United Kingdom third trading partner in services

© Hollandse Hoogte
In 2017, the United Kingdom was our third trading partner in international services after Germany and the United States. Service trade with these countries increased last year, although more with Germany than with the UK and the US. This is reported by Statistics Netherlands on the basis of newly released figures on international service trade over the year 2017.

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.

Dutch trade in services with three main trading partners
 2017 (billion euros)2016 (billion euros)
Total trade in services:
United States41.941.6
United Kingdom41.539.3
Services imports:
United States24.627.3
United Kingdom19.819
Services exports:
United Kingdom21.720.2
United States17.314.3

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.

Dutch services exports to United Kingdom
 2017 ( billion euros)2016 ( billion euros)
Business services7.76.6
Telecommunication and computer services4.44.5
Transportation services4.34.3
Use of intellectual property (royalties)2.32.3
Leisure and business travel1.11
Industrial services0.60.4
Construction services0.40.3
Financial services0.40.3
Maintenance and repair0.20.2
Personal, cultural and recreational services0.20.2
Insurance services0.10.1
Public sector services00

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.

Dutch services imports from United Kingdom
 2017 ( billion euros)2016 ( billion euros)
Business services9.18.7
Telecommunication services2.72.4
Use of intellectual property (royalties)2.52.9
Transportation services1.81.7
Financial services1.31
Leisure and business travel10.8
Industrial services0.70.6
Construction services0.30.3
Personal, cultural and recreational services0.20.2
Maintenance and repair0.20.2
Insurance services0.10.1
Public sector services00

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.

Share of internationally operating service providers by country, 2016
 Importers of services (%)Exporters of services (%)
United Kingdom925
Other EU countries1423
Non-EU countries412