The ECAs of emerging economies are taking on an increasingly prominent role, prompting concerns from OECD countries that their ‘level playing field’ is being undermined.
The so-called BRIC countries – Brazil, Russia, India and China – are increasingly economically and politically powerful countries. Sometimes called the ‘big four’, the BRIC countries have come to symbolise a shift in global economic power away from the G7 and the OECD.
ECAs and BRIC countries
While the OECD has been making slow steps towards incorporating social and environmental standards into ECA activities (see the Common Approaches), BRIC ECAs are not subject to these agreements. OECD countries argue that BRIC ECAs therefore have an unfair competitive advantage as there are fewer restrictions on the way they operate.
A race to the bottom
OECD concerns about competitive conflicts with BRIC ECAs are based on the lower social and environmental standards of BRIC export credit. This argument has already led to attempts by some members of the OECD export credit working group (ECG)to water down their own standards, or at least not to strengthen them in the manner proposed by many NGOs.
European and other OECD members have held meetings with Chinese ECAs Sinosure and the China Ex-Im Bank, with the European Commission's export credits group providing "speaking lines" in an apparent effort to coordinate discussions. The question of whether discussions should continue bilaterally or under G20 auspices has been raised.