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LITHUANIA

b. The Right to Organize and Bargain Collectively

Under Soviet law, Lithuanian workers did not have the right to organize outside the official trade union system and free collective bargaining did not exist in practice. Lithuanian legislation since the coup confirms the right to organize and bargain collectively, but plant level bargaining is only in its infancy. Since the economy is still predominantly in the hands of the state, the unions seek redress at the political level.

c. Prohibition of Forced or Compulsory Labor

Compulsory labor was a feature of Soviet-administered prisons in Lithuania; it has since been banned.

d.

Minimum Age for Employment of Children

The Government has retained the minimim age for employment of children at 16 and it has added one year to compulsory education, bringing it to twelve years of schooling. Lithuanian authorities enforce minimum-age and compulsory-education laws through a system of inspections.

Acceptable Conditions of Work

e.

Labor conditions in Lithuania were similar to, but sometimes better than, those in the Soviet Union. According to known Soviet statistics, wages in all categories of workers in Lithuania were above the Soviet average. By law, white-collar workers enjoy a 40-hour workweek; blue-collar staff, a 48-hour workweek with premium pay for overtime.

Soviet and Lithuanian laws establish minimum health and safety standards for the workplace. However, worker complaints indicate that these standards seem frequently to be ignored.

Extent of U.S. Investment in Goods Producing Sectors

No sector by sector data is available on U.S. investment in Lithuania.

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Exports (FOB)
Exports to U.S.
Imports (CIF)
Imports from U.S.
Aid from U.S.
Aid from other countries
External Public Debt
Annual Debt Service
Payments
Gold and Foreign Exchange
Reserves (end of period)
B.O.P. Current Account
(transactions, billions)

19,975

20,913

22,869

59,781

17.7

54,934

19.5

57,193

20.0 l/

THE NETHERLANDS

Sources: Central Bureau of Statistics (CBS), Netherlands Central Bank (NB), Central Planning Bureau (CPB) 1/ Estimated. 27 Yield on T-bonds with longest residual maturity. 37 Personal plus business savings. 4/ Data available as of November 1, 1991 in millions of guilders unless otherwise indicated. 5/ 3-month interbank rate

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The Netherlands has an advanced industrial economy with four-decades of prosperity behind it. Its major economic assets are a skilled, highly productive work force, substantial reserves of natural gas and its geographic location in Northwest Europe at the mouth of the Rhine River. The Dutch are beneficiaries and supporters of the free trade principle, a philosophy which they defend in international fora like the GATT. The Netherlands is a member of the European Community and expects to benefit from the EC's efforts to build a single market by 1992. With Germany as their largest trading partner, the Dutch also expect to gain from the German reunification.

The Dutch economy grew by 3.5 percent in 1990. However, the rate of growth is expected to decline to two percent in 1991 and to a little over one percent in 1992. In an attempt to mitigate the effects of slower growth on its budget reduction program and to ensure that public sector budget reduction objectives are met, the government proposed a package of budget cuts and revenue increases. The restrictive 1992 central government budget is expected to further dampen investment and reduce consumer spending. Exports are forecast to keep pace with world trade growth despite an anticipated slowdown of the German economy. Any economic growth this year and next will therefore primarily be led by the foreign sector.

A government induced inflation flare-up (higher fuel prices and rents) is expected to boost the consumer price rise in 1991 to 3.75 percent from 2.5 percent in 1990. A growing merchandise trade surplus continues to push the current account surplus to over 4 percent of GNP in 1992.

Dutch fiscal policy for 1992 is basically restrictive. The government hopes to reduce the budget deficit to 4.75 percent of Net National Income (NNI) in 1991 and thereafter by 0.5 percentage points annually, eventually reaching its target of 3.25 percent of NNI by 1994. The draft 1992 budget provides for budget neutral income tax measures and a small revenue raising hike in indirect taxes. A tax reform plan to reduce income tax rates and simplify the Dutch tax system is currently awaiting parliamentary approval.

