Belgium, a highly developed market economy, belongs to the Organisation for Economic Co-operation and Development (OECD), a group of leading industrialized democracies. In recent years, with a geographic area of 30,528 km² (ranked 148th in the world), and a population of just over 10 million, Belgium's GDP level has placed it in the top 20 for all countries of the world. In 2004, the per capita income was $29,100.
Densely populated Belgium is located at the heart of one of the world's most highly industrialized regions. The first country to undergo an industrial revolution on the Continent of Europe in the early 1800s, Belgium developed an excellent transportation infrastructure of ports, canals, railways, and highways to integrate its industry with that of its neighbours. One of the founding members of the European Community (EC), Belgium strongly supports deepening the powers of the EC to integrate European economies. Belgium became a first-tier member of the Economic and Monetary Union of the European Union in January 1999.
With exports equivalent to about two-thirds of GNP, Belgium depends heavily on world trade. Belgium exports twice as much per capita as Germany and five times as much as Japan. Belgium's trade advantages are derived from its central geographic location, and a highly skilled, multilingual, and productive work force.
The Belgian industrial sector can be compared to a complex processing machine: It imports raw materials and semi finished goods that are further processed and re-exported. Except for its coal, which is no longer economical to exploit, Belgium has virtually no natural resources. Nonetheless, most traditional industrial sectors are represented in the economy, including steel, textiles, refining, chemicals, food processing, pharmaceuticals, automobiles, electronics, and machinery fabrication. Despite the heavy industrial component, services account for 72.5% of GDP. Agriculture accounts for only 1.4% of the GDP.
Overview
This modern private enterprise economy has capitalized on its central geographic location, highly developed transport network, and diversified industrial and commercial base. Industry is concentrated mainly in the populous Flemish area in the north, around Brussels and in the 2 biggest Walloon cities : Liège and Charleroi. With few natural resources, Belgium must import substantial quantities of raw materials and export a large volume of manufactures, making its economy unusually dependent on the state of world markets. About three-quarters of its trade is with other EU countries. Belgium's public debt fell from 127% of GDP in 1996 to 122% of GDP in 1998 and in 2005, stood at 94.3% of GDP, as the government is trying to control its expenditures to bring the figure more into line with other industrialized countries. Belgium became a charter member of the Economic and Monetary Union (EMU) in January 1999. The dioxin crisis - beginning in June 1999 with the discovery of a cancer-causing substance in animal feed - constituted a serious blow to the food-processing industry, both domestically and internationally. This crisis slowed down GDP growth with recovery expected in the year 2000.
Trade
About 80% of Belgium's trade is with fellow EC member states. Given this high percentage, it seeks to diversify and expand trade opportunities with non-EC countries. Belgium ranks as the 10th-largest market for the export of U.S. goods and services. If goods in transit to other European countries are excluded, Belgium still ranks as the 12th-largest market for U.S. goods.
Bilaterally, there are few points of friction with the U.S. in the trade and economic area. The Belgian authorities are, as a rule, anti-protectionist and try to maintain a hospitable and open trade and investment climate. The U.S. Government focuses its market-opening efforts on the EC Commission and larger EC member states. In addition, the EC Commission negotiates on trade issues for all member states, which, in turn lessens bilateral trade disputes with Belgium.
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