Export Credits Arrangement

Export Credits Arrangement and the GATT Policy Negotiations

In relation to the GATT Policy Negotiations, Christopher Mark (1993) provided the following explanation and/or definition of Export Credits Arrangement: Formal title is the Arrangement on Guidelines for Officially Supported Export Credits. An international understanding negotiated under the auspices of the OECD, providing the institutional framework for an orderly export credit market. Its purpose is to prevent an “export credit race” in which exporting countries compete for sales to third-country markets on the basis of their financing terms rather than on the basis of providing competitively priced goods. The Arrangement deals, with actions and policies of official export credit and insurance agencies, covering only the conditions or terms of insurance or guarantees. It limits trade finance subsidies, setting standards for minimum interest rates, maximum repayment periods, and down payments. The Arrangement took effect in April 1978, and includes all OECD member countries except Turkey. It replaced a less elaborate understanding that had been in effect among a more limited number of countries since 1976. See also Berne Union (Sec. III).