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                     Key Ecomomic Indicators
        (Millions of U.S. dollars unless otherwise noted)

                                    1992      1993      1994 1/

Income, Production and Employment:

Real GDP (1985 prices) 2/          176.9     162.1     172.9
Real GDP Growth (pct.)               1.4      -1.3       1.8
GDP (at current prices) 2/         219.0     206.4     226.3
By Sector:
  Agriculture                        3.7       N/A       N/A
  Energy/Water                       9.6       N/A       N/A
  Manufacturing                     44.5       N/A       N/A
  Construction                      12.7       N/A       N/A
  Services                         119.1       N/A       N/A
  Government/Health/Education       29.3       N/A       N/A
Real Per Capita GDP (1985 prices) 17,711    16,210    17,170
Labor Force (000s)                 4,237     4,261     4,279
Unemployment Rate (pct.)             9.4      10.5      10.9

Money and Prices:

Money Supply (M1)                   40.4      40.7       N/A
Base Interest Rate 3/                8.7       7.2       6.4
Personal Saving Rate                19.5      20.6      20.2
Retail Inflation                     2.1       2.6       1.8
Wholesale Inflation                 -1.8       0.2       1.5
Consumer Price Index                 2.4       2.7       2.5
Exchange Rate (BF/USD)              32.1      34.6      32.8

Balance of Payments and Trade:

Total Exports (FOB)                123.5     111.3     115.6
  Exports to U.S.                   4.41      4.90       N/A
Total Imports (CIF) 4/             125.2     114.7     117.5
  Imports from U.S.                 5.47      5.21       N/A
External Public Debt                31.5      43.9     44.65
Gold and Foreign Exch. Reserves     11.4      13.9      18.1
Trade Balance 4/                    -1.7      -3.4      -1.9
  Trade Balance with U.S.          -1.06      -0.3       N/A

N/A--Not available.

1/ 1994 figures are all estimates based on available monthly
data in October 1994.
2/ GDP at factor cost.
3/ Figures are actual, average annual interest rates.
4/ Merchandise trade.

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, the
country depends heavily on world trade.  About 75 percent of
its trade takes place with other European Union (EU) members. 
Belgium ranked as the ninth-largest trading country in the
world in 1993.  The country's service sector generates more
than 70 percent of GDP, compared with 25 percent for industry
and two percent for agriculture.  Belgium imports many basic or
intermediate goods, adds value, and then exports final products.

    Belgium exports twice as much per capita as Germany and
five times as much as Japan.  The country derives trade
advantages from its central geographic location, and a highly
skilled, multilingual and industrious workforce.  Over the past
30 years, Belgium has enjoyed the second-highest average annual
growth in productivity for all OECD countries after Japan.

    Globally, Belgium ranks as the United States' 10th-largest
export market worldwide and the fifth-largest in Western
Europe.  Belgium is the 13th largest target for U.S. investment
in the world.  U.S. trade and investment prospects are
positive, and many opportunities exist for U.S. exporters and
investors.  The Belgian government recently undertook steps to
improve the foreign investment climate even more.

    Of all European Union members, Belgium's 1993 economic
recession was the worst after Germany's.  Part of the 1993
recession came about because the government instituted a
variety of budget cuts and revenue measures totalling about 6.6
percent of GDP in 1992 and 1993 to try to meet economic
performance targets under the EU's proposed Economic and
Monetary Union (EMU).  Due to the highest net public sector
debt load among OECD countries (127 percent of GDP), Belgium
faces tight fiscal policy for many years to come.

    Belgium, with its small open economy, is very vulnerable to
declines in economic activity in Germany, France and the
Netherlands, which together account for more than half of
Belgium's exports.  Belgian unemployment currently stands at
more than 10 percent of the workforce (by EU and OECD
standardized definitions), an increase of more than 15 percent
in one year.  The country's competitiveness also deteriorated
in 1993.  Per capita wage costs increased by 4.2 percent,
against 3.6 percent for the country's seven most important
trading partners.  

    For 1994, the extent of economic recovery in Belgium
depends in large part on economic development results in
neighboring countries, as well as the degree of Belgian
monetary and fiscal tightness.  Most recent GDP growth
forecasts are in the neighborhood of 2.3 percent in 1994 and
2.8 percent in 1995.

