TRADING IN DUBIOUS PRACTICES

OECD countries must stop export credit agencies funding environmentally damaging and immoral projects. The post-Seattle debate on trade has given little attention to government-sponsored agencies that, in some respects, dwarf the World Trade Organisation in their financial clout and real world impact. But this is likely to change. The damaging impact on the environment of export credit agencies (ECAs) will today be discussed at an Organisation for Economic Co-operation and Development meeting in Paris. The aim will be to draw up a set of common environmental approaches and guidelines for export finance. ECAs such as the US and Japanese Export-Import Banks, Germany's Hermes Guarantee, France's Coface and Italy's Sace subsidise almost 8 per cent of annual world trade. Government-supported loans, guarantees and insurance schemes back up more than Dollars 400bn worth of annual exports. And more than Dollars 50bn a year is devoted to big infrastructure projects in developing countries. This exceeds the combined financial assistance of all multilateral and bilateral aid agencies.