Export financing includes export loans, loan guarantees, and export credit insurance. In 1993, the Eximbank financed about 3.2 percent of total U.S. exports, the low end of the range financed by ECAs in the five EU member states. The U.K. uses a single government agency to deliver an entire range of export-financing assistance. Table 4 summarizes the types of export-financing assistance that governments in the six countries provide and the organizations used to deliver this assistance. Exporters, banks, and governments face a number of trade-offs due to the differences in the Eximbank’s and EU ECAs’ programs. Second, the level of risk-sharing between ECAs and participating banks may influence bank behavior. The Eximbank assumes 100 percent of the risks on most of the medium- and long-term cover that it issues. 1 and 2.) The OECD Consensus does not currently apply either to the premiums charged for export cover or to agricultural products. Six Nations’ Government-Supported Export-Financing Programs

The United States and the five European Union (EU) member states we reviewed—France, Germany, Italy, the Netherlands, and the United Kingdom (U.K.) use different organizational approaches in providing export-financing assistance. The Eximbank offers a wide range of financing services: direct and intermediary loans to foreign buyers of U.S. exports, helping U.S. exporters match officially supported foreign competition; guarantees to commercial lenders, providing repayment protection for loans to foreign buyers of U.S. exports; working capital guarantees, encouraging commercial lenders to make loans to companies that have exporting potential but need funds to produce or market goods or services to export; and export credit insurance to exporters protecting them against the failure of foreign buyers to pay their credit obligations. Forfaiting transactions are eligible for Mediocredito Centrale subsidies as well. International Efforts to Address Government Support for Export Financing Continue

The United States, EU member states, and other countries have agreed or are attempting to limit government subsidies and create a level playing field among their ECAs through various international forums, including OECD and the Berne Union, and within the EU.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the types of export-financing assistance that the United States and five European Union (EU) countries provide to exporters, focusing on the: (1) types of export-financing delivery systems used in the countries; (2) differences in and types of trade-offs among U.S. and EU member state programs; and (3) status of international efforts to limit the use of government-supported export financing.

What GAO Found

GAO found that: (1) the Export-Import Bank (Eximbank) financed $15.1 billion of U.S. exports in 1993 and the five EU member states collectively financed $74.8 billion of their total exports in that same year; (2) Eximbank provides a wide range of export-financing assistance to the U.S. exporting community, including direct loans, loan guarantees, and export credit insurance; (3) the five EU member states use a single government agency, as well as private and public sector providers to deliver export-financing capital; (4) Eximbank medium- and long-term loan guarantees are unconditional, and Eximbank assumes most of the risk involved in export transactions; (5) there are trade-offs between the time export credit agencies (ECA) spend scrutinizing loan applications and the time that elapses before the claims are paid, the level of risk assumed by ECA and participating banks, and the premium levels charged for financing assistance; (6) the Organization for Economic Cooperation and Development (OECD) has implemented an agreement that limits government subsidies and provides common guidelines for national export-financing assistance programs; and (7) this agreement does not currently apply to the premiums charged for export credits relating to defense goods or agricultural products.