firms by virtue of the GPA.
Belgium is also an excellent location to access NATO’s Security and Investment Program
through NATO’s acquisition agencies. Both agencies procure goods and services through
preferred suppliers and International Competitive Bidding (ICB) for larger projects. The
investments cover communications and information systems, radar, military
headquarters, airfields, fuel pipelines and storage, harbors, and navigational aids. It also
includes Peace Support Operations such as SFOR and KFOR including Communications,
Information Systems, Local Headquarters Facilities, Power Systems, and Repairs to
Airfields, Rail, and Roads.

9. Investment
Foreign investment has contributed significantly to Belgian economic growth since the
1960s. In particular, U.S. firms played a leading role in the expansion of light industrial
and petrochemical industries in the 1960s and 1970s. Today, the U.S. is Belgium’s third
largest foreign investor, and the value of foreign investment between the U.S. and
Belgium exceeds $100 billion. In fact, U.S. investment stakes in Belgium at the end of
2009 (figure 5) were on par with the combined U.S. investment position in China and
India. Over the last decade, Belgium has been the 11th overseas market for U.S. foreign
investment.
figure 5- U.S. investment in Belgium (total value)
80
70
60
50
$ billion
40
30
20
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Today, U.S. companies in Belgium account for approximately 6% of the total work force.
They are heavily represented in the chemical sector, automotive assembly, petroleum
refining, and pharmaceutical sectors (figure 6). A number of U.S. service industries
followed in the wake of these investments, such as banks, law firms, public relations,
accounting, and executive search firms. Overall, most of the U.S. investment has been in
the finance and insurance sector, and in chemical manufacturing. But investment in the
service industry, including law firms, accounting firms, advertising agencies, and
computer and management services, has more than tripled since 2000.

10. figure 6- U.S. Investment in Belgium by Sector (as of 2009)
23%
finance & insurance
chemical manuf.
45% wholesale trade
2%
holdings
4%
services
8% other
18%
U.S. foreign direct investment (stock) in Belgium totaled about $ 70 billion (cumulative)
in 2009, which is almost 50% more than U.S. investments in China. Since 2005, the U.S
has consistently been the origin of the most foreign investment projects throughout the
regions of Flanders, Brussels and Wallonia. US Direct Investment (USDI) flows to Belgium
have increased rapidly after a steep decline during the economic crisis. Inflows into
Belgium have been on the rise again since mid-2009 to reach $9.1 billion in 2010,
compared to about $5 billion in 2008-2009. The 2010 level exceeded the pre-crisis level
of $7.5 billion in 2007. U.S. firms invested more capital in Belgium ($7.9 billion) than
either Brazil, China, or India in the first nine months of 2010.
As of 2008, U.S. companies employed 129,000 in Belgium, making the U.S. the second
most important foreign employer in Belgium. Almost half the employment was in
manufacturing, particularly in the chemical and transport industries. Investment in R&D
by Belgian affiliates of U.S. companies represented 19% of total R&D investment by
businesses in Belgium.
For their part, Belgian companies have invested about $39 billion in the U.S. as of 2009.
Overall, Belgium is the 15th investor in the United States (figure 7). Belgian investment
supports some 180.000 jobs in the U.S., which makes Belgium the 7th supporter of
European jobs in the U.S. (figure 8).

11. figure 7-Belgian Investment in the U.S. (total value)
45
40
35
30
$ billion
25
20
15
10
5
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
figure 8- U.S. Employment by European country origin (2008)
1000 957.4
800
614.2
600 550.2
thousands
394.4 371.5
400
200 181.5 179.3
86.5 66.8 66.2
0 UK D F CH NL SE B ITA ES IRE
Belgian companies are present in the U.S. in a wide range of industries from
petrochemicals to quality food and textiles, from luxury buses and steel products to
pharmaceuticals and energy production, and from diamond cutting tools and industrial
machinery to graphic design and display systems and complex software products.
At the state level, Belgium is among the top 10 foreign investors in Georgia, Ohio,
Pennsylvania and South Carolina. In Georgia alone, 76 Belgian companies are present,
employing about 5800 people. In Ohio, Belgian-owned companies employ over 6600
people. In Pennsylvania, there are 111 Belgian-owned companies. Even in the remote
corners of Wyoming, the 4th largest foreign company is from Belgium.
Geographically spread over 41 of the 50 U.S. states, operations of Belgian companies are
concentrated in the Southeast, especially in Georgia, Florida and the Carolinas, the

12. Midwest and the New York-New Jersey area. Texas and California are well represented
too.

13. Taxation
Trade and investment between the United States and Belgium will benefit from the new
tax treaty between the two countries, in effect since 2008. Belgium has a very extensive
network of double taxation treaties. Currently, more than 80 double taxation treaties
are in effect, covering the most important jurisdictions.
A new tax treaty between the United States and Belgium went into effect on December
28, 2007. Together with the Notional Interest Deduction and the Patent Income
Deduction, two innovative tax measures presented in more detail elsewhere in this
publication, the treaty makes direct loans and direct investments between the U.S. and
Belgium very attractive.
The Belgium-U.S. tax treaty contains some very interesting tax features for U.S.
companies with business plans in Europe.
 0% withholding tax on dividend payments from a Belgian subsidiary to its
U.S. parent provided the U.S. parent owns 10% or more of the Belgian
company. This 10% ownership threshold is significantly lower than the
threshold in other treaties recently concluded by the U.S. Combined with
other general features of Belgium’s domestic tax system for holding
companies, this is of interest to holding companies for holding the shares
of U.S. affiliates
 The exemption from withholding tax also applies to pension funds,
provided the dividends are not the result of business activities by the
fund
 0 % withholding tax on interest. Together with the Notional Interest
Deduction, this makes direct loans between the U.S. and Belgian
affiliated companies more attractive, and increases possibilities for
companies in Belgium to finance U.S. affiliates.

14.  New categories of taxpayers such as qualified charities or pension trusts
will now be able to claim benefits, and strengthened anti-abuse
provisions designed to deny inappropriate use of the treaty will bring
them into closer conformity with current U.S. treaty policy
 The Convention extends the benefits to companies owned by so-called
“equivalent beneficiaries”, which may provide opportunities for
multinational groups that are based in the EU, Switzerland or NAFTA
Other changes in the new Treaty include a more tax friendly treatment of pension
plan contributions and an extended information exchange provision between tax
administrations.