RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/NG/S/12/Add.1
27 June 2000
(00-2628)
Committee on Agriculture
Special Session
MEMBERS' USAGE OF DOMESTIC SUPPORT CATEGORIES,
EXPORT SUBSIDIES AND EXPORT CREDITS
Background Paper by the Secretariat
Addendum
1. The present addendum to the Secretariat's background paper G/AG/NG/S/12 dated
15 June 2000 provides additional information concerning Members' usage of export credits.
2. In a faxed communication by the Secretariat dated 9 June 2000 Members were invited to
provide information on the value of exports of agricultural products which benefited from officially
supported export credits.  In response,  the Secretariat has received information from Canada, the
European Communities and the United States.   It should be noted that the data shown in Table 1
reflect the value of exports of agricultural products officially supported with export credits and shouldnot be construed as reflecting subsidies for exports of agricultural products.
3. In an earlier fax by the Secretariat dated 10 April 2000 Members were invited to provide,
information concerning export credits.  Specifically, pending further discussions of the data that might
be required in this area, those Members which were in a position to do so were invited to provide data
on, or estimates of, total annual budgetary outlays and revenue foregone (for each year of the
implementation period for which such data are currently available) in connection with subsidized
export credits provided by governments, or financed by virtue of governmental action, in respect ofexports of agricultural products.  For this purpose, export credits would include direct
credits/financing, refinancing, interest rate support, as well as export credit insurance and guarantees.
4. In addition to the responses reflected in  document G/AG/NG/S/12, the Secretariat has
received information on export credits from the Czech Republic, Estonia, Japan and Korea
(reproduced in the Attachment to this addendum).    The Czech Republic aside, the responses were nilusage returns.   Table 2 shows for the four Members concerned the usage of domestic support, export
subsidies and export credits for 1995-99.G/AG/NG/S/ 12/Add.1
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Table 1 - Value of exports of agricultural products which benefited from officially supported
     export credits, 1995-99 (US$ million)
1995 1996 1997 1998 1999
Canada 570.0 697.0 1,239.0 1108.0 ..
European Communities
    Credit terms of less than one year 949.6 820.2 851.1 921.4 ..
    Credit terms of one year or longer 78.6 55.6 57.6 91.0 ..
United States 3,045.3 4,036.7 2,876.1 3,230.1 ..
Notes:
(1) ".." denotes no information.
(2) The data reflect the value of exports of agricultural products officially supported with export creditsand should not be construed as reflecting subsidies for exports of agricultural products.
(3) European Communities:  The data are provisional.  They are based on submissions by EC member
states and are subject to confirmation. Intra-EC trade is excluded.  The data relate to credits officially supported(excluding commercial operations) with credit terms of less than one year, and one year and longer.   The short-
term officially supported export credits (credit terms of less than one year), that are provided in the form of purecover, have no or minimal subsidy elements.(4) United States:  The data represent the total (all programs) of US agricultural credit guarantees for the
fiscal year starting October 1 and are based on exporter applications received.
Table 2 - Usage of domestic support categories, export subsidies and export credits, 1995-99
   (US$ million)
CZECH REPUBLIC 1995 1996 1997 1998 1999
Total domestic support 175.6 259.6 154.6 227.7 -
Green Box 132.2 197.4 121.3 196.3 -
S & D Box na na na na -
Blue Box 0000 -
De minimis 0000 -
Current Total AMS 43.4 62.2 33.2 31.4 -
Total export subsidies 40.1 41.8 40.2 41.8 -
Export credits 0 0 4.8 4.8 7.9G/AG/NG/S/ 12/Add.1
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ESTONIA 1995 1996 1997 1998 1999
Total domestic support -
Green Box -
S & D Box -
Blue Box -
De minimis -
Current Total AMS -
Total export subsidies 0
Export creditsMEMBER AS OF 13.11.99
0
JAPAN 1995 1996 1997 1998 1999
Total domestic support 69,607.3 54,912.8 47,748.3 - -
Green Box 32,859.0 25,019.8 21,611.7 - -
S & D Box na na na - -
Blue Box 000 - -
De minimis 379.5 331.2 294.2 - -
Current Total AMS 36,368.8 29,561.9 25,842.4 - -
Total export subsidies 00000
Export credits 00000
KOREA 1995 1996 1997 1998 1999
Total domestic support 8,256.8 9,354.1 8,857.7 5,532.0 -
Green Box 5,173.5 6,442.8 6,093.0 3,828.1 -
S & D Box 26.4 38.4 39.7 29.6 -
Blue Box 0000 -
De minimis 365.9 427.3 688.9 559.2 -
Current Total AMS 2,690.9 2,445.6 2,036.1 1,115.1 -
Total export subsidies 1.5 3.0 3.2 2.6 -
Export credits 0000. .
