In the wake of Brexit, what will the consequences be on the British-

Dutch trade relation? Analyse critically, in accordance with relevant

examples of reactions of businesses involved with British-Dutch
trade.

In this essay the objective is to identify what sort of effect Brexit has on a trade relation that has existed
for over four hundred years. In order to advance to a conclusion on this issue, the recent events and
actions of both the government of the UK and the Netherlands related to Brexit will be analysed.
Alongside that a thorough investigation on what the reactions of businesses closely involved with trade
between the two aforementioned kingdoms will be performed. The trade relation between the two
countries is an important one for both, as they reside in each other’s top three of trading partners. In
addition, there are several companies, multinationals even, with roots in the UK as well as in the
Netherlands. The reaction of the Netherlands to Brexit, can hence be regarded as one of the most relevant
for the UK as a trading nation. In the process of conducting this essay multiple information will be
collected from a variety of sources, such as government statements from the British and the Dutch
government, extensive reports concentrating on the matter at hand and various relevant newspaper
articles. The facets that will be touched upon in this essay are the following: British government actions
with regards to Brexit, Dutch government response and actions to Brexit and finally reactions of
businesses that are tightly involved in trade between the United Kingdom and the Netherlands.
Firstly, the response of the British government towards Brexit will be scrutinised. The initial response
of the coalition government consisting of the Conservative party and the Liberal Democrats was one of
complete shock and chaos. The first thing that occurred was the resignation of the sitting Prime Minister
David Cameron, who was in favour of Britain remaining inside the European Union. As he announced
his resignation he stated that the British people made it clear that they want to go down a different path
with the country than he, and that he therefore will step down in order for fresh leadership to replace
him (BBC, 2016). Following those events, Theresa May succeeded David Cameron as prime minister
and developed strategies in order to negotiate a Brexit deal that she and her government believed would
be best suited to support the British economy. Over the course of the last two years there have been
ongoing negotiations about a Brexit deal between the EU and the UK. As it now seems the most likely
scenario that can occur is a deal in which there is a still a so called free trade area for goods, which will
remain as the UK will in turn become a rule-taker to EU regulations (Barker, 2018). This would mean
that the UK will live up to EU set regulations, without being able to cast a vote on those regulations or
be on the negotiations table when they are being set. Furthermore it is most likely that “a backstop to
the backstop” will be agreed on in the new deal. According to Stewart & Quinn (2018) this would mean
that Northern Ireland would remain within the EU customs union, whilst the rest of the UK (Scotland,
Wales, England) would leave said customs union. This scenario was conducted in order to prevent a
hard border from happening at the Irish border. That border would in this scenario be located in the Irish
sea, which is something with which many parties, in particular the Northern Irish party DUP, have major
issues. None of these measures are certain as of yet, but these are the regulations with which the UK
government aims to contribute to the British economy and more specifically the trade relation between
the UK and the continent (Stewart & Quinn, 2018).
The Dutch government its initial response to Brexit was one of shock and disbelief. After the first
amazement washed away worries remained, as the UK is one of the biggest trade partners of Dutch
businesses. The government responded to the Brexit issue, after a new coalition was formed at the end
of 2017, by deciding to focus on opportunities rather than problems whilst still aiming to take these
problems into account and solve them eventually. For instance in the government agreement it was
decided that the tax on profit would be decreased form 25% to 21% in order to be more competitive
with the UK. Furthermore, the tax on dividends would be discarded altogether, where it used to be 15%.
The discarding of the dividends tax would cost the government an amount of 2 billion euros worth of
taxes (Leijten, 2018). Both of these actions were taken in order to stimulate the Dutch business climate,
in order for that to be more attractive to businesses active in both countries to settle in the Netherlands
instead of Great Britain. Furthermore, the Dutch government hired over a 1000 additional customs
employees in order to keep trade on a functional level, if a no-deal Brexit would occur (Stone, 2018).
Most importantly the Dutch government wanted to remain friendly to the UK as a trade partner, as the
trading ties would still be tight between the two countries. The Dutch government aimed to strengthen
the relationship with the UK by requesting a state visit of a trade delegation headed by the Dutch King
and Queen to the British royals. This visit occurred in October of the year 2018 and was characterised
by the dense amount of pleasantries that were shared between the two royal families, on each other’s
respective business environments, the freedom of speech and the special relationship the two countries
have had since centuries back.

There will, however, not only be a focus on the reaction of governments to Brexit, scrutiny will also be
shifted to the reaction of businesses involved in trade between the aforementioned countries. A company
of high interest in this particular case is Unilever. Unilever is very much a relevant company to the
subject of Brexit and the response of the Netherlands to Brexit. This is because of the fact that the
company has close a relation to both of the countries and is headquartered in both. Therefore it is
intriguing to analyse what Unilevers’ actions are regarding Brexit. In March of this year Unilever
announced that the company would scrap its duality structure and is of the intention to base its
headquarters solely in Rotterdam, the Netherlands. Whereas it was previously headquartered in both
Rotterdam and London (Kollewe, 2018). According to Kollewe (2018) the CEO of the company, Paul
Polman, denied that this move had anything to do with Brexit. Nevertheless many experts argued that
the move materialised partly because of the wish of Unilever to simplify its company structure, partly
because of the fact that the company wanted to be located within the European Union to have certainty
of free trade and movement of most its products from the headquarters and partly because of the
measures that the Dutch government had put into work. In particular the measurement of discarding the
taxation on dividends was explained to be particularly beneficial for Unilever, as it is a Dutch company
with a high amount of foreign shareholders who, because of the discarding of the dividends tax, did not
have to pay over their earnings from dividends. Something that they are obliged to do in the British tax
system. Nevertheless, Unilever decided to, after months of negotiations and meetings between
shareholders and the board of directors, not transfer to Rotterdam as a sole headquarters. The main
argument that was expressed by the shareholders was that the company would not be able to act in the
interest of the British customer, which still is one of the most important groups of customers for an
Anglo-Dutch company (Baynes, 2018).
In conclusion, there are various approaches that are performed when reacting to Brexit. The British
government, Dutch government and the example company Unilever all have different approaches to
Brexit, which are explained in the respective sections of this report devoted to these subjects. However,
there is a clear similarity between the different approaches. That similarity is uncertainty. Not one of the
different organisations that were covered in this essay are one hundred percent certain that what they
are doing in order to get through Brexit is the best approach. At best, the implementation of the different
bodies’ plans are an educated guess, at worst an uneducated one. In order to espouse this illation one
can, for example, observe the process of the British government trying to conduct a coherent Brexit deal
with which everyone in the cabinet, never mind the rest of the public, is satisfied. It seems to be a never-
ending story. That process displays how many different opinions and approaches there are to be
considered regarding this immensely complex case. At this moment in time, due to the uncertainty of
all parties involved, it is a sheer impossibility to indicate one superior method of approach.
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Barker, A., 2018. The soft-Brexit Chequers deal: what it means. Financial Times, 9 July.
Baynes, C., 2018. Unilever: UK's third biggest company scraps plans to move HQ from London to
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Leijten, J., 2018. Dividend Tax Definitively not Scrapped. NRC, 15 Oktober.
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Stone, J., 2018. Dutch government hires nearly 1,000 customs officials to prepare for 'no deal' Brexit.
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