Netherlands most affected by No-deal Brexit

A hard Brexit means a greater effect on the competitive position of Dutch companies than companies from other European countries. 

However, the initial impact will be greater in the UK than in Europe. Regional disparities will increase and this will mainly affect the pro-Brexit regions in the UK. This is evident from the scientific publication 'The Implications of Brexit for UK and EU Regional Competitiveness', published by the Netherlands Environmental Assessment Agency (PBL) in collaboration with national and international researchers.

In this publication, the PBL looked at the (inter)national competitive position: which branches of industry in which regions in Europe are strengthened in their competitive position by Brexit to what extent and which are weakened? And how sensitive is this effect to the specific agreements with the United Kingdom and hence to the details of an exit agreement? The determining factor in the study is whether the total cost increase for companies in the Netherlands - in connection with trade barriers resulting from a Brexit - is larger or smaller in comparison with that of their (inter)national competitors and how much these consequences change as a result of a different exit agreement.

Agriculture and food industry 

On average, some sectors will suffer greatly from the increase in costs that will occur. Other sectors are strengthening their position. The average level of trade barriers after a Brexit (a so-called hard or soft Brexit) determines the size of the effect. Agriculture and the food industry in particular depend on the details of the exit agreement and therefore benefit from a "good deal", although this may vary for the activity in different Dutch regions.

The economically larger Dutch regions (Zuid-Holland, Noord-Holland and Noord-Brabant) are less affected by a 'hard' Brexit than the economically smaller regions. This is partly because companies in these economically larger regions are less dependent on economic relations with the UK. However, for Zuid-Holland, Noord-Holland and Utrecht in particular, the effects are uncertain. In these regions, the effects of a Brexit are most dependent on the details of the exit agreement. This is due to the specific activity in these regions, which will be affected to a large or small extent by Brexit, depending on the details of the Treaty of Accession and their region-specific dependence on trade relations with the UK. In Europe, the effects of Brexit in Germany and the Czech Republic are relatively insensitive to the details of the exit agreement. This is because the economies in these countries are more interconnected with the UK economy, so there are always effects regardless of the details of the exit agreement. 

Preparing for Brexit

In view of the unique situation of the Brexit, it is important to map out its initial consequences and the uncertainties of these consequences. This will help prepare the Dutch government and the most sensitive industries and regions. The Netherlands can also involve the specific competitive position of Dutch industry in follow-up negotiations on the future economic relationship with the UK.

Read the full paper here