The chances of the European Union and the UK reaching a free trade treaty are high for now. But even such a 'soft' Brexit will cost the Dutch economy over €4.5 billion compared to 2019. Moreover, 17,000 jobs will be lost.
ABN AMRO expects. The total economic damage is 0.7 per cent of GDP, due to the additional trade barriers that will be created by the Brexit, such as border controls, customs queues and extra administration. These barriers will have a negative impact on demand in the coming years.
With a 'hard' Brexit - a departure without a free trade treaty - the damage is greater. Partly due to import tariffs, a hard Brexit will cost the Dutch economy €17.5 billion and 70,000 jobs. So, according to ABN AMRO, Dutch business has a lot to gain from a successful outcome of the Brexit negotiations.
Direct and indirect damage
The Netherlands is relatively hard hit by the Brexit because the UK is a major trading partner. Exporters of machinery, chemicals and food do a lot of business with British customers and are therefore directly affected. Other companies are also indirectly affected because they are strongly intertwined with foreign companies. For example, if UK demand for cars and machinery from Germany falls, Dutch suppliers are also affected. The service sector is also indirectly affected, as it is intertwined with trade in products. Think, for instance, of accounting and legal services.
Read also: 'Avoid chaos at Brexit'
Opportunities
ABN AMRO expects the Brexit - in whatever form - to slow the economic recovery after the corona crisis. Nevertheless, there are a number of factors that are hopeful, says Sonny Duijn, Sector Economist Themes at ABN AMRO. "A Dutch company competing with British industry peers for market share on the European mainland, for example, can significantly improve its position. The Brexit also provides direct employment, for example for service providers. For example, border controls can lead to legal claims if merchandise spoils due to delays. For the coming weeks - if not already affected - some practical preparations for businesses are very important, especially as the end of the transition period approaches."
