Is new thinking needed on export finance regulation?

(TFX News, New York, 3 February 2021) The OECD Consensus has a long history but it’s still the only game in town. With the International Working Group now in stasis, is that a problem, or is it going to focus minds on reform? The ‘Arrangement on Officially Supported Export Credits’ started out in 1978 building on the export credit ‘Consensus’ among a number of OECD countries in 1976 as a way of getting the world’s major exporting nations, in those days, the OECD countries, to agree on a level playing field for fair competition and, in the process, to rein in the huge export finance subsidies which were beginning to seem unsustainable even to the richest of them. The biggest pressures have been coming from outside the Consensus’s OECD core. Countries once indisputably not rich (e.g. China, India, Brazil, Russia and South Africa) moved from being exporters of primary goods and importers of capital goods to the opposite. Not all, but the size of the emerging exporting nations (China the biggest of them all) meant that their non-adherence to the OECD’s Consensus club created a need for a new forum. The International Working Group on Export Credits (IWG), was established in 2012 with the aim of trying to bridge the gap between them and the Consensus Participants. In November 2020, IWG technical groups were formally suspended for a year by 11 of the 18 countries (including the EU) due to the [Covid] freeze on IWG technical work. A new Secretary General has neither been so far agreed nor announced. The Arrangement has long had Sector Understandings, mini-‘Gentlemen’s Agreements’. At the moment, they cover aircraft, ships and trains plus energy and the environment (nuclear power, renewable energy, climate change mitigation and adaptation, and water projects, and coal-fired electricity). Time for new thinking is ahead. Like coral reefs, [10,000 years in development, quickly destroyed], the Arrangement is delicate, subject to abuse, but very valuable in parts to the world economy.