    Belgium completed domestic ratification of the Uruguay
Round agreement and became a founding member of the WTO on
January 1, 1995.

    When the present coalition government under Prime Minister
Dehaene came to power in March 1992, it set three budgetary
targets.  First, federal expenditures net of debt payments
should not grow faster than the inflation rate.  Second, the
growth rate of fiscal revenues should at least match the growth
rate of nominal GDP.  Third, the deficit in the social security
budget should be eliminated.  The Government has managed to
meet the two first criteria, but has not yet balanced the
social security budget, mainly due to substantial cost overruns
in health insurance and unemployment benefits.  In 1993, the
Government of Belgium's (GOB) public sector budget deficit
equaled 7.2 percent of GDP, up 0.3 percentage points from the
1992 level.  According to the Government's own convergence plan
for possible membership in the European Economic and Monetary
Union (EMU), the 1993 target was 5.8 percent.  For 1994, it is
4.8 percent.  Despite weak fiscal results to date, the Belgian
Government since March 1992 has implemented budgetary austerity
measures worth more than $ 16.2 billion, or about 6.6 percent
of GDP.  Even though 75 percent of these measures were revenue
increases rather than expenditure cuts, they had the advantage
of being mostly structural in nature, as opposed to one-time
measures.  As a consequence, the Government still expects to
meet the three percent of GDP annual budget deficit target in
1996, one of the Maastricht Treaty requirements for possible
full EMU membership.  Since Belgium has virtually no chance of
reaching in this decade the 60 percent of GDP public debt
target under the Maastricht Treaty, the Belgian public sector
must come close to the annual deficit target to obtain a
derogation on the debt target.  

2.  Exchange Rate Policy

    Belgian monetary policy basically shadows German interest
rates as closely as possible in order to keep the Belgian Franc
(BF) close to a central parity with the Deutsche Mark (DM).  In
June 1990, the National Bank of Belgium (NBB) decided to keep
the BF within a plus or minus 0.3 percent band around the
central parity of the DM, a much narrower band than what the
European Exchange Rate Mechanism (ERM) required.  That policy
proved successful during the next three years; Belgian
inflation ranked among the lowest in the EU, and renewed
credibility of the BF allowed the Government to finance its
debt at good rates.  As part of the near collapse of the entire
ERM on July 30, 1993, this "strong franc" policy came under
serious attack both before and after the widening of the ERM
fluctuation bands on August 2, 1993.  Despite the NBB's
intention to bring the BF back within the narrow ERM band as
soon as possible, markets began to focus more on Belgium's
imbalances (mainly the widening budget deficit gap, the huge
public debt and the depth of the recession).  Serious pressures
developed against the BF in the summer and fall of 1993. 
Consequently, the NBB and Government used high short-term
interest rates, jawboning and currency market interventions to
support the BF.

    After the franc slipped by about seven percent against the
central parity rate with the Mark, several factors came to its
rescue, apart from high interest rates and currency market
intervention.  The German Bundesbank lowered its key interest
rates at the end of October 1993, relieving the pressure in the
ERM.  The ensuing appreciation of the dollar against the DM
further eased the pressure on the BF.  Subsequently, the NBB
lowered its interest rates by more than 100 basis points within
two weeks.  Through the combination of the above factors, the
BF by the end of 1993 had returned close to the central parity
with the DM, and has stayed there since then, despite gradual
short-term interest rate cuts.

3.  Structural Policies

    In practice, freedom of trade in 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.  

    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 mainly 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 community 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 macro
objectives such as promoting innovation, research and
development, energy saving, exports, and most of all,

    Investment:  Belgium maintains an excellent investment
climate for U.S. companies. U.S. investment in Belgium - almost
$11 billion - ranks 13th 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 polished 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 deterioriation 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.  Since then, the
government has responded positively to these points and
promised to take the necessary measures to remedy these

    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 the EU average,
both in relation to GDP 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 push the country into
a net creditor position.  Only about 15 percent of the Belgian
government's overall debt is owed to foreign creditors. 
Moody's top 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 $ 500 million
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

    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 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 barriers to services and commodity trade still exist,
however, including:

    Telecommunications:  The Belgian telecommunications market,
with its state monopoly of the basic telephone network, has
shown recently a greater degree of openness than in the past. 
A second cellular license will be issued before the end of
1994, the yellow pages have been opened up to competition
(albeit both under EU pressure) and the search is on for a
strategic partner for Belgacom, the public telephone operator. 
However, foreign suppliers of equipment still complain that
they face an unequal battle with the 'national champions'.

