Belgium Trade Manual: Canada

The following document is a report on the current economic, political, cultural, and industry specific (Food) environment in the country of Belgium. This particular manual was specifically compiled for the Sweets Corporation of Toronto, Canada for June of 2011.

C o n s u l a t e o f B e l g i u m -­‐ T o r o n t o 2 B l o o r S t r e e t W e s t , S u i t e 2 0 0 6 , B o x 8 8 T o r o n t o , O N , M 4 W 3 E 2

Table of Contents
Section 1 – Background Information ....................................................................................................... 3
1.1 - Geography ................................................................................................................................................................... 4 1.2 - People ........................................................................................................................................................................ 5-6 1.3 - History of Belgium .................................................................................................................................................... 6-7 1.4 - Standard Belgian Working Week ................................................................................................................................. 7 1.5 - Educational System ...................................................................................................................................................... 8 1.6 - Health in Belgium......................................................................................................................................................... 8

Section 2 – Political Information .............................................................................................................. 9
2.1 - The King ..................................................................................................................................................................... 10 2.2 - The Government .................................................................................................................................................... 10-11 2.3 - The Electoral System.................................................................................................................................................. 12 2.4 - The Regional, Provincial and Local Government ...................................................................................................... 12 2.5 - Political History ..................................................................................................................................................... 12-13 2.6 - Current Political Officials .......................................................................................................................................... 13 2.7 - Political Parties ...................................................................................................................................................... 13-14 2.8 - International Political Affiliations ......................................................................................................................... 14-15 2.9 - Belgium-Canada Relations ......................................................................................................................................... 15 2.10 - Current Political Issues ............................................................................................................................................. 16 2.11 - Corruption in Belgian Politics .................................................................................................................................. 16

Section 3 – Economic Information ......................................................................................................... 17
3.1 - Overview of Belgian Economy .................................................................................................................................. 18 3.2 - Belgian Currency ........................................................................................................................................................ 19 3.3 - Economic History ....................................................................................................................................................... 19 3.4 - Belgium’s GDP........................................................................................................................................................... 19 3.5 - Belgian and European Consumer Market................................................................................................................... 20 3.6 - Belgian Importing and Exporting .......................................................................................................................... 20-21 3.7 - Belgian-Canadian Economic and Trade Relations ................................................................................................ 21-22 3.8 - Banking System .......................................................................................................................................................... 22 3.9 - Regional Economic Differences ............................................................................................................................ 22-23

Section 4 – Industry Specific (Food) Information ................................................................................ 24
4.1 - Overview of Food Industry and Standards ................................................................................................................. 25 4.2 - European Union Product Standards....................................................................................................................... 25-26 4.3 - Product Packaging and Labeling Standards ............................................................................................................... 26 4.4 - Workplace Regulations and Employment Laws......................................................................................................... 26 4.5 - Current Canadian Companies ..................................................................................................................................... 27 4.6 - Import Tariffs ............................................................................................................................................................. 27 4.7 - Logistics and Shipping ............................................................................................................................................... 27 4.8 - Sector Leaders ....................................................................................................................................................... 27-28

Section 5 – Cultural and Additional Information ................................................................................. 29
5.1 - Belgian Etiquette ................................................................................................................................................... 30-31 5.2 - Belgian Society and Culture ....................................................................................................................................... 31 5.3 - Belgian Food............................................................................................................................................................... 31 5.4 - Travel Accommodations............................................................................................................................................. 32 5.5 - Health Issues............................................................................................................................................................... 32 5.6 - Political issues ............................................................................................................................................................ 32

Section 6 – Recommendations and Conclusions.................................................................................... 33
6.1 - Advantages of Investment in Belgium .................................................................................................................. 34-35 6.2 - Suggested Market Entry Plan ................................................................................................................................ 35-36 6.3 - Problem Solving .................................................................................................................................................... 36-37 6.4 - Conclusion .................................................................................................................................................................. 37 6.5 - Contacts ................................................................................................................................................................. 37-38 6.6 - Works Cited ........................................................................................................................................................... 39-40

2

1. Background Information This particular section of the Belgium Trade Manual will review and analyze the following information. - Belgian Geography – Climate, Terrain, Borders, Area - Belgian People – Population, Pop. Growth Rates Pop. Densities, Gender Ratio, Median Pop. Age, Main Ethnic Groups, Main Religions, Main Languages Spoken, and Cities - Belgian History – A brief summary of Belgium’s History. - Belgian Working Week – Times, Policies, and Holidays. - Belgian Educational System – Literacy Rate, How Belgian Education System Works. - Belgian Health System – Funding, Life Expectancy, Birth Rate, and Doctor/Patient Ratios.

3

1.1 Geography The Kingdom of Belgium, more commonly known as just Belgium is located in Western Europe, bordering the North Sea (66.5 km) France (620km), The Netherlands (450km), Germany (167km) and Luxembourg (148km). Belgium is located at the crossroads of Western Europe, with many major West European countries and metropolises located within 1,000 kilometres of Brussels. The country’s total area is 30,528 km2, the 140th largest country by area in the world. Around 89% of Belgium’s total area is made up of land, with the remaining 11% being composed by various rivers, lakes, and artificial waterways. These waterways are essential to trade and business operations in Belgium, as the serve as import and export locations within Belgium. As you can observe in the map above, there are two large artificial canals that connect the North Sea to the major Belgian ports of Antwerp, Ghent, Namur, and Liege. Belgians port and inland transport systems are very well developed and maintained too. The country also has a significant coastline of 66.5 kilometres in length and littered with maritime ports and small coastal townships. The climate of Belgium is maritime temperate, with significant amounts of precipitation in all seasons, with cool summers and mild winters and substantial amounts of rain, overcast, and humidity. In terms of terrain, Belgium consists of coastal flat plains in the northwest regions, rolling hills in the central regions, and rugged mountains in the southern Ardennes Forest. Belgium is located at the crossroads of Western Europe, with many major West European countries located within 1,000 kilometres of Brussels. In relation to Toronto, Canada, Belgium is located roughly 5600 kilometres away. The flying time from Pearson International Airport (YYZ) to Brussels Airport (BRU) is around 6½ hours to 7 hours one-way.

4

1.2 People Belgium has a total population of 10,839, 905 people (80th in world) as of 2010, with a population growth rate of 0.08% (2011 est.). The population of our country is evenly spread out across our country, with a total population density of 862.9 persons per square mile, making it one of the most densely populated countries in the world. The majority of the Belgian populous is located in urban and sub-urban areas in Flanders, Brussels, and Wallonia. The gender ratio in Belgium is 0.96 male(s) to females, with the median population age at 42.3 years of age, with the female median age at 43.6 years and the male median population at 41 years, in accordance with 2011 estimations. Belgium is a melting pot of different European cultures and ethnicities, serving as a home to French, Dutch, Germanic, Roman, Celtic, Spanish, and Austrian cultures, each one having a distinct affect on our national identity and culture. In terms of religion, the majority of Belgians worship the Roman Catholic religion (roughly 75%). The remaining 25% follow Protestant, Jewish, Greek Orthodox, Russian Orthodox, Muslim, and Anglican religions. The official languages of Belgium are French (40%), Dutch (60%), German (less than 1%). These languages are primarily spoken in the different ethnic regions of Belgium, which are Wallonia, Flanders, and Brussels. Wallonia is the French-speaking region of Belgium, which is home to mostly people of Walloon ethnic background. The Walloons make up approximately 33% of Belgium’s population. Flanders is the Dutch-speaking region of the country, which is home to the Flemish people. People of Flemish ethnicity make up approximately 58% of Belgium’s total population. Despite the significant differences between the Walloon and Flemish people, no significant violence or disputes have occurred in their history. The remaining 9% of Belgium’s ethnic make up is located mainly in Brussels and consists of a mix of many different European ethnicities, most significantly Italian and 5

