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                     Key Economic Indicators

     (Billions of Belgian francs (BF) unless otherwise noted)
              (all figures end-of-year unless noted)

                                  1991      1992      1993 est.
Income, Production,
 and Employment

Real GNP (Billion 1985 francs)    5,785     5,884     5,978  
Real GDP growth rate (pct.)        1.9       0.8      -1.5
GNP at current prices             6,855     7,032     7,144
Real GDP by Sector 
 Agriculture                        131       n/a       n/a
 Industry                         1,479       n/a       n/a
 Construction                       409       n/a       n/a
 Services                         5,626       n/a       n/a
Real Per Capita Income (BF)       673,074   701,656   712,831
Size of Labor Force (1,000s)      4,210     4,236     4,261
Unemployment Rate (pct.)           7.5       8.2       9.5

Money and Prices

Money Supply (M1)                 1,334     1,316       n/a  
Tender Rate (pct.)                 9.0       9.2       9.6 
3-month Treas. Bill Rate (pct.)    9.4       9.4       8.4
L-T Govt. Bond Yield (pct.)        9.3       8.8       8.4 
Govt. Deficit as pct. of GNP      -6.7      -6.9      -6.6
Savings Rate (pct. of GNP)        21.4      21.6      20.9 
Investment Rate (pct.of GNP)      19.7      19.8      19.0 
Consumer Price Index (pct.)        3.2       2.4       2.8
Wholesale Price Index (pct.)      -1.1       0.2       0.7
Exchange Rate BF/$ (avg.)         34.18     32.12     33.88

Balance of Payments and Trade

Total Exports FOB                 4,023     3,967     4,030
 Exports to U.S.                    151       153       n/a
Total Imports CIF                 4,116     4,023     4,071
 Imports from U.S.                  197       176       n/a
Aid from U.S.                         0         0         0
External Public Debt              1,107     1,010     1,022
Annual External Debt Service        244.7     193.5     189.3
Total Public Debt                 7,750.9   8,288.7   8,760.2
Overall Debt Service Payments       617.9     678.6     692.6
Gold and Forex Reserves             784.5     710.5     717.5
Current Account Surplus             156       210       165
 Trade Balance with U.S.            -46       -23       n/a

1.  General Policy Framework

    Belgium, a highly developed market economy, belongs to the
OECD group of leading industrialized democracies.  With exports
and imports each equivalent to about 60 percent of GDP, it
depends heavily on world trade.  Belgium ranked as the
ninth-largest trading nation in absolute terms in 1992.  About
75 percent of its trade takes place with other European Union
(EU) members, and another 6 percent with European Free Trade
Area (EFTA) countries.  Belgium's service sector (including the
public sector) accounts for 65 percent of GDP, compared with 33
percent for industry and two percent for agriculture.  Belgium
imports many basic or intermediate goods, adds value, and then
exports final products.

    The country 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, multi-lingual, and productive work force.  Over the
past 30 years, Belgium enjoyed the second-highest average
annual growth in productivity for all OECD countries (ranking
after Japan).

    Belgium's major exports to the world are cars, electrical
equipment, cut diamonds, iron, plastics, organic chemical
products and refined petroleum.  The country's main exports to
the United States include diamonds, chemicals, refined
petroleum products, bicycles, textiles, steel, and steel
products.  Main imports from the rest of the world are organic
chemical products, plastic, steel, rough diamonds, assembled
cars and electrical equipment.  Major imports from the United
States include petroleum products, transportation equipment,
diamonds, computers and related equipment and services.

    Belgium and the United States have strong reciprocal trade
relations.  Belgium receives about two percent of all U.S.
exports, which gives it a rank of 12th place worldwide as an
importer of U.S. goods.  Including U.S. exports which pass
through Belgium to other countries, Belgium is the United
States' 10th largest overseas market.  Belgium serves as an
entry point for many American products on their way to European
and worldwide destinations.  The United States generally
maintains with Belgium one of our most favorable bilateral
balances of trade in the world.  In 1992, the United States
exported $9.78 billion worth of goods to Belgium and imported
goods worth $4.48 billion from Belgium, for a merchandise trade
surplus of $5.30 billion, according to the U.S. Department of
    Belgium's high dependency on exports to European trading
partners with economies in recession, a reduction in domestic
investment and consumption, and high domestic interest rates
tied to German rates will lead to a contraction in GDP of about
1.5 percent in 1993, according to the National Bank of Belgium.

