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Belgium's public sector is a net external lebtor, but the net foreign assets of the private sector probably push the country into a net creditor position. Only 15.4 percent of the Belgian Government's overall debt is owed to foreign creditors. Moody's Aal rating of the country's bond issues in foreign currency fully reflects Belgium's integrated position in the Ec, its significant improvements in fiscal and external balances over the past few years, as well as the slowdown in external debt growth. The Belgian government does not experience any problems in obtaining new loans on the local credit market. The three latest government loans were oversubscribed. Due to the reform of monetary policy in January 1991, direct financing in Belgian francs obtained from the National Bank of Belgium (NBB) has become almost impossible. The Treasury retains only a BF 15 billion credit facility with the NBB for day-to-day cash management purposes. The contracting of foreign currency loans has also been restricted since then. Such borrowing is possible only in consultation with the NBB, which ensures that these loans do not compromise the effectiveness of the exchange rate policy.
As a member of the G-10 group of leading financial nations, Belgium participates actively in the IMF, the World Bank and the Paris Club. Belgium is a leading donor nation, and it closely follows development and debt issues, particularly with respect to Zaire and other African nations.
In January 1993, when the EC's internal market will be integrated, Belgium will have harmonized most, if not all, of its trade rules in both commodity and services sectors with those of the other eleven EC member countries. Thus, the potential for U.S. exporters to take advantage of the vastly expanded EC market through investments or sales in Belgium should grow significantly.
Some Belgian barriers to services and commodity trade still exist, however, including:
Military Offset Programs : Belgian military investment programs frequently contain offset clauses, whereby a certain amount of the contract needs to be performed in Belgium, either directly (i.e., direct compensation on the sale) or indirectly (i.e., by giving Belgian subcontracters a share of unrelated contracts). The offset programs are complicated because of the required regional breakdowns: 53 percent must go to Flanders, 38 percent to Wallonia and nine percent to Brussels. As a consequence, many U.S. defense companies have steered clear of the Belgian defense market.
Telecommunications: Foreign suppliers of telecom equipment have encountered difficulties in gaining access to the Belgian market, especially when they do not have production facilities in the country. However, U.S. suppliers should benefit from the EC directive to liberalize public procurement in excluded sectors, one of which is
telecommunications. Further opportunities for u.s. business may also come from the opening up of the terminal equipment market and the splitting of the Belgian telecom company RTT into a commercial branch, Belgacom, and a standard setting and approval body, BIPT. Value-added and information services may also be opened to competition from the private sector. However, invisible barriers of entry are likely to persist (e.g., technical specifications tailored to those of the national champions, long and expensive approval procedures and market segments reserved for the RTT).
Broadcasting and Motion Pictures: Belgium voted against the EC broadcasting directive (which required high percentages of "domestic" programs) because its provisions were not, in the country's view, strong enough to protect the fledgling film industry in Flanders. The Flemish (Dutch-speaking) region and Walloon (French-speaking) community of Belgium have local content broadcasting requirements for private television stations operating in those areas. The EC has taken the Walloon community to the European Court of Justice concerning these requirements.
Distributors of U.S. films in Belgium, as well as distributors of other films, are required by a Belgian court ruling to supply copies of a new film to small theaters for release within a few weeks of the showing of the film by large theaters. While this practice does not discriminate against U.S. producers, it does increase their costs by requiring that they make and supply additional prints.
Barriers to legal services: Starting in the early 1970s, Belgium applied a numerical limit on the number of U.s. legal consultants that were allowed to apply for a professional card and work in Belgium. With the increase in the number of U.S. legal firms in Belgium, the number of U.s. lawyers with a professional card was approaching the limit by the end of the 1980s. The government lifted the limit in October, 1990. A government review of the qualitative restrictions on the activities of foreign legal consultants is being considered.