Moroccan. Other less popular, but still recognized languages in the country are Spanish, Greek, Arabic, and Turkish. Belgium has a fairly urban population, with 97% of the total population being urbanized, and an urbanization rate of 0.4% annually from 2010 to 2015. Most of the Belgian populous live in, or near, urban centres. Our countries largest metropolises are Brussels (pop. 1,089,538), Antwerp (pop. 483,505), Ghent (pop. 243,336) Charleroi (pop. 202, 598), Liege (pop. 192,504), Bruges (pop. 116,741), and Namur (pop. 108,950). 1.3 History of Belgium The Kingdom of Belgium derives its name from the Belgae, a Celtic tribe. The Belgae flourished in the region that is now Belgium, until the Belgae were conquered by the armies of the Roman Empire, under the leadership of Julius Caesar in 51 B.C. For around five centuries, the Belgae peoples continued to flourish and enjoy prosperity as a province of the Roman Empire. However, this prosperity came to an end in the Fifth Century A.D. when the Roman Empire eventually collapsed and Germanic tribes invaded the region and conquered the region. From the Fifth Century through the Early Middle Ages, Belgium passed under various rulers and occupiers including the Spanish (1519-1713) and the Austrians (1713-1794). After the French Revolution in 1789, France conquered Belgium in 1795, under Napoleon Bonaparte’s rule. His rule was short-lived however, when France was defeated at the Battle of Waterloo just south of Brussels. Following the defeat of the French Forces lead by Napoleon, the Netherlands overtook Belgium and held its stronghold rule over our country until August of 1830. It was during that month, that the Belgian people broke out from under their oppression and, with the aid of French armed forces, removed the Dutch from Belgium. After its independence, Belgium suffered from language friction between the Flemish and Walloon peoples and clashes between the different classes of Belgian society. In 1884-1885 at the Berlin Conference, the African region of the Congo was given to the King Leopold II of Belgium as a “free state”. The acquisition of the unexplored Congo to Leopold II was very significant. Under his rule, the Congo witnessed much modern advancement to the area. Great economic success stemmed from the privately owned region due to the mass amounts of rubber that was extracted and sold at European market. However, the Congolese people suffered many great atrocities at the hand of the Belgian colonists. It is estimated that under Leopold II, over 10 million Congolese people died. After the atrocities became well known throughout Europe, the Kingdom of

6

Belgium adopted the region from Leopold II as a colony; the Belgian Congo. The Belgian Congo remained a colony of Belgium until it gained its independence from Belgium in 1960. In 1914, the Weimer Republic of Germany invaded Belgium, after a series of incidents that lead to World War I. From the beginning of World War I to the end, Belgium bared witness to some of the most atrocious acts committed in the history of the human race. Some of World War I’s largest, cruelest, and most significant battles took place in Flanders. After World War I, the casualties and the destruction of their land devastated the Belgian populous, especially the Flemish peoples. Belgium began to recover after World War I. The nation received the African regions of Rwanda and Burundi, from which economic wealth was produced. The rebuilding of Belgium came to a halt in September of 1939 when Germany once again began an invasion of Europe. The neutral country of Belgium was invaded and occupied by German forces in 1940. This occupation lasted until 1944, when Belgium was liberated by the Canadian, American, and British forces. The liberation by Canadians in World War I and World War II has created an everlasting affection for Canadians by the Belgian people. The two liberations greatly strengthened Canada-Belgium relations as well. After World War II, Belgium played a key role in the development of the North American Treaty Organization (NATO), Benelux, the European Economic Community (ECC), and the United Nations (UN). The primary issues in Belgium were language, economic, and political differences between the Flemish and Walloon peoples lead to peaceful division in Belgian society. Also, Flanders went through an industrialization period, and became very successful economically and politically dominant in Belgium, over taking Wallonia in terms of political and economic power. It is during this time the Wallonia region of Belgium went through economic down turns due to failure of the coal and steel industries, which the Wallonia economy was dependant on. In the 1988-89-time period, the Belgian Constitution was amended and as a result of it, sweeping political changes occurred across Belgium. The Constitution of Belgium was also amended in 1993, revamping the parliamentary system and the electoral system as well. 1.4 Standard Belgian Working Week Belgian employment policies allow for employees to have a dynamic, flexible, and protected workforce. All Belgian workers receive excellent illness and unemployment protection. The standard working week in Belgium is Monday to Friday, with 40-hours of work plus overtime. However, this standard working week is altered for numerous public holidays. Official public holidays in Belgium include: New Year’s Day, Good Friday, Easter Monday, Labour Day (May 1st), Christmas Day, 7

Armistice Day (Remembrance Day – Nov. 11th), All Saints Day (Nov. 1st), National Holiday (July 21st), Pentecost (7th Sunday after Easter), Pentecost Monday (8th Monday after Easter), Ascension Day (6th Thursday after Easter), Assumption of Mary (August 15th).

1.5 Educational System Belgium has a strong education system, with approximately 99% of the total population above the age of 15 being literate. In Belgium, parents of students (in basic and Secondary schools) have the option of sending their child to be schooled in one of the three main languages (French/German/Dutch) in either community owned schools, subsidized public schools, or public Catholic schools. The majority of students currently attend public Catholic schools. Post-secondary or tertiary education is fairly well attended with roughly 300,000 students enrolled. It is a law in Belgium that school is compulsory between the ages of 6 and 18 years. The Belgian education system runs the same way throughout the nation, there are three stages to our system. Stage one is known as Basic Education. This particular stage consists of Pre-School, for students under the age of 6; and Primary School, which is for students between the ages of 6 and 12 years. Following the Basic Education stage is stage 2, which is Secondary School or High School. This stage is meant for students aged 12 to 18 years. After graduation from Secondary School, education is no longer mandatory, however, most graduates will continue on to stage 3 of the educational system, which is known as higher learning. This stage is composed of University and/or a Vocational University or Trade School. According to a study of OECD countries’ educational systems, Belgium has the third greatest rate of 18-21 year old citizens enrolled in postsecondary educational institutes, which gifts us one of the most talented, bright, and intelligent modern workforces in the world. 1.6 Health in Belgium In Belgium, the overall quality of the health care system is among the greatest in the world. The Belgian healthcare system gives our citizens access to world leading treatments in fertility treatments and heart and lung transplants. Our health care system is funded through both social security as well as taxation. As a testament to the strength of health care in Belgium, the current life expectancy is 78.51 years at time-of-birth, with a life expectancy at birth of 76.35 years for males and 82.81 years for females according to 2011 actuarial estimations and, the birth rate in Belgium is 10.06 births per 1’000 citizens. Also, there is one doctor per every 239 Belgian patients, one of the best doctors–patient rates in the world

8

2. Political Information This section of the trade manual will review the political environment of Belgium. Specifically, it will be analyzing how the government is elected and how it works, the different branches of the government, the political history, corruption in the government, the stability of the government, major political parties, Belgium-Canada relations, the electoral system, current political officials, current political issues, and international political affiliations.

