Region/Countries: Benelux Countries, Europe Industry: Other Date: January 2020

Why this is important to Wisconsin businesses: The center of gravity for Europe's economy is expected to shift eastward.

Brexit is officially in effect. Although a hard Brexit has been averted (for now), there is still uncertainty on how it will play out. How does a small country like the Netherlands, which is dependent on trade, view Brexit and deal with its uncertainties?

The Dutch see Brexit not only as a threat but as an opportunity. Stan de Caluwe, senior supply chain manager at the Holland International Distribution Council (HIDC), says that as the center of gravity in Europe shifts eastwards post-Brexit, demand for storage and distribution capacity in the Netherlands, western Germany and Belgium will increase. He expects that “the main entry points will still be in the west of Europe,” especially via the Port of Rotterdam and Amsterdam Schiphol Airport. The financial technology, health and life sciences sectors are especially interested in moving their operations. “Many have licensing issues if they aren’t located in the European Union when Brexit happens,” he added, “so those companies are in a hurry.”

Supply chains between the UK and the European mainland will be affected soon. Even with a new trade deal between the UK and the EU, there will be non-tariff barriers driving costs and adding lead times. In case of a delayed no-deal Brexit, companies will also be met by tariff barriers, raising the costs and difficulty of operating from the UK as a frontier to mainland Europe.

De Caluwe added: “We already helped many U.S. companies that have chosen to move all or part of their stock from the British island. Setting that up is a matter of finding the right [third-party logistics] and a fiscal representative and you’re set—and that’s exactly what we do.” The number of requests HIDC has received from U.S. companies has almost doubled in the past two years, from 72 in 2017 to 135 last year, showcasing the growth of interest in the Netherlands as a new forward base for the European mainland.