OECD

The Arrangement on Officially Supported Export Credits (the “Arrangement”) was initially negotiated in 1978 and revised most recently in 2007. The main purpose of the Arrangement is to provide the institutional framework for regulating or disciplining export credits. Among other things, it sets limits on the terms and conditions for export credits involving credit terms of two years or more, and sets guidelines for tied aid and for risk-based premium fees. In theory, it seeks to avoid competition based on who grants the most favourable financing terms, and instead encourages competition for export sales based on the price and quality of the goods and services being exported. The Arrangement is not binding on OECD members; rather, it is a ‘gentleman’s agreement’ among governments who agree to be participants.

The OECD Common Approaches on Environment and Officially Supported Export Credits

In 2000, following increasing pressure to take the environment into account in export-credit funded projects from civil society , international press attention, and ministerial mandates from the OECD itself and the Group of Eight largest economies (G-8), policy negotiations on environmental issues began at the OECD Working Party on Export Credits and Credit Guarantees (otherwise know as the Export Credit Group or ECG). In December 2001, the members of the ECG finalized a proposed set of guidelines for ECAs called the 'Common Approaches'. Despite broad agreement on Revision 6 of the Common Approaches, the US judged the agreement to be insufficient, and failed to endorse the agreement. Nevertheless, the rest of the OECD members decided to adopt the text on a voluntary basis.

 

In September 2003, negotiations were reopened in an effort to achieve consensus on the agreement. Civil society, trade unions and the business community were consulted on a draft of the document, but governments, notably Germany, Japan, Italy and Spain, all refused to allow the draft to be circulated. Countries eventually agreed to consult with civil society on an ad hoc country basis. Three months later, in December 2003, governments finally reached a consensus on the agreement, and began implementing the recommendation in January 2004. The text was further revised in 2006-2007, with articles that substantially weakened the agreement.