Empirically Analyzing the Impacts of U.S. Export Credit Programs on U.S. Agricultural Export Competitiveness

Summary and Concluding Remarks

This paper looked at the on the ongoing debate on the use of public export credit
programs and their impact on US exports. The principle guidelines for government-
supported export credits on manufactured goods were consensually agreed on by the
Participants of the Arrangement after a long and gradual series of many negotiation
rounds, from 1976 to 1997. The guidelines of the Arrangement were integrated into the
WTO Rulings to discipline the use of officially supported export credit programs on
manufactured goods. However, the integration guidelines do not apply in the case of
export credits for agricultural goods, which has been the subject of negotiations after the
conclusion of the Uruguay Round and the WTO’s Agreement on Agriculture under
Article 10.2. We developed a theoretical framework to analyze the additionality
resulting from the use of export credit programs, particularly, the GSM 102 program of
the US. We incorporate both the cost savings offered to the importing country as a result
of export credits in our model. In our empirical model we test the concept of additionality
using an import demand model. Our results indicate that there are significant cost saving
benefits to the importing countries as a result of the export credit programs. There is also
an increase in US exports as a result of the export credit programs. Our results imply that
an export credit program increases quantity exported due to the shifting of the import
demand curve to the right. This contradicts other studies which claim that export credit
causes a movement along the import demand curve and a shift in the excess supply curve
to the right in order to increase quantity exported and lower the world price. However,
there is a reduction in cost savings to the importing countries when the length of
repayment of export credit is 180 days. Thus, the more restrictive terms and conditions of

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