OECD confirms international agreement on aircraft export credits

08:10, December 23, 2010      

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Government negotiators on behalf of the United States, Brazil, Canada, Japan and the European Union have agreed in principle on new terms for state financing to support the export of commercial aircraft, the Paris-based Organization for Economic Cooperation and Development (OECD) said Wednesday in a statement.

"The proposed terms would move fees closer to market rates and allow for regular adjustments to reflect market developments," said the organization, which provided platform for the extensive negotiations.

Should the participants have the new agreement of Aviation Sector Understanding (ASU) formally approved by January 20, 2011, it can take effect on February 1, 2011, according to the statement.

The agreement, which aims to unify the previous disparate financing terms and conditions between large and regional jets, also "contains mechanisms to smooth very sharp market movements," the OECD added.

"The objective of the agreement is to create and maintain a market- and risk-based fee system that produces a level playing field between manufacturers, airlines and governments," the advanced countries' advisory agency said in the statement, adding "no quantitative restrictions on export credit agency programs."

A Sector Understanding on Export Credits for Civil Aircraft was incorporated in the arrangement in 1986. A 2007 update included for the first time a framework for exchange of information and the prevention or early resolution of export credit-related disputes.

The recent negotiations of ASU include the full participation of Brazil as a non-OECD member and France, Germany, Britain and Italy as EU participants.

Source: Xinhua
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