GOP senators want to ensure foreign export credit agencies are following trade rules

Two Republicans senators want U.S. trade officials to ensure that foreign export-import banks are following World Trade Organization (WTO) rules.

Sens. Bob Corker (R-Tenn.) and Orrin Hatch (R-Utah) sent a letter on Monday  U.S. Trade Representative Michael Froman asking him to update Congress on efforts to ensure that foreign competitors are adhering with global rules. 

{mosads}They argued that recent growth in the size and scope of some foreign export credit agencies has raised questions about whether some trading partners are following WTO agreement on Subsidies and Countervailing Measures (SCM) set by the Organisation for Economic Co-operation and Development.

Corker and Hatch said failure to follow those rules could “potentially set off an export credit arms race.”

For example, under those WTO rules, export credits provided by government-authorized institutions at below-market rates are prohibited subsidies.  

The agreement also requires the credit agencies to charge certain minimum interest rates for financing.

Corker and Hatch said they support recent legislation directed the Treasury Department to pursue negotiations to substantially reduce, and ultimately eliminate export subsidies “but to date, the negotiations have not borne fruit.”

“While the negotiations proceed, it is important that the Office of the U.S. Trade Representative remain vigilant with respect to enforcement of the terms the SCM Agreement, including its safe harbor provisions, so as to prevent unfair market distortions,” they wrote.