9

2.1 The King The Kingdom of Belgium is parliamentary democracy under a constitutional monarch. Albert II, who was crowned in 1993, is currently serving the role of the monarch. The King serves as a titular head of state, simply playing a ceremonial and symbolic role in Belgium’s politics and national unity. The primary political function of the King is to designate elected political leaders, following an election into forming an operational government. The King also oversees the parliamentary vote of no-coincidence followed by the resignation that operational government. 2.2 Government The Belgian Parliament is a bicameral system, consisting of the upper house, the Senate and the lower house, the Chamber of Representatives. In the Chamber of Representatives, 150 directly elected members represent constituencies across the country. The Belgian Senate currently has 71 elected members. The Belgian government has three branches: the judicial, the executive, and the legislative branches, which are designated to three different levels of government: national/federal, provincial, and regional/municipal. The executive branch of the Belgian government consists of the King (Head of State), the Prime Minister (PM) (Head of Government), and the Council of Ministers (PM’s Cabinet). The purpose of the executive branch is to make final decisions in matters involving Belgian governance and policy. One of the duties of an incumbent Belgian Prime Minister is to chair his appointed Council of Ministers, which consists of the ministerial heads of different executive departments (i.e. Agriculture, Foreign Affairs, etc.). The Belgian government’s legislative branch utilizes a bicameral parliament, whereby both a Senate and a Chamber of Representatives are actively engaged in the establishment of the laws, policies, and constitutional reform of Belgium. The parliamentary system’s duties are to enact legislation(s) and acquire and manage government monetary funds. The purpose of the Chamber of Representatives to vote on motions of confidence, budgets, and issues pertaining to new or evolved Belgian laws and policies. The purpose of Belgium’s Senate is to deal with long-term matters and to provide final thoughts, reform, and to vote on laws and policies that have been passed through the Chamber of Representatives. The Prime Minister and his Council of Ministers (PM’s Cabinet) must administer the government and their specific public services (i.e.-Agriculture). Each cabinet member must defend his or her policies in person before the Chamber of Representatives.

10

Our country’s judicial system is modeled after the French legal system used under the rule of Napoleon Bonaparte, one of many remnants of Francophone culture and political ideals that were left after France’s occupation of Belgium. The way the judiciary system is based on the severity of the crime that is in question. Minor offenses committed in Belgium are to be resolved with judicial tribunals in local municipalities. Examples of some minor offenses include crimes like j-waking, public intoxication, vagrancy, and littering. Civil lawsuits and offenses to a more serious degree such as assault are dealt with by district courts of first instance. Verdicts that are rendered by these district courts may be appealed before the 5 regional courts of appeal in Antwerp, Mons, Liege, Brussels, and Ghent. If a committed offense may be punishable by incarceration for over 5 years in time, it must be handled by the eleven courts of assize; provincial court. Each Belgian province has a court of assize, which is the equivalent of provincial or territorial court in the Canada judicial system. In the Belgian judicial system, the highest levels of court are the 5 civil and criminal courts of appeal (Antwerp, Brussels, Ghent, Liege, and Mons) and the Supreme Court of Cassation. The primary purpose of the Supreme Court of Cassation is to verify that the law has been properly applied and interpreted by lower levels of the Belgian judicial system. When any citizen is arrested, they can be detained for a maximum of 24 hours after arrest, providing that they see a judge within that 24 hour time period. Also, detainees have the right to an attorney, to confront witnesses, to appeal, and to prevent evidence. In the case of an error in the judicial procedure, such as stolen evidence or any other factor that could be seen as a cause of an unfair trial for the defendant, the final decision is over ruled. Generally, criminal punishment issued by the judicial system is harsh but fitting to the crime committed. Like Canada, Belgium does not have a death penalty. It was removed as a method of punishment in 1996, and has since been replaced with the punishment of life sentences. Belgium is a country that has a high amount of trade unions. These organized labour unions due have an influence on the politics and operation of the country, as they serve as sizable interest groups. Since around 53% of all Belgian employees are unionized labourers; these unions have established such a great volume that their stance on a certain issue in Belgium society can greatly affect the outcome. For example, it is not uncommon for Belgian labour unions to take positions on public finance, defence spending, education, environmental, and other issues. However, these unions pose little threat to international business as they deal mostly with issues pertaining to the Belgian home front, not foreign affairs or policies.

11

2.3 The Electoral System In Belgium, the Chamber of Representatives has 150 seats that are elected and held by Members of Parliament (MPs) from 11 electoral districts (similar to provinces), each being given an amount of seats in proportion to its local population. The Senate has a total of 71 seats, with 40 being elected directly, 21 elected by the regional/municipal parliaments, and 10 are elected by the remaining senators. Belgium has no national parties that operate on both sides of the linguistic divide (Flanders (Dutch) and Wallonia (French). Instead, Dutch-speaking Flemish parties can only be voted for in Flanders and Francophone parties can only be voted for in Wallonia. The exception being that both parties can be voted for in Brussels, a bilingual region of Belgium. Each party assigns a candidate to a specific constituency. The total amount of individual votes a candidate of a party receives is the determining factor to whether that candidate gets elected or not. At the end of an election, the party with the most seats creates a coalition with the remaining parties to form the government under the supervision of the incumbent monarch. The coalition government occurs because an absolute majority for any political party in parliament is not permitted due to the different regional representation of political parties in Belgium. 2.4 Regional, Provincial, and Local Government The country of Belgium is divided into 10 distinct provinces and 589 municipalities in addition to the three regions (Wallonia/Brussels/Flanders). Belgium’s 10 provinces are situated in both Flanders and Wallonia. The Flemish provinces are Antwerp, Limburg, Flemish Brabant, East Flanders, and West Flanders. In Wallonia, the provinces are Hainaut, Walloon Brabant, Namur, Liège, and Luxembourg. Each provincial government has a governor that is appointed by the Head of State, the King. However, Belgian provincial and municipal/local governments do not have as much power as regional governments. Regional governments (Wallonia, Brussels, Flanders) have jurisdiction over transportation, public works, water policy, cultural matters, education, public health, environment, housing, zoning, economic and industrial policy, foreign trade, agriculture, and oversight of provincial and municipal governments. Regional governments are reliant on a revenue sharing system with the federal government and the levying of taxes and contract loans as a source of monetary funding for regional government operations. 2.5 Political History The Kingdom of Belgium officially gained its independence from the Netherlands in the year 1830 after many centuries of oppression and occupation from various empires and individual rulers. In 1831 Belgium’s constitutional monarchy was established and a German monarch was invited to take power 12

of our country. Since then, it has been amended on a few occasions to improve and better the Belgian political system. In 1988 to 1989, the Constitution was amended to provide additional responsibilities to the regions and communities. Another constitutional reform took place in 1993, where Belgium was officially changed from a unitary to federal state and the legislative system was changed, to better represent the evolution of the needs of Belgian citizens. 2.6 Current Political Officials As of June 2010, Belgium’s current political situation is stable, with limited causes for concern for Sweets. Below is a current list of key figures in Belgium’s political theatre, including the Head of State, Head of Government, and the Council of Ministers: Head of State – King Albert II Head of Government – Prime Minster Yves Leterme Minister of Foreign Affairs and Institutional Reforms – Steven Vanackere * Minister of Finance and Institutional Reform – Didier Reynders * Minister of Social Affairs and Public Health – Laurette Onkelinx * Minister of Labour and Equality, Migration and Asylum Policy – Joelle Milquet * Minister of Budget – Guy Vanhengel * Minister of Civil Service and Public Companies – Inge Vervotte Minister of Justice – Stefan De Clerck Minister of Defense – Pieter De Crem Minister for Self-Employed, Agriculture, and Scientific Policy – Sabine Laruelle Minister for Pensions and Large Cities – Michel Daerden Minister of Climate and Energy – Paul Magnette Minister of Development Cooperation – Charles Michel Minister of Interior – Annemie Turtelboom Minister of Enterprise – Vincent Van Quickenborne {Astrix (*) above denotes the title of Vice Prime Minister) 2.7 Political Parties As previously discussed, Belgian political parties are divided into Dutch-speaking regions, Francophone regions, and Brussels. For example, a Francophone can only be voted for in Wallonia and the bi-lingual region of Brussels. The main types of parties are Christian Democratic, Greens, Socialists, Nationalist, and Liberal Democrats. The major political parties in Belgium are as follows: (In no strategized order of power) 13

