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.
  