    For 1994, prospects are slightly better.  Growth could
reach plus 1.0 percent, but much depends on the economic
results in Germany and other neighboring countries.  After
falling significantly in most of the 1980s, Belgium's
unemployment level has grown steadily since the middle of 1989,
but at a level consistently below the EU average.  By the EU's
definition, Belgian unemployment reached 9.3 percent in August

    A focal point of economic policy for the Dehaene
government, which took office in March 1992, is to reach the
Maastricht Treaty's annual public sector budget deficit target
of three percent of GDP by 1996.  This target is proving
difficult to reach.  Belgium ended 1992 with its annual budget
deficit equal to 6.9 percent of GDP.  Government convergence
plans called for the annual deficit to drop sharply in 1993,
but with the ongoing recession reducing tax revenues and
raising social expenditures, the 1993 annual deficit will
probably end up little changed from the 1992 result.  This will
make adjustment in 1994 and later years even more painful if
the 1996 target is to be reached.

    Not only is Belgium's annual public sector deficit a
problem, so is its total level of net outstanding public sector
debt, which stood at 124 percent of GDP at the end of 1992, the
highest level in the OECD.  Debt service payments account for
41 percent of annual central government expenditures excluding
most social programs.  If not managed properly, the debt
service burden could lead to a "snowball effect" of new
deficits growing out of the requirement to finance old ones,
and debt service payments squeezing out other government
expenditures over time.  To attack this problem, the government
must progressively reduce the annual budget deficit primarily
by reducing expenditures rather than by raising taxes.  The
Belgian level of overall taxation is already near the top of
OECD countries, so there is little scope for finding new
revenues if the country, which depends heavily on international
trade, is to remain competitive.  Spending for social programs
accounts for about 70 percent of legally-required expenditures
excluding debt service, and agreeing on the needed level of
cuts is proving difficult for the government.

    Belgium offers many advantages to foreign investors,
including a well-educated, productive and generally prosperous
population.  Belgium's elaborate infrastructure and extensive
transportation, banking, and communications systems combine to
make the country a prime location for American firms seeking to
establish an office or facility abroad.  More than 60 percent
of the purchasing power in Western Europe lies within 500 miles
of Brussels.

    In previous decades, Belgium's only major natural resource
was coal, which was used in extensive steelworks.  Now all coal
mines are closed, and the steel industry has restructured. 
Today Belgium is mainly a "through-put" economy; i.e. the vast
majority of processed goods are imported as raw materials, then
transformed and mostly re-exported.  The principal sectors of
Belgium's industrial base include pharmaceuticals, high
technology, automobile assembly, textiles, steel products,
chemicals, refined petrochemicals, and petroleum products.

    State-owned enterprises generate a minor percentage of the
economic activity of the country.  The enterprises include
primarily public services such as the post office, telephone
company, railways and the national airline Sabena, as well as
some public sector banks.  To raise money to reduce the public
sector deficit, the government has begun to privatize some
state enterprises, so the contribution of state companies to
the economy will shrink further over time.

2.  Exchange Rate Policy

    Belgium participates in the EU's Exchange Rate Mechanism
(ERM) in the European Monetary System (EMS), and the Belgian
Franc (BF) makes up part of the basket of European currencies
from which the value of the ECU (European Currency Unit) is
calculated.  The Belgian Franc is equivalent at par with the
Luxembourg Franc; the two countries formed the
Belgian-Luxembourg Economic Union, or BLEU, in 1921.

    In March 1990, the Belgian government abolished its system
of dual exchange rates, whereby an official rate was used for
capital transactions and a free or commercial rate for
commercial transactions.  The move in the context of further EU
capital market liberalization did not disturb financial markets
in Belgium because the difference between the official and the
market rate had averaged less than one percent since 1982.  Of
greater consequence for the Belgian exchange rate outlook was
the decision by the Belgian authorities in May 1990 to link the
Belgian Franc much closer to the German Mark (DM).  The
National Bank of Belgium targeted a maximum divergence of 0.25
percent (versus 2.25 percent allowed) in the ERM.

    Belgium succeeded in maintaining this 0.25 percent
divergence for three years until market turbulence resulted in
the widening of the permitted ERM currency fluctuations to 15
percent beginning August 2, 1993.  The Belgian Franc since has
fallen more than 5 percent below its DM parity despite the
Belgian government's continued adherence to its "strong franc"
policy (now defined by the government as a divergence target of
2.25 percent against its DM parity).  

