Proposal for a Council Decision on the position to be taken by the Union in the Working Party of the Participants to the OECD Arrangement on Officially Supported Export Credits with regard to market benchmark pricing rules

The OECD Arrangement on Officially Supported Export Credits is a Gentlemen's Agreement between Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland and the United States. The main purpose of the Arrangement is to provide a framework for the orderly use of officially supported export credits. In practice, this means providing for a level playing field, whereby competition is based on the price and the quality of the exported goods and not the financial terms provided. Furthermore, it aims to eliminate subsidies and trade distortions related to officially supported export credits.

The Arrangement came into existence in 1978, building on the export credit "Consensus" agreed among a number of OECD countries in 1976. Prior to this time, the lack of rules set the stage for competition amongst governments to provide the most attractive financial terms in support of exporters competing for trade contracts resulting in the emergence of financial subsidies and potential trade distortions. The Arrangement places limitations on the terms and conditions of officially supported export credits and the provision of tied aid. The Arrangement is updated regularly taking into account inter alia, policy developments and the evolving global financial markets.

The guidelines on market benchmark pricing provide guiding in setting premium in transactions involving obligors in Category 0 countries, high-income OECD countries and high-income euro area countries. The current guidelines on market benchmark pricing in the Arrangement were put in place as part of the Malzkuhn-Drysdale Package that entered into force on September 2011. While the current guidelines provide a framework for not undercutting the private market pricing, the scope for interpretation and the emergence of different practices among participants of the Arrangement is still significant. The proposal put forward by the OECD secretariat, Chairman's Revised Proposal for Market Benchmark Pricing Rules, will give clearer guidelines and thereby improve the level playing field within the OECD.

• Primary Source

EUR-Lex: COM(2016)779: Follow the progress of this proposal through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2016:779:FIN

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