Draft Issue Brief

This draft issue brief examines the intersection of Export Credit Agencies (ECAs), the OECD Arrangement on Guidelines for Officially Supported Export Credits, and the WTO Agreement on Subsidies and Countervailing Measures (ASCM). It analyzes how the 'safe haven' clause in the ASCM protects OECD members' export credits from being classified as prohibited subsidies, the resulting competitive disadvantages for developing countries, and the legal precedents set by the Brazil-Canada aircraft disputes. The document also highlights the lack of comprehensive environmental and social guidelines governing ECA activities.

• The OECD Arrangement on Guidelines for Officially Supported Export Credits, established in April 1978, functions as a 'gentleman’s agreement' to prevent ECAs from competing on financial conditions. It sets limits on interest rates, maximum repayment terms, and minimum premium benchmarks across seven country risk categories, generally limiting ECA financing to 85 percent of a transaction's total.
• The WTO Agreement on Subsidies and Countervailing Measures (ASCM) generally prohibits export subsidies, but item (k) of Annex I provides a 'safe haven' for export credits that conform to the interest rate provisions of an international undertaking, specifically the 1978 OECD Arrangement. This exemption applies only to interest rate provisions and not to other supports like export guarantees, risk premia, or 'matching'.
• Developing countries face significant disadvantages due to the OECD Arrangement's structure. They often lack the economic power to compete on the same terms, face higher costs due to lower credit ratings, and have no influence over amendments to the Arrangement that may render their own national legislation WTO-inconsistent.
• The Brazil-Canada aircraft disputes established that the burden of proof for proving a subsidy's incompatibility with the ASCM rests with the plaintiff. This creates a challenge for developing countries because ECAs often keep data secret, and the WTO Appellate Body ruled that panels are not obliged to draw negative inferences from a defendant's refusal to disclose information.
• Legal rulings in the Brazil-Canada cases indicated that ECA programs are not inconsistent with the ASCM 'as such' if they do not mandate the conferral of a benefit, but rather make it discretionary. Additionally, the Appellate Body viewed the OECD Arrangement as a benchmark for determining 'material advantage' under item (k), but not necessarily for determining a 'benefit' under Article 1.1 of the ASCM.
• ECA activities frequently lack binding environmental, social, and cultural guidelines, leading to projects with severe negative impacts. Examples cited include the Three Gorges Dam in China and the Sakhalin II venture in Russia. While some improvements are noted—such as the EX-IM Bank's guidelines and compliance mechanisms in Japan and Canada—progress remains slow.

APA

Center for International Environmental Law (2003). Draft Issue Brief. https://www.ciel.org/wp-content/uploads/2015/03/ECAs_WTO_Nov03.pdf

Chicago

Center for International Environmental Law. Draft Issue Brief. 2003. https://www.ciel.org/wp-content/uploads/2015/03/ECAs_WTO_Nov03.pdf.

Wikipedia

{{cite report |author=Center for International Environmental Law |title=Draft Issue Brief |date=November 2003 |url=https://www.ciel.org/wp-content/uploads/2015/03/ECAs_WTO_Nov03.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{centerforinternationalenvironmentallaw2003draft, author = {{Center for International Environmental Law}}, title = {{Draft Issue Brief}}, institution = {Center for International Environmental Law}, year = {2003}, month = nov, url = {https://www.ciel.org/wp-content/uploads/2015/03/ECAs_WTO_Nov03.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }