MEMPHIS, Tenn. -- Chief U.S. agricultural trade negotiator Allen Johnson unveiled a new proposal on export credits and export credit guarantees during a recent meeting of the World Trade Organization in Geneva. The proposal, part of the Doha Round of agricultural negotiations, would place new rules on export credit and export credit guarantee programs such as those currently operated by USDA.
The proposal calls for credit terms of no more than six months for developed countries and no more than 30 months for developing countries. Currently, U.S. export credit guarantees can be for as long as three years.
The U.S. proposal would also change the premium structure charged participants. It calls for "risk-based" premiums that would be "adequate to cover long-term operating costs and losses" of the program.
In some ways, the U.S. proposal places more restrictions on export credit guarantee programs than a previous arrangement negotiated under the Organization for Economic Cooperation and Development (OECD) but never implemented. That arrangement provided for 18-month terms. However, by calling for special and differential treatment for developing countries, U.S. negotiators assert these new rules would not unduly hinder operation of the program.
A group of private-industry trade associations had been working with the Bush administration to develop a proposal on export credits, but the outline presented in Geneva went beyond the group's earlier recommendations.