3.  Structural Policies

    In practice, Belgium does not discriminate between foreign
and domestic investors.  There are basically no legal measures
in force to protect local industry against foreign competitors,
except in the agricultural sector where the EU's external
tariffs and the quota structure of the Common Agricultural
Policy (CAP) apply.  Nevertheless, unwritten rules have favored
national suppliers for public procurement contracts and there
have been occasional instances where individual private sector
projects have met resistance from established economic
interests.  The U.S. discount chain Toys R Us, which has
received two government permits to date to operate, has other
permit requests denied or still pending.  In time, however,
these cases are typically resolved to the mutual satisfaction
of the parties concerned.

    Subsidies:  On July 20, 1993, Belgium completed its process
of constitutional change and became a federal state.  In this
new system, the three regional governments of Flanders,
Brussels, and Wallonia will assume responsibility for most
state aid programs under the guidance of the federal government
and EU regulation.  State aids are substantially based on two
federal laws:  (1) the Economic Expansion Act of August 4, 1978
(for small companies), and (2) the Economic Expansion Act of
December 30, 1970 (for large companies).  Both laws provide
financial and fiscal incentives for investments in land,
buildings, and tangible and intangible assets.  Belgian state
aid programs at all levels of government seem likely to shrink
in the next several years as pressures to limit them from the
EU Commission and from declining national and regional budgets
intensify.  The EU Commission believes that state aids distort
the single market, impair structural change, and threaten EU
convergence and social and economic cohesion.  Belgium has
historically been near the top of the EU in providing state
aids, well above the Union average.  In recent years about five
percent of total Belgian public sector spending has gone to
state aids, about 64 percent of which went to particular
industries, e.g. the railroads and coal mines.  In the future,
the remaining state aid programs will emphasize general
macroeconomic objectives such as promoting innovation, research
and development, energy saving, exports, and most of all,

    Investment:  U.S. direct investment in Belgium at the end
of 1992 stood at $10.8 billion, the 13th-highest level in the
world.  No restrictions in Belgium apply specifically to
foreign investors.  Specific restrictions that apply to all
investors in Belgium, foreign and domestic, include the need to
obtain special permission to open department stores, provide
transportation, produce and sell certain food items, cut and
polish diamonds, and sell firearms and ammunition.  During
1993, the American Chamber of Commerce in Belgium complained
publicly on behalf of some of its members about a deterioration
in certain aspects of the previously excellent foreign
investment climate in Belgium.  The American Chamber
specifically criticized the absence of a unified government
policy on foreign investment within Belgium resulting in firms
finding themselves welcomed and turned away at the same time by
different government agencies.  In addition, the Chamber
complained of an inconsistent approach to environmentally
sensitive investment projects, contradictory tax treatment of
expatriate cost remuneration, uncertainties concerning the
legal status of certain kinds of investments, and hardships for
the families of expatriates occasioned by Belgian tax, visa,
and immigration policies.

    Tax structure:  Belgium's tax structure was substantially
revised in 1989.  The top marginal rate on personal income is
still 55 percent.  Corporations are taxed on income at a
standard rate of 39 percent and a reduced rate ranging from 29
percent to 37 percent.  Branches of foreign offices are taxed
on total profits at a rate of 43 percent, or at a lower rate in
accordance with the provisions contained in the double taxation
treaty.  Under the bilateral treaty between Belgium and the
United States, that rate is 39 percent.

    Despite the reforms of the past five years, the Belgian tax
system is still characterized by relatively high marginal rates
and a fairly narrow base resulting from numerous fiscal
loopholes.  While indirect taxes are lower than elsewhere in
the EU, both in relation to GNP and as a share of total
revenues, personal income taxation and social security
contributions are particularly heavy.

    The United States-Belgium bilateral income tax treaty dates
from 1970.  A protocol to the 1970 treaty was concluded in
December 1987 and approved by the Belgian Parliament in April
1989.  The instruments of ratification were exchanged by the
U.S. and Belgian governments in July 1989, and the protocol
went into effect retroactive to January 1, 1988.  The protocol
amends the existing treaty by providing for a reciprocal
reduction of the withholding rate on corporate dividends from
15 to 5 percent (a feature which was actively sought by the
American business community).