-

Party Name – Abbreviation (Language) {Type of Party} Christen-Democratisch & Vlaams – CD&V (Dutch) {Christian Democratic} Vlaamse LIberalen en Democraten – VLD (Dutch) {Liberal Democrat} Sociaal Progressief Alternatief – SP.A (Dutch) {Socialist} Vlaams Belang – VB (Dutch) {Nationalist} Groen – GN (Dutch) {Green} Mouvement Réformateur – MR (Francophone) {Liberal Democrat} Centre Démocrate Humaniste – CDH (Francophone) {Liberal Democrat} Parti Socialiste – PS (Francophone) {Socialist} ECOLO – EC (Francophone) {Green} Front National – FN (Francophone {Nationalist}

2.8 International Political Affiliation Despite our country’s small size, Belgium is a key figure in international relations and plays a significant role in most European organizations. The capital city of Belgium; Brussels, serves as headquarters to the North American Treaty Organization (NATO) the European Union (EU) as well as being the headquarters to a wide variety of renowned multinational corporations and trade lobbyists. Currently, Belgium is a member of the following major international organizations: Benelux Economic Union (Benelux) The Council of Europe (CE) Economic and Monetary Union (EMU) European Investment Bank (EIB) European Union (EU) Group of 9 (G9) Group of 10 (G10) International Chamber of Commerce (ICC) International Criminal Court (ICCT) Interpol International Labour Organization (ILO) International Olympic Committee (IOC) International Trade Union Conference (ITUC) International Monetary Fund (IMF) North Atlantic Treaty Organization (NATO) Organization for Economic Cooperation and Development (OECD) 14

United Nations (UN) – UNESCO, UNCTAD, UNHCR, UNIDO, UNIFIL, UNMIS Western European Union (WEU) World Customs Organization (WCO) World Health Organization (WHO) World Trade Organization (WTO) 2.9 Belgium - Canada Relations Over the course of their individual respective histories, Belgium and Canada have maintained excellent and peaceful relations. The relationship between our two nations has been based on the bonds of friendship and trust, as well as the shared values of tolerance, solidarity, liberty, and democracy. Belgium - Canada relations were greatly strengthened as a result of Canada’s great contributions to the liberation of Belgium in both the First and the Second World Wars from foreign oppression. The significant converging of foreign policies such as multilateralism, promotion of good governance, and the maintenance of strong northern hemispheric ties also strengthened Belgian – Canadian relations. Canada’s significant role in the liberation of Belgium from foreign oppression and occupancy in World War I and World War II has ignited a great affection and admiration of the great nation of Canada and its peoples from Belgians of all ages, an admiration that still exists today. Both of our countries are serve as active participants in issues of international peace and security, with both countries recently participating and cooperating in the Afghanistan and Libyan conflicts. Both countries actively participate and cooperate together in international organizations, including the United Nations (UN), the Organisation Internationale de la Francophonie (OIF), the Organization for Security and Cooperation in Europe (OSCE) and the Organization for Economic Cooperation and Development (OECD). Both Canada and Belgium have foreign representation in each other’s nation. Belgium has an embassy in Ottawa and a consulate in Montreal and Toronto. In addition, there is a network of honourary Belgian consuls operating in the Canadian metropolises of Halifax, Edmonton, Quebec City, Vancouver, and Winnipeg. The Government of Canada currently holds three diplomatic missions in the Kingdom of Belgium: the Embassy of Canada to the Kingdom of Belgium, which is located in Brussels, a Canadian consulate in Antwerp, and a Francophone Delegation for Quebec in Brussels. Belgium’s foreign representative in Canada is Ambassador Bruno van Der Pluijm and Canada’s representative in Belgium is Ambassador Louis de Lorimier.

15

2.10 Current Belgian Political Issues Belgium has experienced its fair share of small issues over the past years, some of them having a very miniscule affect on our international business and trade policies. Obviously, the recent financial crisis or recession that has wreaked havoc on the world’s financial stage also had a negative affect on the Belgian banking and financial systems. However, this initiated a government supported motion towards improving the security and conduct in the operations of Belgium’s banks and financial systems. Other seemingly greater issues include minimizing ongoing linguistic tensions between the Flanders and Wallonia regions, dealing with third-world immigration to Belgium, and improving the climate for foreign direct investment into our country. Belgium is similar to Canada in the way that there are two official languages in the countries and because of this, both nations have experienced a linguistic divide amongst their populous. In Belgium, slight tensions exist between the Dutch-speaking Flemish people and the French-speaking Walloons. Although this issue has not created much cause for concern, it is important that the Belgian government maintains strong national unity, despite the linguistic divides that we have experienced. Belgium prides itself on being a nation of many languages and ethnicities, much like Canada does, and it is a part of our storied heritage. The government task of improving the climate for foreign investment in Belgian is another political issue that has been undertaken by the Ministers of Enterprise, Foreign Affairs, and Finance. Despite the fact that our foreign investment climate has been proven to have provided great return on investment, we believe that we can establish an even better climate for foreign investment. A better climate for direct foreign investment will bring future financial prosperity and balance to both Belgium and the potential investor. To successfully achieve this goal, more incentives and tax breaks will be offered by the Belgian government to foreign investors. Currently, Belgium’s government is fairly stable and there is little cause for concern in that sector. 2.11 Corruption in Belgian Politics Fortunately, the Belgian political system has avoided major corruption scandals. Currently, we are ranked 21st out of 180 countries in Transparency International’s Corruption Perceptions Index for 2009. The threat of corruption in Belgium is currently perceived as minimal, as most corruption cases involve passive bribery.

16

3. Economic Information The following section of the trade manual is an analysis and review of the economy of Belgium. It consists of an overview of the Belgian economy, the Belgian currency, the economic history, the consumer market, importing and exporting, Belgium-Canada trade relationships, the banking system, and regional economic differences.

17

3.1 Overview of Belgian Economy Belgium has one of the most open economies in the world. It is a highly advanced and modernized economy that is primarily private enterprise based, but still has public corporations that operate within country limits. Our country is a high-income earning member of the Organization for Economic CoOperation and Development (OECD) and one of the world’s largest trading nations (3% of all international trade). Belgium’s economic success is reliant on the exporting of goods and services, and how we have managed to capitalize on our central location in Europe, our diversified industries, and our highly developed transport network. Approximately 70% of the European Union’s 500 million inhabitants and many of Europe’s largest metropolises such as London, Amsterdam, Berlin, Paris, Geneva, Zurich and Vienna are all within a 600-kilometre radius of Belgium. This proximity gives Belgium easy access to a very large and wealthy consumer market, which is drawn towards Sweets Corporation’s respective products. Due to its central location in Europe and the ease of accessibility via an excellent continental transportation infrastructure (road, inland navigation such as rivers and canals, rail, air and sea), it has become a major point of entry for distributing a wide array of international goods on their way to respective European markets. Usually, raw or semi-finished goods come to Belgium where they are processed into finished goods, and then exported to primarily European Union countries. Belgium has a long tradition of having strong anti-protectionist policies combined with a hospitable, open trade investment climate, which is one of the many reasons why our country has become a hub for international business and investment. Despite our open economy, Belgium has still managed to remain competitive. Recently, our economy was ranked as the 19th of 139 countries in terms of global competitiveness. Our economy and banking system recently suffered negative growth as a result of the world-banking crisis. This resulted in an inflation rate of 2.302% (2010), compared to an inflation rate of 0% in 2009 and 4.6% in 2008, according to International Monetary Fund (IMF) statistics. The world-banking crisis was also the cause of Belgium’s increased unemployment rate of 8.364%. However, this unemployment rate does not account for the recent graduates of post-secondary institutes that have just commenced their search for a vocation. Also, our current active labour force size is approximately 5.02 million people, and this labour force is more importantly considered to be among the most productive, hard working, and educated in the world. In order to combat the damage suffered by the financial crisis, the Belgium government has developed and is currently applying the Belgian Stability Program, which is currently aiming at obtaining a balanced budget by 2015 at the latest.