    Ecotaxes:  The Belgian government has passed a series of
ecotaxes, in order to redirect consumer buying patterns away
from environmentally damaging materials (as defined by the
green parties, which supported the government coalition's
efforts to revise the constitution and create a federal
state).  These taxes will possibly raise costs for U.S.
exporters, since U.S. companies selling into the Belgian market
must adapt to the phased-in implementation of these taxes,
which may add more costs to U.S. producers forced to adapt
worldwide products to varying EU environmental standards.

    Belgian Subsidies to Airbus Participants:  Since the
inception of the Airbus project in Europe, Belgian companies
have participated as subcontractors to the main German and
French producers of the aircraft.  In the past, Belgian public
production supports for Airbus contractors have included
subsidies for both recurring and non-recurring costs.  Cash
advances were halted in 1991, though support continues today in
the form of a guaranteed exchange rate designed to compensate
Belgian contractors for the decline in the BF/dollar rate.  The
precise level of the subsidy depends on the equipment being
supplied, the Airbus aircraft type, and the degree of Belgian
federal and regional government participation.  Between 1978
and 1991, Belgian federal and regional authorities contributed
an estimated $167 million to Belgian Airbus component
manufacturers participating in the Belairbus consortium. In the
period 1992-1998, Belgian governments have pledged $392 million
in total support.  While federal supports are scheduled to end,
regional government subsidies are likely to continue and even
rise in the future, despite federal government commitments to
control them.  This, of course, depends on Belgian industry
receiving continued work from the Airbus consortium.

    Regionalization:  The devolution of various central
government powers to the three regions of Belgium is
accelerating.  The regions already have considerable influence
over educational and environmental matters and control most of
the subsidies and investment incentives given to both domestic
and foreign business.  At some point, it is likely that the
regions will press for taxing authority to raise revenues, in
order to meet their added responsibilities.  There is
inconsistent enforcement of environment regulations among the
regions, which may lead to a less favorable investment climate
for U.S. business in some parts of the country.  The regions
have promised to take steps to avoid nontransparency and
conflicting jurisdictions. 

    Opening the Retail Service Sector to U.S. Firms:  During
1993 and 1994, the large U.S. retail chain, Toys R Us, has
experienced considerable difficulty in obtaining permits to
open three outlets in Belgium.  Current legislation is designed
to protect the small shopkeeper in Belgium and has a decidedly
nontransparent and protectionist bent.  While Belgian retailers
also suffer from the same restrictions, their existing sites
give them strong market share and power in local markets.  Toys
R Us officials want to continue to open outlets in Belgium and
are concerned that strict enforcement of the retail law will
prevent them from doing so.

    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.  The number
of military contracts is dwindling, however, as Belgian
military spending declines.  

    Broadcasting and Motion Pictures:  Belgium voted against
the EU broadcasting directive (which required high percentages
of European 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.  In 1993 the Francophone
community 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.  Similar difficulties await NBC and Viacom, when they
try to enter the Flemish market in early 1995 with their TV4

6.  Export Subsidies Policies

    There are no 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 in export sectors, and
they may come close to the definition of a subsidy in the case
of a company engaged in exporting.

7.  Protection of U.S. Intellectual Property

    Belgium is party to the major intellectual property
agreements, including the Paris, Berne and Universal Copyright
Conventions, and the Patent Cooperation Treaty.  Nevertheless,
an estimated 25 percent of Belgium's video cassette and compact
disc markets are composed of pirated cassettes.  

