BRUSSELS — The European Union’s club of free-trading nations is about to lose a founding member.
With radical-right politician Geert Wilders forging a new Dutch coalition that includes the protectionist Farmer-Citizen Movement (BBB), The Hague’s support for free trade could soon give way to a policy stance that looks a lot like French-style strategic autonomy.
French officials are rubbing their hands at the prospect of recruiting the Netherlands as an ally in their campaign to buttress the bloc’s trade defenses, and thereby dealing a blow to its dwindling band of free traders. Sweden and Finland recently called on the EU to regain its trade mojo.
“Over the past few years, the Dutch positions on trade files have progressively evolved towards the French ones, especially when it comes to economic security. With the new government, this dynamic could even accelerate,” said one French official, granted anonymity as they were not authorized to speak publicly about politics in another country.
Within the EU, France has pioneered a defensive trade playbook that emphasizes protecting domestic champions against competitors from China and the U.S. In particular, Paris insists that Europe must not be undercut by rivals from nations with laxer environmental and labor standards — a call that increasingly resonates in other European capitals.
“The Netherlands might be the canary in the European coal mine here,” said senior researcher Rem Korteweg of Clingendael, a think tank based in The Hague. He sees the turn from free-trade to French-style industrial policy as the writing on the wall for the 27-nation bloc.
Not that the two countries’ economies are that similar.
French gross domestic product, at nearly €3 trillion last year, is three times that of the Netherlands. While France runs a structural trade deficit, however, the more open Dutch economy is in surplus. And despite having a militant farmers’ party in cabinet, the Netherlands is also the EU’s top food exporter — and second in the world behind the U.S.
Weaponizing trade
The trade shift in the Netherlands began under outgoing Prime Minister Mark Rutte.
The liberal leader said repeatedly that his country was converting to the French doctrine of strategic autonomy, such as by making access to the EU market contingent on environmental action by trade partners, or by erecting more barriers to protect sensitive tech from being snatched up by geopolitical rivals such as China and Russia.
Just last year, under pressure from Washington, Rutte restricted exports by Dutch chip-machine maker ASML to China, making the country a test case for the EU’s broader push to strengthen its economic security.
This new affinity for industrial strategy was also on display last year when French President Emmanuel Macron visited the Netherlands.
“This new coalition is not the trend setter,” Korteweg said. “Already since 2017 a fresh wind has been blowing, when the Netherlands started to see the limits of laissez-faire trade policy where the market can do whatever it wants.”
That’s enough to let Paris claim victory in its push for more robust trade defenses to face Asian and U.S. rivals.
“We have managed to make those who are always presented as the center of liberalism, understand the need for a stronger, more assertive trade policy that defends our interests more vigorously,” said MEP Marie-Pierre Vedrenne, a trade specialist from Macron’s Renew group.
Farmer protests and greater public skepticism toward trade played their part in the Dutch shift, she said, while stressing that neither France nor the Netherlands are turning to protectionism given the importance of trade to their economic prosperity.
Farmer pressure
With their new government, the Dutch are likely to complete their volte face.
The BBB, for instance, was catapulted to power by a rural protest movement that first shook the Netherlands in 2019 — and then spread across Europe, including France.
Even the likely appointment of former spy chief Dick Schoof as prime minister is telling. One of his former colleagues was quoted by Het Financieele Dagblad as saying the choice of Schoof confirms the Dutch “opportunistic trader’s mentality” has reached an end, and that issues such as security, law and order are now higher on the political agenda.
Shepherded by Schoof — who has no party affiliation — the BBB and Wilders’ far-right PVV will be joined by two center-right parties, Rutte’s liberal VVD and the centrist New Social Contract.
Despite paying little attention to trade, the 26-page draft coalition agreement affords Paris reason for optimism: Given that it only elucidates hoofdlijnen (key points), much will be left up to individual ministers. A consensus exists across the political spectrum, however, to focus on security rather than openness.
Compared with other priorities, such as domestic security and migration, the coalition pact dedicates only a few lines to trade under a section on “international security” — in which trade policy is acknowledged as a means to shield markets and intellectual property from geopolitical rivals.
In a wink to Paris, the document stresses the need to “reduce strategic dependencies.” (France has been leading a call to reshore strategic production and make the EU more autonomous.)
The draft document also makes no reference to concluding more trade deals.
Trade agreements should ensure that trading partners respect the same standards, the document reads, a nod to the “mirror clauses” that Macron sees as a prerequisite for the conclusion of any trade agreements, such as with the Mercosur group of South American countries.
“Mirror clauses are plentiful nowadays, with one [member state] pushing them behind our backs,” a European diplomat said in reference to France.
In the same vein, the Dutch parliament has for years threatened to block the deal with Mercosur — whose members include Brazil, Argentina, Uruguay and Paraguay — on the grounds it poses “fundamental risks” to Dutch farmers.
Back when liberal former Finance Minister Sigrid Kaag was still covering foreign trade, she said the agreement would need to be “updated.”
Now Paris believes the Netherlands could be an ally on that front.
“We and the Spanish used to be isolated on mirror clauses,” French MEP and cattle farmer Jérémy Decercle said at a recent European election debate in Paris.
Now, however, “in the Netherlands and Austria we see that there are people who want to make things evolve in agriculture,” added Decercle, who is running again for Renew. He suggested France could team up with the Netherlands to ensure that agriculture production is better protected in free-trade deals.
But this new-found convergence on trade files doesn’t mean the two countries will agree on everything — quite the contrary.
“The French and Dutch positions could increasingly diverge on the other traditional point of friction: EU spending and joint borrowing,” said the same French official.
Giorgio Leali reported from Paris. Camille Gijs and Koen Verhelst reported from Brussels. Judith Chetrit contributed reporting from Paris.