18

3.2 Belgian Currency Currently, Belgium uses the currency of the Euro (€ - EUR), a common currency for usage in nations that are members of the European Monetary Union. Our country’s original currency was the Belgian Franc (BF), which was in circulation until late 2001, when the European Monetary Union introduced the Euro as a currency, to which Belgium adhered too in January 2002. Since the induction of the Euro as a common currency throughout the European Monetary Union nations, it has developed into one of the most consistent and strong currencies in the world. Even with the financial crisis, it managed to hold its ground in terms of value and inflation rates. The exchange rate between the Euro and the Canadian Dollar is – $1.00 CAD equals € 0.716 EUR as of June of 2011. 3.3 Economic History As previously discussed, the different regions of Belgium each have experienced rich and prosperous histories at time. Typically, either Wallonia or Flanders has been more economically successful than the other at certain points in time. From the independence of Belgium up until around World War I, the region of Wallonia underwent an industrial boom, primarily around the coal and silicon industries, while Flanders was not as prosperous since its economy was primarily agriculturally based. Between World War I and World War II, Flanders went through a period of rapid development and economic growth. This growth continued through the remainder of the 20th century as Belgium developed into a central location for European trade and foreign direct investment. After brief economic downturns and recessions in the 1980s and most recently in 2008, the Belgium economy is seeing steady and stable growth. 3.4 Belgium’s GDP Belgium’s total gross domestic product in 2010 was estimated to be $535.5 Billion USD, with a real GDP growth rate of 1.973% in 2011, a GDP per capita of $49,636.00 USD and a GDP per capita (PPP) of $36,800.00 USD. The strength of Belgian’s economy is reliant on the service sector, which comprises a total of 77.4% of Belgium’s total GDP, with the remaining amount being the manufacturing industry at 22% of total GDP, followed by 0.6% of total GDP earned from the Belgian agricultural industry. We boast one of the highest GDP per capita in comparison to the rest of the world, just one of many reasons why our economy still remains strong after the global financial crisis of 2008, which slowed our real GDP growth to 1.973%.

19

3.5 Belgian & European Consumer Market Belgium and other European countries have a very sophisticated consumer market that demands high quality, innovation, and uniqueness for their products. As a result of the steady increases of wealth, consumers across the continent of Europe are constantly demanding new luxury products. Also, there is a growing demand and interest in international high quality products, creating many new opportunities for potential Canadian investors such as Sweets Corporation. As the wants and demands of the consumer becomes increasingly individual, businesses face constantly changing market conditions. Shorter product life cycles are creating new challenges in market, resulting in a competitive but easily penetrable market for experienced and intelligent businesses. Since Belgium and Europe have an aging population with median ages of 40 years plus, a market segment is presented with a high disposable income and purchasing power that looks for higher quality products. Sweets Corporation will most definitely be able to succeed in the Belgian and European consumer market, for a number of reasons. Primarily, it is the consumer desire for high quality, foreign products, such as the ones that Sweets offers. As a result of this desire for foreign and high quality, these products have proven to be successful in the European market. Sweets will also be successful in the European market because of their strong business management style. In order for a food company to be successful in the European market, it must quickly adapt to the rapidly evolving market conditions and the ever-changing needs of the consumer, something that Sweets has demonstrated as strength in the Canadian, American, and United Kingdom food industries. A strategic concept that is of importance to the Belgium consumer market is that the reception and success of a particular product is dependant on what region of Belgium (Brussels/Wallonia/Flanders) it is released to. For example, Flanders is more economically prosperous than Wallonia, giving Flemish consumers higher total disposable income. As a result of this, Flanders has a more advanced and sophisticated consumer market that would serve as a better target market for Sweets. Also, Brussels and other modern-urban Belgian cities have become very open to international cuisines, flavours and products; another opportunity that Sweets can take advantage of, if they address the diversity of Belgium’s regions and their languages and tastes. 3.6 Belgian Importing/Exporting As previously discussed, a substantial amount of Belgium’s economy is in the sector of international trade and business. Belgium’s open economy, advanced transport system, and location have made it a central hub for international trade. Most imports to Belgium occur in some of our world-class ports, 20

such as Antwerp, Zeebrugge and Ghent, to name a few. Belgium’s major imported goods include raw materials such as diamonds, machinery and equipment, chemicals, pharmaceuticals, foodstuffs, transportation equipment and oil products. In 2010, our total import value was estimated at $290 billion CAD. Belgium’s largest import partner nations are the Netherlands (17.93%), Germany (17.14%), France (11.69%), Ireland (6.26%), U.S.A. (5.74%), U.K. (5.07%), and China (4.09%). In 2010, it was estimated that Belgium exported approximately $285 billion CAD worth of goods and services, resulting in a very miniscule trade deficit of around -$5 billion CAD. Our countries major exported products that year were mainly machinery and equipment, chemicals, finished diamonds, metals and metal products, and food products. These exports were sent to our largest export partners, which are Germany (19.58%), France (17.71%), the Netherlands (11.84%), U.K. (7.21%), U.S.A. (5.37%), and Italy (4.77%).

(The left pie chart is Belgium’s export partners and the right one is Belgium’s import partners: both in 2007)

3.7 Belgian-Canadian Economic and Trade Relations Canada and Belgium have had a very strong economic relationship in the past. They have been maintained by solid relationships based on strong trade agreements and a good history of affection and friendship. In terms of bilateral trade, Canada and Belgium have been very successful together. For example, in 2009 Belgium ranked as Canada’s eleventh largest export market in the world. Also, among Canadian merchandise exports to the European Union, Belgium was Canada’s fifth most important market. In 2010, Canadian exports to Belgium totaled an amount close to $2.514 billion CAD, with Canada’s imports from Belgium valued at $1.719 CAD. Canada’s major 21

imports from Belgium include minerals, chemicals, mechanical machinery, fuels, mineral oils, vehicles, pharmaceutical products (top import), vehicle parts, reactors, boilers, food, precious metals and stones, industrial metals, plastics, and rubber products. Belgium’s major import products from Canada are precious metals and stones (30% of Canada’s total exports to Belgium), chemical products, miscellaneous grain and seed, ores, slag, ash, mineral products, industrial metal products, mechanical machinery, electrical products, vegetable products, vehicles and vehicle parts, fruit products, a wide variety of food products, and furs. In addition, both countries also share a strong bilateral investment, with Canadian direct investment to Belgium valued at $1.097 CAD and Belgian direct investment in Canada being worth over $3.617 billion CAD over the course of 2010. Currently, over 70 Belgian subsidiaries exist in Canada, with a similar amount of Canadian subsidiaries operating in Belgium. These strong economic relations have presented the opportunity for Belgium and Canadian companies and other institutions to collaborate in co-relation to the fields of science and technology, including the sectors of microelectronics, environmental, and imaging technologies. 3.8 Banking System Belgium’s banking system struggled as a result of the financial crisis of 2008. However, it has recently shown signs of improvement as a result of recent reforms in the banking system. Banks in Belgium offer a wide variety of different services, including savings account, credit cards, investment banking, mortgages, loans, and insurance. ING, Dexia, Fortis, and KBC are the “big four” in Belgium; the four largest banks. Usually, banks in Belgium are open from 9 AM to 4 PM with a 1-hour lunch break from 12 PM to 1 PM. However, some banks may have different operating hours depending on which day of the week it is. 3.9 Regional Economic Differences The three regions of Belgium all differ in the sector of economics. Below is a brief summary of each region’s economy. Brussels The Brussels economy is primarily service-based, as it serves as the headquarters of many multinational corporations and significant international institutions. It has the regional highest GDP per capita in Belgium. However, these numbers are somewhat inflated due to residents of Wallonia and Flanders working in Brussels.

