United Kingdom third trading partner in services

International service trade refers to both exports (Dutch enterprises supplying services to foreign countries) and imports (foreign enterprises supplying services to the Netherlands). In 2017, Dutch service exports to the UK amounted to 21.7 billion euros, versus 19.8 billion euros in services imports from the UK. As a result, the trade surplus stood at 1.9 billion euros.

Both service exports to the UK and service imports from the UK increased relative to 2016, by 7 and 4 percent respectively. Service trade with Germany grew at a faster pace (exports by 9 percent and imports by 15 percent). As a result, Germany surpassed the UK on the list of largest trading partners in 2017. Germany also overtook the US (now second), our main trading partner in 2016.

Sharp rise in exports of business services

The main services exported from the Netherlands to the UK are business services. This is also the category with the strongest growth: from 6.6 billion euros in 2016 to 7.7 billion euros in 2017. Exports of advertising, market research and opinion polls rose in particular (to 386 million euros). Another increase was seen in service activities related to oil and gas extraction (e.g. oil rig maintenance and repair work), business and management consulting, public relations and legal services.

Furthermore, the Netherlands exports a large number of telecommunications and computer services (slight decrease) and transport services (remained the same) to the UK. Charges for the use of intellectual property amounted to 2.3 billion euros, almost equivalent to last year’s amount.

Imports of business services also high

Business services are not only the most exported but also the most imported services in trade with the UK. In 2017, the import value stood at 9.1 billion euros (versus 8.7 billion euros in 2016). Within the category of business services, growth can in part be attributed to trade-related services such as international trade intermediaries (ITIs, 200 million euros).

Following business services at great distance are imports of telecommunication and computer services (2.7 billion euros) and the use of intellectual property (2.5 billion euros). Imports of computer services were up sharply on 2016, despite far lower charges for licences to reproduce or distribute audiovisual services or franchises.

Trade in services with relatively few companies

The number of Dutch companies trading with the UK is limited in relation to the value of trade between the two countries. For example, only 9 percent of service importers purchase services from the UK. A much higher share of enterprises import from Ireland (56 percent), Germany (34 percent) or Belgium (29 percent). The large number of enterprises importing from Ireland is related to the purchase of inexpensive advertising space from large enterprises in that country.

One-quarter of service exporters sell services to the UK. This share is much lower than to Belgium (51 percent) or Germany (44 percent), but higher than to all other major EU countries.