Office of International Affairs

Trade Finance (ITF)

< BACK

The Office of International Affairs, and specifically the Office of Trade Finance (ITF), has lead responsibility within the U.S. Government for the development, implementation and enforcement of international trade and aid finance policy. ITF's primary goal is to create and maintain a market-based, competitive environment in which governments' financing of national exports contains minimal subsidies. This maximizes the role of private markets in international finance and allows U.S. exporters to compete fairly against foreign government-supported financing for export contracts at the lowest possible cost to U.S. taxpayers.

To carry out this work, ITF represents the United States in the Organization for Economic Cooperation and Development (OECD) as the U.S. negotiator and technical expert on a wide range of trade finance issues. The Paris-based OECD is the forum in which international trade and aid finance rules are established and international trade and aid finance subsidies are disciplined. For example, the OECD Arrangement for Officially Supported Export Credits (Arrangement) places limitations on the terms and conditions of government-supported export credit financing so that competition among exporters is based on price and quality rather than terms of government-supported financing. The Arrangement is saving U.S. taxpayers and enhancing U.S. exports by hundreds of millions of dollars annually.

Domestically, ITF oversees U.S. export financing and aid programs to ensure their compliance with the OECD rules. U.S. Government agencies such as the Agency for International Development, Department of Agriculture, Export-Import Bank, Maritime Administration, Overseas Private Investment Corporation, and Trade & Development Agency operate export financing and/or aid programs. In summary, ITF advises the Under Secretary for International Affairs and other Treasury officials on all trade finance policy issues, recommends policy positions, and coordinates the U.S. position through an interagency process.

Past accomplishments include strong OECD rules restraining the use of aid subsidies in commercial export competitions and the institution of minimum interest rate, and risk fee rules for officially-supported export credits. More recently, in November 2004, the OECD agreed to a U.S. proposal to open bidding for untied aid credits to developing countries. This addition to the Arrangement will help U.S. exporters identify and bid on foreign contracts and ensure that the bids are administered fairly. Also in 2004, the OECD Working Party on Export Credits and Credit Guarantees strengthened its 2002 Agreement on Common Approaches to the Environment, which lays out procedures to be followed and sets minimum standards to be used when export credit agencies perform environmental impact evaluations of the projects they are considering to support.