22

Wallonia Historically, Wallonia’s economy has been based on primary and secondary industries, especially the metal industries. Since the decrease in these industries, the Walloon economy has become more diversified. Its most important industries are now space technology, information technology, biotechnology, and the production of beer, water, and chocolate. However, the industries of iron, steel, chemicals, glassworks and electrical engineering still remain in certain areas of the region. In addition, the region also has excellent exporting ports for industrial products, including the Meuse River and Albert Canal ports and Liège Airport Flanders The Flemish economy is primarily based on exports and international trade. Flanders is host to the major ports of Antwerp, Bruges-Zeebrugge, and Ghent, in addition to the Antwerp freight station. Each of these exporting centres service the exporting of the regional products and services from the local car manufacturing, telecommunications, photographic products and other industries. The tourism industry has also developed into a prominent sector of the Flemish economy with many popular tourist destinations existing in Flanders, such as the medieval city of Bruges.

23

4. Industry Specific (Food) Information The following section of the trade manual will review the current environment in the food industry in both Belgium and Europe. Specifically, it will take a closer look at the workplace regulations, tariffs, employment laws, current Canadian companies, packaging and labeling, logistics and shipping, product standards and sector leaders.

24

4.1 Overview of Food Industry and Standards The food industry is one of Belgium’s most important industrial sectors. The industry is the second largest manufacturing industry after metal, and represents 15.5% of the Belgium economy. In Belgium, the food industry provides an occupation for over 90,000 Belgian workers. The Belgian food industry focuses on the production and exporting of finished food products after importing semi-finished or raw products. The industry of food in Belgium also focuses on the development and manufacturing of high quality products. Our food industry takes the lead in processing innovation. Our country is a very attractive entry point for food businesses due to its thriving food processing industry and extensive distribution network that expands throughout the continent of Europe. It is also an attractive nation for food businesses looking to establish a greater European presence because of its ideal location in central Europe and its proximity to a one of the most concentrated and wealthy populations (European Union) in the world. Currently, the food industry in Europe is constantly growing, as consumer want and demand have created a new drive for foodstuff businesses to innovate and experiment to produce new and high quality products. A large percentage of businesses operating in the Belgium and European food markets are small, niche shops, that only operate in local, rural areas. 4.2 European Union Product Standards Since the plan for Sweets Corporation is to establish a manufacturing plant for their goods in Belgium and sell their products throughout Europe, it is of the utmost importance that Sweets Corporation adheres to strict product standards in regards to packaging, labeling, and the good itself. These laws and guidelines are under the under the jurisdiction of the European Union and are standard all across Europe with only limited exceptions in some nations. The European Union food policy is constantly becoming more and more strict in regards to the issues of better health, environment, sustainability, and management of life become more prevalent and important in European society. The consumer market of Europe demands nothing but the highest quality in their foods, and is willing to purchase these foods at premium costs. Food law in Europe at both a national and continental level dictates simply that it is the right of every consumer to safe food and to accurate and honest information about any product that they purchase. Over the past decade, the European food industry has developed strict regulations and policies towards the use of hormones, gene manipulation, the addition of colours, artificial flavouring, the addition of preservatives, emulsifiers, stabilizers, thickening agents, gelling agents, and anti-oxidants . These strict laws are in place to protect the consumer .The European consumer market is filled with over 500 million citizens, who are smart and healthy consumers, and check the quality of a certain product’s ingredients and manufacturing 25

process before making a decision. The European Union is adamant that food in their country does not have additives in excess, and that the ingredients are pure and wholesome. Also, it is very important that the processing plant maintains excellent hygiene and cleanliness, not only for the quality of the food, but surprise spot checks are common. 4.3 Product Packaging and Labeling Standards In the European Union, many rules have been put in place in the sector of labeling foodstuffs. This has been done so that European consumers may receive information on the composition and contents of products that they are purchasing and consuming. In Europe, all prepackaged goods must indicate the weight or the volume that each individual package contains using the metric system on the label. In addition, each product label must have on them: the unit price, the name of the product, the company name, nutritional facts, where and how it is processed and manufactured, methods of storage and preparation, and every single ingredient in the product. . It is a law that the writing on a label is in the language(s) of the targeted market, for example, a chocolate bar destined for the Belgian market must have Dutch, French, and German writing on it. This writing should also be clearly visible and legible, to make it easier for the consumer. In terms of packaging, the European member states have introduced legislation to reduce the total amount of packaging used in order to reduce environmental impact. Currently, Europe has introduced an incentive in an attempt to have producers of products use more eco-friendly packaging. The project is called “The Eco-Label”. It is a voluntary scheme that has the intention of promoting products that have a packaging process that reduces environmental impact. This Eco-Label is awarded to products that have packaging that meets certain environmental requirements. It would be wise for Sweets to revamp its packaging so it can meet standards to receive the right to have the Eco-Label. This could increase total sales volume due because of the European consumer markets environmental concerns causing them to buy products that have more environmentally friendly packaging. 4.4 Workplace Regulations and Employment Laws In Belgium, strict labour laws, labour agreements, work regulations, and individual labour contracts govern employer/employee relationships. Under constitutional law, women and man are to be treated fairly in the workplace, all employees have a right to unionize within certain limits, and the right to be educated about safety in the workplace and to refuse unsafe work. As of 2011, the minimum wage for workers over the age of 21 is $1,228 per month and the workweek consists of 40 hours of work

26

between Monday and Friday. The Belgian social security system includes a medical system, pension benefits, unemployment insurance, and child allowances. 4.5 Current Canadian Companies They’re not many large Canadian businesses operating in the food and beverage industry in Belgium and Europe as a whole. There are a few small to medium sized businesses in addition to the large McCain Foods Belgium, a branch of McCain Foods Inc. a Canadian corporate giant. This branch of McCain is the market leader in potato products, frozen pizza products, and ready-made meals in Belgium. 4.6 Import Tariffs Since Belgium is member of the European Union, we apply the “common customs tariff of the European Union” on any goods or services imported from non-European Union countries. This tariff is a fairly inexpensive tax that is levied on goods imported to Europe by other nations. The value of that particular tax is dependant on what the product is. For example, raw ingredients and materials have a fairly low tariff. In addition to that tariff, a value added tax (VAT) charge must be paid on imports to the European Union from foreign countries. The VAT tax is approximately 5% to 10% of the total import, and it is charged at the port of entry. 4.7 Logistics and Shipping As previously discussed, Belgium and Europe have a very advanced transport and port system. For Sweets, we have developed a basic plan of how operations will run in terms of logistical and shipping matters. Since Sweets is operating a manufacturing plant out of Belgium, it will need to receive raw or semi-finished goods in order to produce finished goods. This task is fairly simple, with Belgian ports already serving as an entry point for the world’s largest importer of raw ingredients and semi-finished food products. After these products pass swiftly through customs and inspections, they will travel to Sweets processing plant(s) in Belgium. From there, final products will be made and packaged, and then distributed through both Belgium and Europe using a very advanced transport infrastructure. 4.8 Sector Leaders As previously mentioned, most of the Belgian food market consists of small local shops. However, there are still corporations that operate in the food industry. Below is a list of current market leaders in the Belgian food industry. The list will include Sweets’ potential competitors and possible partners. Barry Callebaut – Chocolate industry. 27

Puratos – Producer of food ingredients. Cargill – Supplier of raw materials for food industry. Unilever Belgium – Food company. Kraft Foods Belgium – Food company. Danone – Food company in the dairy sector. Tiense Suikerraffinaderij – Sugar producer. Campina – Food company in the dairy sector.

28

5. Cultural Information This section of the trade manual will review the cultural background of Belgium. Specifically, it will go over the customs, food, business communications and etiquette.

