Journal of Management Research
Volume 7, Number 1 ( April 2007)
ISSN: 0972-5814 Online ISSN: 0974-455X
Export Credit Agencies: Competitive Trends in G7, Emerging Economies and Reform Issues
Robert M Maulligan
| Abstract |
This paper seeks to determine the impact of the OECD Arrangement for Officially Supported Export Credits on G7 ECA official support and make comparisons with the support activity of the non-OECD states of Brazil, India and China such that suggestions for future cooperative development can be determined. The success of the OECD Arrangement in squeezing out blanket export support subsidies within OECD member countries caused G7 ECAs to focus mainly on riskier medium-long-term support and let the private sector take the short-term and less risky medium-long-term business. Official support trends have therefore declined rapidly since 1980 although some stability appears now to have been reached. By contrast, the governments of Brazil, India and China, not being encumbered by the OECD Arrangement, are aggressively using their ECAs to support national exports in the short-medium-long-term and by 2010 these three countries will provide more absolute and relative official support than the G7. China is the most aggressive and by 2010 its support of medium-long-term exports will match that of the G7 combined. As these emerging countries exert more impact in world trade, the influence of the OECD Arrangement will decline and official subsidy support of exports will rise. Therefore discussions to develop a reform agenda for new export credit disciplines need to be undertaken. Such discussions would need to include Brazil, India and China and other countries with significant exports and effective ECAs.
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