There are no direct export subsidies offered by the Government of Belgium to industrial and commercial entities in the country. However, both the Wallonia and Brussels regions recently granted subsidies to several civilian industries in their areas, especially in the aerospace sector. At least some of the subsidized production will go into Airbus airplanes sold on the international market. In addition, the government does conduct an active program of trade promotion. The social expenditure break (reduction of social security contributions by employers, generous rules for cyclical layoffs) offered to companies by the government, and the ade promotion activity may come close to the definition of a subsidy in the case of a company engaged in exporting.
Protection of U.S. Intellectual Property
The Government of Belgium is keenly interested in
intellectual property protection and actively follows the subject in the Uruguay Round negotiations. Some Belgian firms, especially textile capital equipment manufacturers, have seen their own research and development efforts pirated and are therefore eager to improve standards of protection.
Belgium is party to the major intellectual property agreements, including the Paris, Berne and Universal Copyright Conventions, and the Patent Cooperation Treaty.
Copyrights: The Belgian Copyright Law, passed in 1886, provides insufficient or outdated penalties for copyright infringement. Some authors and editors claim that many copies are made each year from legally protected works. Specific copyright or patent protection for computer software does not yet exist. The EC Commission has passed a directive protecting computer software, and Belgium is required to implement it by January 1, 1993. Even though the EC directive does not offer as much intellectual property protection as in the case of U.S. law, it does increase protection. Belgium supports the U.S. Government's position regarding the maximum protection of computer software, including the prohibition on reverse engineering.
Patents: A Belgian patent can be obtained for a maximum period of twenty years and is issued only after the performance of a novelty examination.
Trademarks: The Benelux Convention on Trademarks, signed in Brussels in 1962, established a joint process for the registration of trademarks for Belgium, Luxembourg, and the Netherlands. Product trademarks are available from the Benelux Trademark Office in The Hague. This trademark protection is valid for ten years, renewable for successive ten-year periods. The Benelux Office of Designs and Models will grant registration of industrial designs for 50 years of protection. International deposit of industrial designs under the auspices of the World Intellectual Property Organization (WIPO) is also possible.
Workers have the right to associate freely and to strike. With 70 percent of its labor force organized, Belgium is one of the most unionized countries in the world and has a long tradition of democratic trade union elections. Labor unions striking or protesting government policies are free from harassment and persecution.
Labor unions are strong and independent of the Government but have important informal links with and influence on many of the major political parties. Unions in Belgium are affiliated with the major international bodies representing labor, such as the International Confederation of Free Trade Unions and the World Confederation of Labor.
b. Right to Organize and Bargain Collectively
The right to organize and bargain collectively is recognized and exercised freely. The right to due process and judicial review are guaranteed for all protected activity. Effective mechanisms exist for adjudicating disputes between labor and management.
c. Prohibition of Forced or Compulsory Labor
Forced or compulsory labor is prohibited by law and does not occur in Belgium.
d. Minimum Age of Employment of Children
The minimum age for employment of children is 14, but there is compulsory schooling until the age of 18. New legislation has been submitted tightening conditions of child labor in show business and related occupations. The labor courts effectively monitor compliance with national laws and standards.
Belgian working hours, mandated by law and through collective bargaining agreements, are among the shortest in Europe. A forty hour week is mandated by law, although many collective agreements call for work weeks of between 36 and 39 hours. There are legal minimum wage rates which are set in periodic negotiations for both public and private sector employees. By law, workers in the private sector receive at least four weeks of vacation per year and an annual bonus equal to approximately 14 per cent of their annual wage. Unemployment benefits are also guaranteed. Health and safety legislation exists, supplemented by collective bargaining agreements. Health and safety committees are mandated by law in companies with more than 50 employees. Government policies to promote employment and an extensive system of unemployment compensation and other social benefits have served to minimize serious individual hardship.
U.S. capital is invested in many sectors in Belgium. Worker rights in these sectors do not differ from those in other areas. Worker rights are practiced and observed uniformly throughout the country.