Symbols:
"na" not applicable
"-" no notification received
".." no informationG/AG/NG/S/ 12/Add.1
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ATTACHMENT
Information Concerning Export Credits
The relevant portions of the information concerning export credits that was received by the
Secretariat are reproduced below:
Czech Republic
Interest Rate Support of Exports (US$'000 )
Name of exported commodity 1995 1996 1997 1998 1999
 Fruit and vegetables 0 0 189.1 0 0
 Mustard, poppy-seed, margarine, oil 0 0 126.0 1.4 0
 Eggs, poultry 0 0 101.4 0 0
 Flax products 0 0 42.3 51.1  0
 Malt 0 0 3,141.9 3,101.0 2,150.8
 Beet sugar 0 0 1,162.7 836.0 0
 Seasonal stocks 0 0 0 38.5 0
 Technology-investments 0 0 0 566.5 0
 Technology-advanced financing 0 0 0 194.3 0
 Milk 0 0 0 0 5,723.5
 Total 0 0 4,763.4 4,788.8 7,874.3
Source:  Guarantee Farmer and Forestry Fund.
Estonia
"Export credit and guaranteeing system in Estonia is based on the principle that no distinction
by the field of activities of the applicants is made.  Therefore there is no special institution grantingagricultural export credits and guarantees in Estonia.  It is also important to point out that so far no
export credits and guarantees have been granted for applicants engaged in agricultural activities.
Estonian state export credit system was established in 1993 by the creation of the Estonian
Export Credit State Fund.  The core task of this institution was to grant credits to cover the assetswithdrawn from the companies' turnover, due to  long terms of payments (as rule, 15-60 days).
Request for the export credit from the Agency can be submitted by a legal person registered
in the Republic of Estonia, or by a natural person (not obligatorily a resident of the Republic of
Estonia), whose business activities are targeted at exports and who has a foreign buyer.  Credits are
aimed mainly to small and medium-sized enterprises.   Interest rates are based on commercial interest
rates
1, thus the credit cannot be considered as export subsidy.
                                                     
1 The Estonian Export Credit and Guarantee Agency has granted export credits with following interest
rates:  Until the middle of 1997 the interest rate was 11-15 per cent, in April 1997 (peak of the economic boom)
new interest rate level of 8-15 per cent was stated, taken into account the fact that the average commercialinterest rate has also dropped to 8 per cent.  Yet only one loan was granted with the interest rate of 8 per cent.  In1998 the credits were overwhelmingly granted with the interest rate of 13-15 per cent, minimal interest rate hasbeen currently set at the level of EURIBOR + 6 per cent.
The Fund has always followed the market developments while designing its interest rate policy.
Interest rates are stated separately for every loan granted, average interest rates of loans granted by commercialbanks in Estonian kroons (published monthly by Central Bank of Estonia) are taken into account.  For example,in November 1998 the commercial rate was 14.8 per cent whereas respective figure for the credits granted bythe Fund was 15-16 per cent.G/AG/NG/S/ 12/Add.1
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In 1997, Estonian Export Credit State Fund was reorganized into the Estonian Export Credit
and Guarantee Agency (EECGA).  The task of the Agency is creation and launching of a system of
guaranteeing exports, under the condition of non-distortive impact on trade.  The Agency is currently
involved in preparation of the credit insurance system.
On 9 February 1999, Estonian Parliament passed the State Export Guarantees Act, which
serves as a basis for launching the state export guarantee system (Act is in force since 1 March 1999).
According to the Act:
• the limit for simultaneously valid state guarantees should not exceed 300 million kroons;
• the total amount of guarantees granted to one exporter should not exceed 30 million kroons;
• up to 70 per cent of the damages resulting from an export transaction shall be compensated to the
exporter;
• the reserve capital for covering losses shall not exceed 10 per cent of the guarantee limit provided
for in the Act (= not more than 30 million kroons);
• guarantees cannot be issued for the transit nor for re-export of goods, as well as for food products
in which the share of imported raw materials is 20 per cent or more.
The Government Decree No. 265 was passed on 7 September 1999 and it regulates processing
of guarantee applications, issuing of guarantees, risk evaluation, calculating guarantee premiums and
loss compensation.
At the moment no specific export guarantee nor credit insurance services are provided by the
private institutions.  The introduction of the state export guarantee scheme ought to encourage private
insurance companies and banks to launch similar services.  According to the State Export Guarantees
Act compensation to an exporter for damages resulting from commercial risks shall be secured by
guarantees to the extent that they cannot be insu red by an insurance contract entered into with an
insurance company.
The premiums for state export guarantees are based on the market rates.  The principle of
zero-profit is included in the Government decree on  export guarantees:  'The guarantee premium shall
be sufficient to cover expenditures related to the guarantee handling by the foundation and possible
losses during a longer period'."
Japan
"I would like to inform you that for the implementation period,  Japan did not grant any
export credits."
Korea
"Korea has provided no export credit for the years 1995 to 1998."
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