RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/W/47
14 November 2000
(00-4819)
Committee on Agriculture Original:  English/
                 Spanish
CONTRIBUTION BY MERCOSUR (ARGENTINA, BRAZIL, PARAGUAY AND URUGUAY)
TO THE 14-15 NOVEMBER 2000 REGULAR MEETING OF THE COMMITTEE ON
AGRICULTURE UNDER PART I, ITEM G OF THE AGENDA
The following document is a contribution by Mercosur (Argentina, Brazil, Paraguay and
Uruguay) to the deliberations of the Committee on Agriculture on the implementation of Article 10.2.G/AG/W/47
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Restricted
For Official Use Only
FTAA.ngag/w/88
May 16, 2000
Original: Spanish
Translation: FTAA Secretariat
FTAA – NEGOTIATING GROUP ON AGRICULTURE
MERCOSUR
EXPORT CREDITS  FOR AGRICULTURAL PRODUCTS
ARTICLE 1
DEFINITION AND SCOPE
1.1. Export credits for agricultural products are considered to be any type of financial activity
whose source is official resources, for the purpos e of improving and marketing agricultural products,
for export, covered by the FTAA Agreement on Agriculture.
1.2. An illustrative, though not an exhaustive list of institutions and programs to be covered by
this chapter can be found in Annex I*, and shall be periodically revised.
1.3. For the purposes of this chapter, official resources may take the form of credits, financing,
interest rates, and export credit insurance and guarantees, among others.
ARTICLE 2
DISCIPLINES
2.1. All export-related credit operations of institutions and programs involved with official
resources for agricultural products shall respect the terms of this chapter, including private and State-
owned enterprises that hold exclusive or special rights to market agricultural products, resulting from
statutory or constitutional rights, the exercise of which could affect their acquisitions or sales, or
influence imports or exports.
2.2. Terms and conditions for granting of credits
2.2.1. General Considerations
2.2.1.1. This chapter establishes the most generous terms and conditions to be used in the
context of the FTAA.  All FTAA member countries, taking into account the risk of such termsand conditions becoming common practice in domestic agricultural policies, shall adopt the
measures necessary to prevent such practices becoming generalized.
                                                     
* Not included.G/AG/W/47
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2.2.1.2. FTAA member countries shall observe the credit terms and conditions for agricultural
products that traditionally enjoy usufructuary credit terms and conditions less favorable than
those authorized by this chapter.
2.2.2. Term of payments
Pre-shipment operations
2.2.2.1. The term of payment for credit operations in the pre-shipment period is the time
between the date on which the resources are available to the beneficiary and the date of
maturity of the capital.
2.2.2.2. The term of payment for pre-shipment credit operations covered by this article shall
not exceed 90 days.
Post-shipment operations
2.2.2.3. The term of payment for post-shipment e xport financing is the time between the date
of shipment or of the delivery of the goods, invoice, commercial contract, or requirements
contract and the maturity date of the final capital installment.
2.2.2.4. The payment period for products covered by this article shall not exceed 180 days,
and may be extendable for more than 180 days at the request of the debtor country, except in
the cases listed below.  The period of extension shall be substantiated by the debtor country
and be approved by the other FTAA members.
a) Bovines for animal improvement purposes: the term of payment shall not exceed 2 years
for contracts of up to US$150,000 and 3 years for contracts in excess of US$150,000.
b) Other animals for purposes of animal improvement: the term of payment shall not exceed
12 months.c) Plant material for reproduction: the term of payment for plant material (seeds, tubers and
similar material), exported for purposes of reproduction, shall not exceed 12 months.
2.2.3. Payment of capital
Pre-shipment operations
2.2.3.1. The value of export credit capital shall be paid in a single installment  or in equal and
successive installments beginning on the date on which the resources are available to the
beneficiary.
Post-shipment operations
2.2.3.2. The principal value of the export credit shall be paid in a single installment or in equal
and successive installments, based on the predetermined events set forth in item 2.2.3.
2.2.4. Interest payments
2.2.4.1. The form of interest payment shall be defined by free negotiation between the parties,
observing the terms defined in items 2.2.2 and 2.2.4.G/AG/W/47
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2.2.4.2. For the purpose of the provisions of this chapter, interest excludes:
a) any payment, such as premiums or other surcharges, for the purpose of ensuring or
guaranteeing credit to exporters;
b) any other payment, such as bank fees or commissions, related to export credit; andc) discounts made by importing countries.
2.2.5. Cash payment
2.2.5.1. Member countries shall require importers of agricultural products included in item
2.2.4 (a) that have received official resources to make cash payment of a minimum of 15
percent of the exported value, prior to or on the date of shipment of the goods.
2.2.5.2. Exported value shall be understood to mean the total value to be paid by the importer,
excluding interest.
2.2.6. Sharing of risk
2.2.6.1. Any type of credit guarantee dealt with in this chapter, including those financed with
resources from national treasuries, shall include a minimum level of private sector
participation.  The official insurance agency may only cover up to 85 percent of the value of
the transaction.
2.2.7. Minimum interest rate
[To be defined ]
2.2.8. General Provisions
FTAA member countries shall not use any form of official resource with a view to refinancing the
payment of capital and interest on export credits for agricultural products.
2.3. Sanctions
2.3.1. If a FTAA member country fails to comply with the disciplines established in this chapter,
any other FTAA member may cancel the trade preferences granted to the product benefiting from the
subsidized credit or apply other countervailing measures agreed upon in the context of the FTAA.
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