According to a new study by the bank BNP Paribas Fortis, in many product categories Belgian exports to other EU member states are noticeably weaker than those to non-EU countries. The bank says that Belgian exports have an untapped growth potential of more than 10 billion euro.
Although the majority of Belgian exports already go to the EU, the BNP Paribas Fortis has found that single market is not functioning optimally. National regulations and cultural differences continue to hinder trade between EU member states.
The International Monetary Fund (IMF) estimates that obstacles of this nature amount to the equivalent of an intra-European trade tariff of 45%. The European Central Bank (ECB) puts this even higher at 65%.
12.44 billion US dollar gap
BNP Paribas Fortis has developed a tool that calculates the size of the export gap per product category and destination country. The overall gap is estimated at 12.44 billion US dollar. This is more than 10 billion euro. The study that was presented on Wednesday, based its conclussions on a comparison between Belgium’s overall export market share outside the EU and its export share to individual EU countries by product category. Given shorter distances, shared languages and a common currency, Belgium’s export performance within the EU should at least match exports outside the EU. In practice, however, exports to certain countries or in certain sectors fall well short of the benchmark.
Arne Maes is senior economist at BNP Paribas Fortis. He told the press agency Belga that "We found that Belgium has low market shares in economic heavyweight countries such as Germany, Spain and Italy in sectors such as organic chemistry, pharmaceuticals and specialised metals. Belgian exporters also score remarkably poorly in the Netherlands, Poland and Slovenia."
BNP Paribas Fortis plans to give its customers access to detailed data showing where additional growth could be achieved. Arne Maes acknowledges that the insights offered in the report will not remove cultural barriers. However, he believes that companies could weaken existing brand loyalty through targeted marketing or by promoting innovation. He also called for a Belgian intra-European trade mission.