OECD AGREES EXPORT CREDIT REFORMS
The western industrialised nations have
agreed reforms in rules by which they provide credit for
exports to developing countries, the Organisation for Economic
Cooperation and Development said.
    The reforms tighten the rules for the use of foreign aid to
subsidise export credits in so-called "mixed credits," the OECD
said.
    The agreement, to be implemented in two stages in July this
year and July 1988, means the minimum aid component in mixed
credits will be raised to 35 pct from 25 pct, and to 50 pct for
credits covering exports to the world's least developed
nations.
    Additionally, a new formula will be used for calculating
the aid element in mixed credits, to take account of different
interest rates in the exporting countries, the 24-nation OECD,
which hosted the reform negotiations, said.
    Minimum interest rates for officially subsidised trade
loans have also been revised with the aim of cutting the
subsidies, and ending them completely on loans to relatively
rich developing countries by July next year.
    The reforms follow several years of pressure by the U.S. To
stop competitors, notably France and Japan, using foreign aid
to subsidise exports, putting U.S. Firms at a disadvantage.
    OECD officials said the agreement was based on a
provisional accord reached in January subject to ratification
by member governments. Some governments, including Austria, had
linked their final approval to other trade credit issues which
would be discussed at a meeting here in mid-April, they added.
    By raising the minimum amount of aid required in mixed
credits the agreement aims to make such hidden subsidies too
costly for frequent use.
    "A major loophole in the General Agreement on Tariffs and
Trade has been closed today," a senior U.S. Official here
commented.
 REUTER