Dutch monetary policy is aimed at maintaining the stability of the exchange rate of the guilder vis-a-vis the German mark through appropriate adjustments in short-term interest rates and money supply. The Netherlands Central Bank (NB) exerts control over money market rates by varying the

THE NETHERLANDS

terms of the banking community's access to NB financing.

The NB's peg to the German mark is expected to remain unchanged, given the importance of maintaining the competitiveness of Dutch exports to Germany. Under the circumstances the interest rate differentials between Dutch and German capital market rates will also continue. Dutch short term rates are forecast to average 9.25 percent, with the yield on treasury bonds hovering around 8.8 percent.

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The Dutch guilder is linked to the German mark in the European Monetary System. There is a single exchange rate. While residents of the Netherlands must obtain an exchange license for certain large international financial transactions, in practice these licenses are granted routinely and thus there is no exchange control.

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Almost all purchasing decisions are made on the basis of non-discriminatory commercial criteria. Most government procurement is done in compliance with the GATT Government procurement code. The Netherlands has no discriminatory export or import policies with the exception of those resulting from its membership in the European Economic Community.

Increased momentum toward the European Community's goal of a unified internal market in 1992 has caught the attention of growing numbers of U.S. exporters eager to take advantage of Holland's position and experience as a distribution center for Europe. It has also sparked a wave of interest in investment in Holland as non-EC firms seek to get a foothold in the EC.

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The Netherlands is a major creditor nation, with a current account surplus expected to reach $10.5 billion in 1991. The country has no significant external debt. The Netherlands is a participant in and a strong supporter of the IMF, IBRD, and other multilateral international financial institutions.

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The Dutch economy is one of the most internationallyoriented in the world. The Netherlands is the sixth largest U.S. export market in the world, as well as the one with which the United States has its largest bilateral trade surplus, 8 billion dollars in 1990, with a 15 percent gain in U.S. exports. The Netherlands is the third largest direct investor in the United States, behind the United Kingdom and Japan. Dutch investment in the United States in 1990 reached over $64 billion, with U.S. direct investment in the Netherlands valued THE NETHERLANDS

at about $23 billion (historical-cost).

Most trade barriers that do exist result from common EC policies. Some areas of concern for U.S. exporters to the Netherlands are:

Price Restrictions: In 1991 the Dutch Ministry of Health began to limit the amount it reimburses a patient for any particular prescription drug to a sum based on an average price of therapeutically similar drugs (clustering). This legislation could undermine the benefits of pharmaceutical patent protection and discourage research-based companies from investing in the Netherlands.

Broadcasting and Media Legislation: Amendments to the Dutch Media Act relating to admitting local and foreign commercial broadcasting stations into the Netherlands are now before the first chamber of Parliament and are expected to become effective in early 1992. Draft legislation translating the EC Broadcast Directive into the Dutch Media Act is still under preparation. Article 6 of the EC directive is of particular importance to the United States since it requires that 50 percent of program content be of EC origin.

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The Netherlands practices no preferential or discriminatory export or import policies with the exception of those which result from its membership in the European Economic Community.

7.

Protection of U.S. Intellectual Property

Intellectual Property Protection: The Netherlands belongs to the World Intellectual Property Organization (WIPO), is a signatory of the Paris Convention for the Protection of Industrial Property, and conforms to accepted international practice for protection of technology and trademarks. Patents for foreign investors are granted retroactively to the date of original filing in the home country, provided the application is made though a Dutch patent lawyer within one year of the original filing date. Patents are valid for 20 years. Legal procedures exist for compulsory licensing if the patent is determined to be inadequately used after a period of three years, but these procedures have rarely been invoked. Since the Netherlands and the U.S. are both parties to the Patent Cooperation Treaty (PCT) of 1970, patent rights in the Netherlands may be obtained if the PCT application is used.

The enforcement of anti-piracy laws remains a concern to U.S. producers of software, audio and video tapes, and textbooks. The Dutch government has recognized the problems in protecting intellectual property and has proposed legislation to revise the Dutch copyright law to introduce higher penalties for copyright infringement.

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