    On June 30, 1994, the Belgian Senate gave its final
approval of the revised Belgian copyright law.  The old law
dated from 1886.  National treatment standards were introduced
in the blank tape levy provisions of the new law, replacing
reciprocity standards.  Problems regarding first fixation and
non-assignability were also resolved.  The final law states
that authors will receive national treatment, and allows for
sufficient manoeuvrability in neighbouring rights.  It is
estimated that U.S. authors and producers will receive some $7
million annually from the proceeds of the blank tape levy in

    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.  The Right Of Association

    Belgium has a long tradition of democratic trade unions. 
Workers have the right to associate freely, hold free elections
and strike.  Unions striking or protesting government policies
or actions are free from harassment and persecution. 
Anti-union actions before a union is legally registered are
effectively prohibited.  Labor unions are independent of the
government but have important informal links with and influence
on several major political parties.  Belgian unions are free to
affiliate with and are affiliated with the major international
labor bodies.  In the provision of essential public services,
public employees' right to strike is implicitly recognized. 
Public employees may and often do strike.  Laws and
regulations, effectively enforced, prohibit retribution against
strikers and union leaders.

    b.  The Right To Organize and Bargain Collectively

    The right to organize and bargain collectively is
recognized and exercised freely.  Management and unions
negotiate a nationwide collective bargaining agreement, which
establishes the framework for negotiations at plant and branch
levels.  The right to due process and judicial review are
guaranteed for all protected union activity.  Belgian law
prohibits discrimination against union members and organizers
and provides special protection against termination of
contracts of shop stewards and members of workers' councils and
of health and safety committees.  Employers found guilty of
such discrimination are required to reinstate workers. 
Effective mechanisms exist for adjudicating disputes between
labor and management.  Belgium maintains a system of labor
tribunals and regular courts which hear disputes arising from
labor contracts, collective bargaining agreements, and other
labor matters.

    Belgium has no export processing zones.

    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
schooling is compulsory until the age of 18.  Youth between the
ages of 15 and 18 can participate in part-time work/part-time
study programs.  Students can also sign summer labor contracts
of up to 30 days.  During that period, they can work the same
number of hours as adults.  The labor courts effectively
monitor compliance with nationals laws and standards.

    e.  Acceptable Conditions of Work

    The current monthly national minimum wage rate for workers
age 22 and over is 42,469 Belgian francs, effective as of June
1994.  Based on the exchange rate of October 19, 1994, this is
equivalent to $ 1,374.  Workers between 18 and 21 can be paid
less than minimum wage.  18-year-olds can be paid 82 percent of
the national minimum wage, 19-year-olds 88 percent, and
20-year-olds 94 percent.  Minimum wage rates in the private
sector are established by nation-wide labor/management
negotiations.  In the public sector, the minimum wage is
determined in negotiations between the government and the
public service unions.  Regular cost of living adjustments are
made during the course of each year to the basic minimum wage
rate.  The Ministry of Labor effectively enforces minimum-wage
laws.  A maximum 40-hour workweek which provides at least one
24-hour rest period is mandated by law, although many
collective bargaining agreements have set shorter work weeks. 
The law requires overtime payment for hours worked in excess of
a regular workweek.  Excessive compulsory overtime is
prohibited.  These laws are enforced effectively. 
Comprehensive health and safety legislation is supplemented by
collective bargaining agreements on safety issues.  Workers
have the right to remove themselves from situations which
endanger their health or safety without jeopardy to their
continued employment, and Belgian law protects workers who file
complaints about such situations.  The Labor Ministry
implements health and safety legislation through a team of
inspectors and determines whether workers qualify 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.  The Ministry of Labor effectively monitors
compliance with national health and safety laws and standards.

    f.  Rights in Sectors with U.S. Investment

    U.S. capital is invested in many sectors in Belgium. 
Worker rights in these sectors do not differ from those in
other aeas.  Worker rights are practiced and observed uniformly
throughout the country.

  Extent of U.S. Investment in Selected Industries.--U.S. Direct
Investment Position Abroad on an Historical Cost Basis--1993

                    (Millions of U.S. dollars)
              Category                          Amount          

Petroleum                                                249
Total Manufacturing                                    5,557
  Food & Kindred Products                     411
  Chemicals and Allied Products             3,415
  Metals, Primary & Fabricated                240
  Machinery, except Electrical                 56
  Electric & Electronic Equipment             215
  Transportation Equipment                    (1)
  Other Manufacturing                         (1)
Wholesale Trade                                        2,056
Banking                                                   97
Finance/Insurance/Real Estate                          2,794
Services                                                 708
Other Industries                                          91
TOTAL ALL INDUSTRIES                                  11,552   

(1) Suppressed to avoid disclosing data of individual companies
Source: U.S. Department of Commerce, Bureau of Economic


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