The Dynamics of International Trade Finance Regulation: The Arrangement on Officially Supported Export Credit
118 Pages Posted: 9 Nov 2006
The Arrangement on Officially Supported Export Credits (the Arrangement) is an informal, "gentlemen's agreement" among industrialized countries' export credit agencies (ECAs). ECAs are officially supported governmental institutions that provide financing in support of nationals' exports. The Arrangement sets specific, highly technical parameters on the type of financing packages that ECAs may offer to promote national exports, with the goal of eliminating competition among ECAs and thereby "leveling the playing field" for exporters. Although the Arrangement is a non-binding, international agreement, it nonetheless engenders unswerving compliance. This Article unfolds by empirically establishing sustained and pervasive compliance among industrialized ECAs. Having documented compliance, the Article then explores why the Arrangement breeds such compliance, focusing on three categories of compliance factors: state interests, international systemic linkages, and the Arrangement's architecture. While all factors are undoubtedly part of the compliance puzzle, the Arrangement itself - the nitty gritty of its substantive and procedural rules - emerges as the integral piece. The Arrangement is elastic (its soft form permits experimentation and easy revision), pragmatic (its processes redefine compliance in a way that accommodates ECA practice within the Arrangement's rubric), measured (it embraces consensus decision-making without diluting its rules with generalities and platitudes), and dialogic (the camaraderie of the Participants group and the Arrangement's unique processes assure that the Arrangement remains a vibrant and progressive discussion). In short, the Arrangement must be considered at a detailed and technical level to explain documented ECA compliance. By design, this Article is an empirical portrait of compliance that links compliance to the Arrangement's rules, form and history. Yet the example of the Arrangement also touches upon some of the most current, and heated, debates in international compliance theory. Thus, the Article also examines how the Arrangement fits into existing compliance theory, focusing on institutionalism and managerialism, and concludes that neither of these theories is sufficiently robust to explain the Arrangement's entire compliance story. Thus, this Article uses the Arrangement as a vehicle to raise some of the questions that must be asked and answered in contemplation of a newer, more inclusive theory of compliance.
Keywords: international law, international trade, international finance, international regulation, export credits, export credit agencies, Export-Import Bank, complaince, OECD
JEL Classification: F13, F34
Suggested Citation: Suggested Citation