29

5.1 Belgian Etiquette Guidelines Below is a list of business etiquette tips that should be followed by Sweets when operating in Belgium. It is important to follow these guidelines to display respect and intelligence in front of potential Belgium business partners. Even these rules are meant for Belgium, they are fairly continental. Business Meeting Etiquette - Appearances are very important to Belgians, dress and look the part. - Keep good hygiene, cleanliness is a matter of national pride. - When meeting a person for the first time, it entails a degree of formality. Usually, a brief handshake is the common greeting. - Always arrive on time; punctuality is a demonstration of respect, a characteristic that is valued in Belgian society. - Meetings are always formal. - Generally, first meetings are geared toward gaining a better social understanding of potential business associates. This is because Belgians typically prefer to do business with people that they know. - There is no formal ritual to exchanging business cards. Be sure to have business cards that are in French, Dutch, and German, as well as English cards. Dress Etiquette - It is suggested that men wear dark coloured conservative suits, with white shirts, and a silk tie. Men should also wear laced, polished dress shoes. - Women should wear a conservative dress or a business suit. Gift Giving Etiquette - When invited to a Belgian’s house, bring a gift for the hostess, such as flowers (not white chrysanthemums and) or high-quality chocolate. Flowers should be given in odd numbers, except 13. - Alcoholic gifts should only be given to close friends. - Any gift is to be opened immediately after it is received. Dining Etiquette - The host will tell you where to sit. - Women are to take their seats before men do. - Forks are held in the left hand, with knives being held in the right hand. - Make sure that wrists are always above table level at all times. 30

- Always eat everything that you receive, it is seen as rude and wasteful to leave food on a plate. - Since Belgians take great pride in their food, it is wise to compliment a host’s cooking. - At a restaurant, always tip to display your content. Typical amounts are between 0,50 € and 2,50 €. Business Relationships & Communications - Third-party introductions are recommended. - Always be polite and well mannered. - It is considered rude to be confrontational, be very subtle; it is a sign of intelligence - Generally, Belgians take time in selecting business associates; the first meeting is a primarily social event. - Typically, much discussion occurs before coming to a final decision. - Do not “try” to communicate in local language if you are not proficient in them. - Refrain from discussing income, politics, or religion. 5.2 Belgian Society and Culture In Belgium, family plays a central role in the lives of citizens and Belgian society. Any obligation to the family is always a person’s first priority. In, Belgian society and culture, appearances are very important. Every single detail in a person’s appearance is meticulously observed. Most Belgians dress well and usually are concerned about their image in the minds of other people. Great pride is also taken in the households of Belgian’s, where cleanliness and order are sought after. As previously discussed, the Belgian population is not homogeneous with one national identity. Instead the three predominant regions have their own particularities. Egalitarianism is an important sector of Belgian society and culture. Our country is considered to have an egalitarian society, where women and men are treated fairly and equally in all aspects of life. Strict laws have been established to prevent gender preference in society and in the workplace. Belgian culture is dependant on what region of Belgium a person is in. There are considerable differences between the main cultural communities of Flanders and Wallonia. Nevertheless, both regions are steeped in the arts, music, and folklore. 5.3 Belgian Food Belgian food is of the utmost importance to Belgian culture. Our country celebrates a unique and rich cuisine, which combines a number of ethnicities that have existed in Belgium during the past. Our food is very high quality and is usually served in very large quantities. Belgian cuisine is primarily 31

influenced by French and German cuisine. Popular foods in Belgium include chocolates, mussels and chips, waffles, Flemish stew, Charcuterie, and Luikse salad. 5.4 Travelling When travelling to Belgium the only entry document that is necessary for Canadians is a passport. With a passport, a Canadian may stay for a maximum of 90 days in Belgium. Belgium can be accessed via: car, bus, ship, train, and plane. Getting around in Belgium can be accomplished by using rail, bus/tram, car, and car by hire. The Belgian transport infrastructure is advanced and simple, so a foreigner would be able to easily adapt to it. Below is a list of quick notes and tips to remember when visiting Belgium: - The outlets are different than Canadian outlets, so bring a power converter that can use a European plug. - The calling code to Belgium is +32 and the common internet ending is .be. - The time zone in Belgium is UTC +1, which is 6 hours ahead of Toronto’s EST. - The currency in Belgium is the Euro (EUR). - All tap water in Belgium is potable. - There is an abundance of hotels, hostels, and other various forms of accommodations in Belgium. - Use etiquette rules listed above. (5.1) - The emergency number in Belgium is 112. 5.5 Health Issues Belgium is fortunate enough to avoid most health issues that the rest of the world faces. The only real issue that faces Belgium in terms of health issues, is that every winter the influenza can be caught in the country. 5.6 Political Turmoil Currently, Belgium is not experiencing any major political turmoil. The most significant political and social issue is a sense of division between the two main ethnicities, the Walloons and the Flemish. Other than that, Belgium is currently stable in the political sector.

32

6. Recommendations and Conclusions The following section of the trade manual will review the advantages for Sweets Corporation of opening a processing plant in Belgium, the challenges that they may face and how to overcome them, a suggestedstratified market entry plan for Sweets, concluding thoughts on the trade manual as a whole, useful contacts, and a works cited section.

33

6.1 Advantages of Investment in Belgium The Sweets Corporations potential plan is to open a manufacturing/processing plant in Belgium over the next few years. Below, you will find an in-depth analysis of each specific advantage of setting up a Sweets plant in Belgium Consumer Market Favours Sweets Products As previously noted, Belgium is an excellent location to manufacture products due to the potential consumer market that is easily accessible. Over 500 million inhabitants of the European Union are within a range of 600 kilometres of Belgium. Within this 600 kilometres, holds some of the world’s most powerful and wealthy economies and countries, including France, Germany, Spain, Italy, Switzerland, and Austria. Also, the major metropolises of Paris, Amsterdam, Geneva, Berlin, and Munich that receive multi-millions of tourist visits each year are situated within a close proximity. The population of Sweets potential target market is one of the factors that “sweetens” the deal of setting up a processing plant in Belgium. The targeted consumer population, which is over 500 million persons in size, is constantly seeking new unique and luxurious foreign products, has a very high average disposable income/purchasing power, and is also willing to pay premium prices for high quality, unique, and foreign products, such as Sweets’. All of Europe’s high income consumers, especially Belgians, are constantly demanding international products of high standard because of their sophisticated tastes for fine cuisine. Geographic Advantages One geographic advantage of processing Sweets products out in Belgium is the ease of terrain across both Belgium and Europe. Most of Sweets European target market is not hard to access logistically speaking because there are little geographic interruptions. Even though some of Sweets target market must be access through European mountain ranges, there are many bridges and tunnels such as the newly installed Gotthard Base Tunnel in Switzerland that can be utilized. Another geographic advantage is the mild climate of both Belgium and Europe as a whole. There winters in Western Europe are not to cold, and the summers have not been extremely hot. This prevents possible extreme weather events such as snowstorms and heat waves that could hinder logistics and transportation of goods or could potentially cause damages to the products. Transport Infrastructure Belgium and Europe present one of the worlds most advanced and well maintained transport infrastructures. There are a multitude of ways that Sweets’ goods can be distributed, including by 34

rail, truck, canal, and plane. The wide array of different methods of logistical transportation for Sweets products makes it easier for your company to operate. Strength of Workforce As previously noted Belgium has a very good workforce. Currently, the total size of our labour force is around 5.02 million people. Despite a relatively small size, it is well known as one of the most productive, hard working and intelligent work forces in the world. The characteristics of Belgium’s workforce provide Sweets with an excellent source of strong, productive, hardworking, and intelligent labourers, an asset that is necessary for success. Stable Political Environment The stable political environment of Belgium and all of Western Europe is an excellent advantage for Sweets to have. With stable governing in Belgium and surrounding nations, Sweets will not have to worry over potential political issues that could cause a loss in revenue. International Presence The presence of international organizations such as the European Union and the North Atlantic Treaty Organization and many different multinational corporations is a small advantage for Sweets establishing a plant in Belgium. With so many international functions occurring within Belgium, Sweets can potentially gain business partners that can help them with expansion into other consumer markets such as Asia, Africa, Oceania, and South America. Established Country for International Trade The fact that Belgium is an established country for international trade is just one out of many advantages of setting up a plant in Belgium. Already, Belgium is not only known as a nation for international trade, but internally, the country is very supportive of international trade providing a very supportive and safe investment environment for Sweets to gain a greater presence in the food market of Europe 6.2 Suggested Market Entry Plan The goal of Sweets market entry plan is to have a continued growth of sales of 5% per year over the next three years. By opening a plant in Belgium in future months, it is the honest and unbiased opinion of my team and I that they will be able to perform even better than their target goals.

