IMPROVING THE ROLE OF EXIMBANKS AND ECAs IN THE

Transcript:IMPROVING THE ROLE OF EXIMBANKS AND ECAs IN THE:
IMPROVING THE ROLE OF EXIMBANKS AND ECAs IN THE OIC MEMBER STATES FOR INCREASING THEIR EXPORTS 5th Meeting of the COMCEC Trade Working Group ECAs and Their Role in International Trade Diana Smallridge, President 26 March 2015 Introduction ECAs in a general context ECA facilities and features ECAs in OIC countries Features of ECAs in OIC countries Best practices of ECAs Recommendations and Conclusions 2 ECAs in a general context 3 1 There are different kinds of institutions that can be called Export Credit Agencies Export Credit Insurance Agencies (ECIAs) insure commercial or political risks in countries to where their companies are exporting. Export-Import Banks (Eximbanks) provide lending and other facilities in support of exports, either directly to exporters or to foreign buyers to purchase national goods and services. Export Development Banks are specialized development banks that are focused on international trade and investment and are similar to Eximbanks in terms of facilities offered. 4 1 Their mandates are the same but facilities can be different The common ECA mandate is to support and encourage exports and outward investment by providing financial services in support of international trade and investment transactions Types of ECA facilities: Financing directly to exporters and buyers Financing indirectly through guarantees issued to commercial banks who lend to exporters Credit insurance to exporters and banks Support to importers to facilitate their payment obligations to exporters 5 1 ECAs are established to serve two main purposes To diversify a country’s export base and export markets By taking risks on new buyers, in new markets for new exporters By financing exporters and export transactions To fill market gaps and address market disruptions By identifying parts of the market that the private sector course of finance and insurance are unable to address, such as SMEs, or foreign buyer risks 6 1 OIC ECAs’ contributions to trade are relatively low 7 1 Competition is not between ECAs per se but between exporters Competition between exporters must be on price and quality of exporter product and service, rather than on the price of their financing Subsidized financing packages can create an unleveled playing field Two agreements reflect this understanding: The WTO and the OECD Arrangement on Export Credits The OECD Arrangement and the “safe haven” 8 1 ECAs benefit from bilaterally and multilateral cooperation Strategic Co-operation Berne Union, Prague Club, Aman Union, G-NEXID, Asian EXIM Banks Forum, COFACE Partner Network Transactional