4.  Debt Management Policies

    Belgium's public sector is a net external debtor, but the
net foreign assets of the private sector probably push the
country into a net creditor position.  Only about 13 percent of
the Belgian government's overall debt is owed to foreign
creditors.  Moody's Aa1 rating of the country's bond issues in
foreign currency fully reflects Belgium's integrated position
in the EU, its significant improvements in fiscal and external
balances over the past few years, its economic union with the
financial powerhouse of Luxembourg, as well as the slowdown in
external debt growth.  The Belgian government does not
experience any major problems in obtaining new loans on the
local credit market.  Because of the reform of monetary policy
in January 1991, as well as greater independence granted in
1993 to the National Bank of Belgium (NBB), direct financing in
Belgian francs by the Treasury through the central bank has
become 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 by the
Belgian government has also been restricted.  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, the
EBRD and the Paris Club.  Belgium is a significant donor
nation, and it closely follows development and debt issues,
particularly with respect to Zaire (where development aid flows
are frozen) and some other African nations.

5.  Significant Barriers to U.S. Exports and Investment

    With the beginning of the EU's single market, Belgium has
implemented most, but not all, of the trade and investment
rules necessary to harmonize with the rules of the 11 other EU
member countries.  Thus, the potential for U.S. exporters to
take advantage of the vastly expanded EU market through
investments or sales in Belgium has grown 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 subcontractors 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 9 percent to Brussels.  As a
consequence, many U.S. defense companies have steered clear of
the Belgian defense market.  The number of military contracts
is dwindling, however, as Belgian military spending declines.

-   Telecommunications:  Foreign suppliers of
telecommunications equipment have encountered difficulties in
gaining access to the Belgian market, especially when they do
not have production facilities in the country.  This attitude
appears to be changing, however.  Belgacom, the Belgian
state-controlled PTT company which received operating autonomy
in 1991, has apparently concluded that to be competitive in the
international telecommunications market, and to provide quality
service to customers, it must find technologically-advanced
foreign partners.  The government has identified Belgacom as a
potential firm for privatization.  Pactel has just been awarded
a contract to upgrade Belgium's cellular telephone system, and
U.S. companies are considered competitive to win contracts in
other areas.

-   Broadcasting and Motion Pictures:  Belgium voted against
the EU 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 EU has taken the
Walloon and Flemish communities to the European Court of
Justice concerning these requirements, and in Flanders won a
decision to force a foreign firm access to the cable television
system.  In 1993 the francophone region led an effort to
exclude the U.S. TNT cartoon channel from cable systems in all
three regions.  A Brussels court subsequently required the
broadcasting of TNT in the Brussels region, but a legal appeal
may be possible.

-   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 to take advantage of the 1992 single
market process, the number of U.S. lawyers with a professional
card was approaching the limit until it was raised by the
Belgian government in 1990.  A government review of the
qualitative restrictions on the activities of foreign legal
consultants, many of which are not applied, is being considered.

-   Car Registration Tax:  In June 1992, the Belgian government
passed a car registration tax which had a potentially
significant impact on the importation of U.S. cars, four-wheel
drive vehicles, and minivans into Belgium.  In determining how
to set the new registration tax, Belgian government officials
chose vehicles with large engines, in particular those of 3.0
liters or greater.  Since U.S. imported vehicles tend to be of
larger engine size, the new tax could reduce the number of
American vehicles imported into Belgium but to date does not
seem to have done so.  The overwhelming number of U.S. vehicles
sold in Belgium are produced by Ford and General Motors in
Belgian facilities.

-   Pharmaceutical Pricing:  Drugs and Pharmaceuticals in
Belgium are subject to government price controls.  Major
American pharmaceutical firms with investment in Belgium are
increasingly concerned with this restrictive pricing policy.

6.  Export Subsidies Policies

    There are few direct export subsidies offered by the
Government of Belgium to industrial and commercial entities in
the country, but the government does conduct an active program
of trade promotion.  This trade promotion activity (subsidies
for participation in foreign fairs and the compilation of
market research reports), together with a social expenditure
break (a reduction of social security contributions by
employers, and generous rules for cyclical layoffs) are offered
to both domestic and foreign companies by the government, and
they may come close to the definition of a subsidy in the case
of a company engaged in exporting.

    Belgian government subsidies to its Airbus partners runs in
the hundreds of millions of dollars for the period 1992-98. 
Central government Airbus subsidies may be self-extinguishing,
but regional government subsidies seem likely to rise in the
future despite commitments to control them.

7.  Protection of U.S. Intellectual Property

    The Government of Belgium is keenly interested in
intellectual property protection and actively followed the
subject in the Uruguay Round negotiations.  Some Belgian firms,
especially textile capital equipment manufacturers, have seen
their research and development efforts pirated and are
therefore eager to improve the standards of protection.  The
Motion Picture Export Association of America (MPEAA) has
complained of a significant level of video piracy in Belgium.

