OECD Arrangement amends local content rules for export credits

(Global Trade Review, London, 27 April 2021) The decision to amend local content rules within the OECD Arrangement on Officially Supported Export Credits has been hailed as an “important step” in modernising the agreement, though industry figures have raised concerns over a lack of progress in other key areas of discussions. The OECD revealed last week that participating members of the Arrangement – which includes countries in the EU, as well as the US, Japan, Canada and Australia – had agreed to increase the maximum local cost support on offer from their ECAs. For export contracts in high income OECD countries (category one), maximum local cost provisions have risen from 30% of the export contract value to 40%. In all other nations (category two), the percentage of local costs a participating arrangement ECA can cover has been increased to 50%. A high-ranking official in the export credit sector familiar with discussions on the Arrangement, tells GTR that participating members had initially struck an agreement to amend local content rules in November. However, they say that the EU needed time to formally approve the changes as the Arrangement is legally binding in the bloc.