offered among the OECD participants, all aid credits must contain less than a 35% grant
element of the total export credit value10.
By 1997, the key benchmarks for the credit terms and conditions of export credits
were consensually agreed by the OECD participants in establishing the principle
guidelines for the use of export credits on manufactured exports. As mentioned above,
the principle guidelines of the Arrangement have been recognized and integrated into the
multilateral trading system of the WTO, which are codified within Article 3 of the
GATT-1994 Agreement on the SCM Agreement which prohibit many forms of export
subsidization. Two specific disciplinary rulings with regard to the provisions of risk
premium are —item (j) and interest rates—item (k) of the Illustrative List of Export
Subsidies in Annex I.
Starting in 1994, the OECD Participants undertook a work program with the goal
of arriving at an understanding on disciplines for officially supported export credits on
agricultural products, which would be in conformity with Article 10.2 of the WTO’s
Agreement on Agriculture. Currently, there is no report indicating whether the
Arrangement of the OECD has reached a consensus agreement on the guidelines for the
use of export credits for agricultural products. On July 9, 2002, a progress report by the
Chairman of the Arrangement was released which stated that the OECD Participants had
not reached consensus agreements upon the content of the report (OECD, 2002).
With respect to establishing benchmarks on the use of export credits for
agricultural exports, the following elements were defined and reported within the
10 It was agreed that each Participant must notify other Participants about its offering aid credit to a
particular importing country, and that the other Participants then have the right to match it in a face-to face
consultation. However, the matching is agreed not to be in any form of underbidding. By 1991, the
Arrangement agreed to prohibit the use export credits in any form of tied or partially tied aid to richer
developing countries.
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