35

However, it is needless to say that these target goals can only be achieved when using a well thought out market entry plan. Below is an example of a market entry plan for Sweets. Obviously, if Sweets decides to open a plant in Belgium and do business across the continent of Europe, you will modify it to your demands and requests. Basic Market Entry Overview: Sweets Corporation (Canada) - Example The type of market entry strategy that Sweets will be using is a hybrid of both a joint venture and exporting. Sweets will be establishing a processing plant in Belgium that is independently operated. This plant will be located in the region of Wallonia because of the many potential locations that can house a Sweets plant and the proximity to transportation ways and markets. Sweets unique and quality ingredients will be imported through one of Belgium’s ports, preferably Namur or Liège using their pre-established connections that are used to export ingredients to the United Kingdom. This processing plant will be tasked with the manufacturing of the product, as well as the labeling and packaging of the product. Sweets will be in a joint venture with one of the major European retailers, who will be tasked with the distributing Sweets goods across most of Europe at their locations. 6.3 Problem Solving There are some issues that are associated with operating a processing plant in Belgium and selling goods to the European consumer market. Below, some of the possible problems that Sweets may face are presented, analyzed, and solved. Consumer Market Changes The Belgian and European consumer market is a different market than North American and UK food markets. Manufactures of food related goods and services are constantly being faced with changing market conditions. The demands and wishes of the consumer populous as a whole are becoming increasingly individual. The life cycles of products in the European consumer market are constantly generating new challenging tasks in the market. In order to overcome these rapidly occurring changes Sweets will have to be very adaptable and in-tune to the wants and needs of the consumer not only in Belgium, but also in other target markets such as France, Germany, Switzerland, Luxembourg, Italy, the Netherlands, Denmark, and other European nations. With

36

Sweets pre-established business management suave, the issue of changes in the consumer market should not be of concern. Strict Food Laws One issue that could is not of particular concern to Sweets is the strict food laws and standards that are imposed by the European Union. These laws and regulations are applied to the food processing industry. The European food industry has developed strict regulations and policies towards the use of hormones, gene manipulation, the addition of colours, artificial flavouring, the addition of preservatives, emulsifiers, stabilizers, thickening agents, gelling agents, and anti-oxidants. This should not be too much of an issue for Sweets considering that their goods use nothing but the most wholesome and natural ingredients. Cultural Division Although the issue of cultural division within European country is not too prominent in their respective nations, it can be a ticking time bomb waiting to explode when it is brought up. For Sweets, it is important to be respectful of all different European cultures and ethnicities in their products: ingredients, packaging, and labeling. Also, it is imperative that any taglines or product names associated with Sweets product are translated from English to the other language carefully. Any word that is different in a certain language that it is in English could offend the consumer population and cause losses of revenue. 6.4 Conclusion My team of trade representatives for Belgium hopes that this trade manual has educated the Board of Directors of Sweets Corporation on the many advantages of establishing a plant in Belgium. With a stable political, economic, and industry specific environment; tens of millions of dollars in potential revenue, and copious amounts of advantages, the opening of a Sweets plant in Belgium would be a highly lucrative investment for Sweets. 6.5 Contacts Below is a detailed list of contacts that could be of great use to Sweets in obtaining additional information or potential business associates in the process of opening a plant in Belgium. (Note: Contact list is directly resourced from Government of Canada Trade Reports) Top Belgian Food Retailers Carrefour Belgique M. Christophe Echivard, Purchasing Manager Avenue des 37

Olympiades/Olimpiadelaan 20 1140 Brussels Belgium Tel.: +32 2 729 21 11 Email: christophe_echivard@carrefour.com Colruyt Mr. Dirk Depoorter, Purchasing Manager Mr. Claude Romain, Sales Manager, Edingensesteenweg 196 B-1500 Halle Belgium Fax: +32 2 360 02 07 Tel.: +32 2 360 10 40 Email: dirk.depoorter@colruyt.be Delhaize Group Département Fournisseurs Rue Osseghem, 53 1080 Bruxelles Belgique Tel.: +32 2 412.21.11 Email: suppliers@delhaize.be Other website Canadian Contacts Canadian Embassy in Belgium 2 Avenue de Tervueren 1040 Brussels, Belgium Contact: Paul Vanbosterhaut, Trade Commissioner Tel.: (32-2) 741-0616 Fax: (32-2) 741-0606 Email: paul.vanbosterhaut@international.gc.ca Mission of Canada to the EU, Brussels 2 Avenue de Tervueren 1040 Brussels, Belgium Contact : Mrs Tina Milanetti Counsellor Tel.: (32-2) 741 0610 Fax: (32-2) 741 0629 Email: tina.milanetti@international.gc.ca Agriculture and Agri-Food Canada Agriculture and Agri-Food Canada Europe, Middle East and Africa Division 1341 Baseline Road, Tower 5, Floor 3, Room 100 Ottawa, Ontario , Canada K1A 0C5 Contact: Scott Gordon, Senior Market Development Officer (Europe) Tel.: (613) 773-1624 Fax: (613)-773-1666 Email: scott.gordon@agr.gc.ca Canadian Food Inspection Agency 59 Camelot Drive Ottawa, ON K1A 0Y9 Tel.: 1-800-4222342or (613) 225-2342 Fax: (613) 228-6125 Foreign Affairs and International Trade Canada Janet Dorozynski Trade Commissioner, Canadian Wine, Spirits and Beer Business Sectors Bureau and International Business Opportunities Centre (BMM) T: 613-944-0181F: 613-943-8820 Email: janet.dorozynski@international.gc.ca

38

6.6 Works Cited "Agri-Food Past, Present and Future Report - Belgium." Agri-Food Trade Service | Service D'exportation Agroalimentaire. Department of Agriculture and Agri-Food Canada, 27 Jan. 2011. Web. 06 June 2011. . "Belgium - Language, Culture and Doing Business Etiquette." Professional Translation Services | Interpreters | Intercultural Communication & Training. Kwintessential, 26 Mar. 2009. Web. 06 June 2011. . "Belgium: Economy." Infoplease: Encyclopedia, Almanac, Atlas, Biographies, Dictionary, Thesaurus. Free Online Reference, Research & Homework Help. — Infoplease.com. Pearson Education, 2007. Web. 06 June 2011. . "Canada - Belgium Relations." Welcome Page | Page D'accueil. Canadian Government, 09 Dec. 2010. Web. 06 June 2011. . "CIA - The World Factbook." Welcome to the CIA Web Site — Central Intelligence Agency. Central Intelligence Agency - United States Government, 26 May 2011. Web. 06 June 2011. . Lourimer, Louis De. "Belgium - Fact Sheet." Government of Canada - Belgium Factsheet. Government of Canada, 17 May 2010. Web. 06 June 2011. . "Market Report Access - Doing Business Abroad - The Canadian Trade Commissioner Service." Doing Business Abroad - Canadian Trade Commissioner Service - Faire Des Affaires à L'Étranger - Service Des Délégués Commerciaux Du Canada. Canadian Government, 27 May 2011. Web. 06 June 2011. 39

. Peeters, Elza E. "CorporateInformation.com - Country & Industry Research Links." CorporateInformation.com - Free Corporate Profiles on 31,000 Global Companies. United States Department of Agriculture, 15 Nov. 1999. Web. 06 June 2011. .

40