    Belgium is party to the major intellectual property
agreements, including the Paris, Bern and Universal Copyright
Conventions, and the Patent Cooperation Treaty.

    The EU imposed a January 1, 1993, deadline for
implementation of the EU software copyright directive into
Belgian law.  A still pending GOB copyright bill to fulfill the
EU requirement provides for an eight percent levy on blank
audio and video tapes, as well as their recording devices, plus
an eight percent levy on the import price of photocopiers as
compensation for the copying of music and video recordings. 
The current draft legislation apparently does not contain any
reciprocity clauses, and may benefit U.S. authors, performing
artists, and producers, since 70 percent of the levy proceeds
are earmarked for these groups.  In addition, unauthorized
copying would be penalized through fines and imprisonment. The
bill still awaits full Parliamentary approval.

    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 World Intellectual Property Organization (WIPO) is also

8.  Worker Rights

    a.   Right of Association

    With an estimated 66 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. 
Belgian workers have the right to associate freely and to
strike.  In certain narrowly defined circumstances, however,
such as in the provision of essential public services, public
employees' right to strike is not explicitly recognized. 
Unions striking or protesting government policies or actions
are free from harassment and persecution.  Significant strikes
occurred in 1993 in the education, shipbuilding, and social
welfare sectors.

    Labor unions are strong and independent of the government
but have important informal links with and influence in many of
the major political parties.  Belgian unions 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.  Management and unions
negotiate every other year a nationwide collective bargaining
agreement covering the 2.4 million private sector workers,
which establishes the framework for negotiations at plant and
branch level for the subsequent two years.

    The right to due process and judicial review are guaranteed
for all protected activity.  Effective mechanisms exist for
adjudicating disputes between labor and management.  Belgium
maintains a system of labor tribunals and regular courts which
hears disputes arising from labor contracts, collective
bargaining agreements, and other matters.

    c.   Prohibition of Forced or Compulsory Labor

    Forced or compulsory labor is illegal and does not occur.

    d.   Minimum Age for Employment of Children

    The minimum age for employment of children is 15, but there
is compulsory schooling until the age of 18.  The labor courts
effectively monitor compliance with national laws and
standards.  New legislation further tightening conditions of
child labor in entertainment and related occupations was
adopted in 1992.

    e.   Acceptable Conditions of Work

    Belgian working hours, regulated by law as well as through
collective bargaining agreements, are among the shortest in
Europe.  A maximum 40-hour workweek is mandated by law,
although many collective bargaining agreements call for
workweeks of between 36 and 39 hours.

    The minimum wage rates in the private sector are set in
biannual nationwide negotiations between the leading trade
unions and the Belgian Business Federation.  After agreement is
reached, a formal collective bargaining agreement is signed by
the National Labor Council and is made mandatory upon the
entire private sector by Royal Decree.  In the public sector,
the minimum wage is determined in negotiations between the
government and the public service unions.  The legal minimum
wage for full-time workers age 21 and above (currently about
dollars 1,167 (BF 40,843) per month in the private sector and
dollars 1,286 (BF 45,000) per month for public sector workers)
provides a comfortable standard of living.  The Belgian minimum
wage level is often cited as one reason for the country's high
rate of unemployment.

    Comprehensive health and safety legislation is supplemented
by collective bargaining agreements on safety issues.  The
Labor Ministry implements this legislation through a team of
inspectors and determines whether a worker qualifies for
disability and medical benefits.  Health and safety committees
are mandated by law in companies with more than 50 employees
and by works councils in companies with more than 100
employees.  Labor courts effectively monitor compliance with
national laws and standards.

         Extent of U.S. Investment in Selected Industries

              U.S. Direct Investment Position Abroad
                on an Historical Cost Basis - 1992
                    (millions of U.S. dollars)

Category                                    Amount

Petroleum                                                291
Total Manufacturing                                    5,940
    Food & Kindred Products                    440
    Chemicals and Allied Products            3,356
    Metals, Primary & Fabricated               234
    Machinery, except Electrical                 D
    Electric & Electronic Equipment            196
    Transportation Equipment                     D
    Other Manufacturing                      1,129
Wholesale Trade                                        1,811
Banking                                                    D
Finance and Insurance                                  2,072
Services                                                 502
Other Industries                                           D

TOTAL ALL INDUSTRIES                                  10,771

(D)-Suppressed to avoid disclosing data of individual companies

Source:  U.S. Department of Commerce, Bureau of Economic

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