How “safe” is the WTO “safe haven”? A need to modernise disciplines for officially supported export credits

• DOI: https://doi.org/10.1108/JITLP-05-2022-0012
• Published date: 08 December 2022
• Date: 08 December 2022
• Pages: 1-14
• Subject Matter: Strategy,International business,International business law,Economics,International economics,International trade
• Author: Bob Jennekens,Andreas Klasen

How “safe”is the WTO “safe

haven”? A need to modernise

disciplines for officially

supported export credits

Bob Jennekens

Faculty of Law, Maastricht University, Maastricht, The Netherlands, and

Andreas Klasen

Institute for Trade and Innovation, Offenburg University, Gengenbach, Germany

and Institute for Systemic Management and Public Governance,

University of St Gallen (HSG), St Gallen, Switzerland

Abstract

Purpose –This paper aims to draw attentionto an urgent need for reform of the regulatory framework of

the broader export credit system to ensure a new and comprehensive “safe haven”for officially supported

export credits. Thepurpose is to analyse the complex debate on disciplinesof the World Trade Organization

(WTO) and the Organisation for Economic Co-operation and Development (OECD), creating a point of

reference for futureanalysis of and debates around the “carve-out clause”ofthe Agreement on Subsidies and

CountervailingMeasures (ASCM) and a “safe haven”in a broader sense.

Design/methodology/approach –This paper takes inspiration from legal, economic and political science

literature on subsidies and officially supported export credits, as well as on legal documents relatedto the WTO

and the OECD. It examines the WTO subsidy and the OECD export credits framework, focusing on main legal

and economic governance aspects. Then, it gives a critical analysis how “safe”a“safe haven”in a broader sense

might be, assessing frictions of and solutions for the fundamentally different set of disciplines, limitations,

financial instrumentsnot covered by OECD regulations, as well as new challenges related to climate finance.

Findings –After assessingthe challenges regarding the “carve-outclause”of the WTO subsidy framework

and two tracks aimingto create a new “safe haven”, requirements for comprehensivedisciplines for officially

supported exportcredits are pointed out. Furthermore, severalmisunderstandings and mistakes appearing in

the debate are clarified.

Research limitations/implications –Desktop researchrather than empirical field work.

Practical implications –This paper creates awarenessfor governments and exporters how to deal with

a complex system of interrelated disciplines.The question, how “safe”a“safe haven”in a broader sense can

be, has not been resolved yet. Some authorsfocus on the WTO disciplines not taking into account the need for

an effective matching procedure of the Arrangement on Officially Supported Export Credits (the

Arrangement). Furthermore, the introduction of several new pre-export financing programmes and the

growing significance of climate finance-related instruments for export credit agencies creates both

opportunities and challenges.This paper can serve as a reference point for the academic debate and further

research.This paper also offers newcomers to the topic a comprehensive overview.

Originality/value –Although the “carve-out clause”and the Arrangement have been much discussed,

there is limited literature review structuring both existing and new aspects of the debate, assessing (dis)

advantages of arguments and interpretations. This paper both adds to the corpus of literature about the

ASCM, as well as the Arrangement,and takes this corpus as the object of its analysis.

Keywords World Trade Organization, ASCM, Subsidies, OECD, Arrangement, ECA,

Export credits

Paper type Research paper

Export credits

1

Received17 May 2022

Revised10 August 2022

18August 2022

19October 2022

Accepted3 November 2022

Journalof International Trade

Lawand Policy

Vol.22 No. 1, 2023

pp. 1-14

© Emerald Publishing Limited

1477-0024

DOI 10.1108/JITLP-05-2022-0012

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