EMPIRICALLY ANALYZING THE IMPACT OF U.S. EXPORT CREDIT PROGRAMS ON U.S. AGRICULTURAL TRADE

The use of officially supported export credit programs for agricultural products has been a widely debated issue at the World Trade Organization (WTO) negotiations in recent years. The European Union (EU) has agreed to reduce their direct export subsidies if the United States reduces its export credits. Specifically, the main issue of contention is whether to limit the length of repayment of the U.S. export credit programs to a period not exceeding 180 days. However, the impacts of such a reduction on the importing countries and the United States are not clear. In light of this debate, we analyze the impact of a reduction in the repayment period to 180 days on importing countries and examine the subsequent effects on U.S. exports supported through export credit programs. Our results indicate that importing countries do indeed benefit from export credit programs and are likely to increase their imports when they are in place. However, the benefits are reduced when the export credit repayment period is limited to 180 days. This implies that the more restrictive terms and conditions that the WTO is trying to impose over these programs, based on their implicitly subsidized components, may have an adverse impact on importing countries.


Issue Date:
2006
Publication Type:
Report
PURL Identifier:
http://purl.umn.edu/23644
Total Pages:
19
Series Statement:
Agribusiness & Applied Economics Report No. 592




 Record created 2017-04-01, last modified 2017-08-02

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