The Korean Export Insurance System: Its Implications on the Trade Regulations in the Global Trading System

Journal of World Trade

Volumn 35, Issue 4, 2001, Pages 603-614

  Mah, Jai S ^a   Song, Yunah ^a  

^a Dankook University   (South Korea)

Author keywords

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Indexed keywords

EID: 0035601996     PISSN: 10116702     EISSN: None     Source Type: Journal    
DOI: 10.1023/A:1011887925435     Document Type: Article

References (35)

1. ECAs are government-owned (as with the Export Credits Guarantee Department (ECGD) in the United Kingdom) or privately owned institutions which administer accounts, separate from their commercial businesses, on behalf of the state (as with the French Export Credit Agencies (COFACE)).
2. Gerda, Dewit, Export Insurance Subsidization: Risk Coverage, Strategic Export Promotion or Aid?, University of Glasgow working paper, 1996. According to Dewit, official export insurance programmes are categorized into three types based on the purpose and impact on the export: risk coverage as a pure insurance motive; strategic export promotion; and the politically inspired development aid.
3. Annex I.(j) of the SCM Agreement of the WTO slightly modifies paragraph (j) annexed to the Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the GATT, a result of the Tokyo Round. The expression "manifestly" which appeared in the relevant provision in the Tokyo Round came to be omitted in Annex I.(j) of the SCM Agreement of the WTO.
4. The Department of Commerce in the United States made decisions allowing countervailing measures to be taken by the trading partners if premium rates are "inadequate" to cover the recent five-year operating costs and losses of the programmes: cold-rolled carbon steel flat-rolled products from Argentina [49 Fed. Reg. 18,006 (1984)]. That is, the U.S. government, for instance, appears to interpret the "long-term" as five years.
5. For further details, see Gerda, Dewit, Export Insurance Subsidization and Undistorted Trade Creation, University of Glasgow working paper, 1996.
6. Gary Clyde Hufbauer and J. Shelton Erb, Subsidies in international trade, Institute for International Economics: Washington, D.C., 1984.
7. WTO documents, WT/DS70/R, dated 14 April 1999 and WT/DS70/AB/R, dated 2 August 1999. For explanations of the export subsidies in the civilian aircraft sectors in Canada and Brazil, see Oliver Stehmann, "Export Subsidies in the Regional Aircraft Sector: The Impact of Two WTO Panel Rulings against Canada and Brazil", JWT, December 1999, Vol. 33, No. 6.
8. http://www.oecd.org/ech/xcr.htm, dated 2 January 2001. There are 26 signatories to the Arrangement: Australia, Canada, the European Community consisting of 15 countries, Japan, Korea, New Zealand, Norway, Switzerland, Hungary, Poland, the Czech Republic and the United States.
9. Richard Gerster, "Official Export Credits and Development", JWT, December 1997, Vol. 31, No. 6.
10. WTO document, WT/DS70/R, para. 5.81-5.82. The EC also agreed with Canada with respect to this aspect (Source: WTO document, WT/DS70/R, para. 7.14).
11. Where matching involves minimum premium benchmarks, the participants can be free to match the rate only if it is providing support on the basis of a similar quality risk (Article 19 of the Arrangement).
12. OECD, The Export Credit Arrangement 1978-1998: Achievement and Challenges, OECD: Paris, 1998.
13. Further details on the Knaepen Package can be found at http://www.oecd.org/ecb.
14. According to note 3 of the Arrangement, the transition period for Korea ends on 31 March 2002. By 1 April 1999, Korea was required to apply at least 40 percent of the initial minimum premium benchmarks; by 1 April 2000 (1 April 2001), it was required to apply 60 percent (80 percent) of the minimum premium benchmarks; and by 1 April 2002, it would be expected to apply 100 percent of the benchmarks.
15. The International Union of Credit and Investment Insurers, often called the Berne Union, is an association of public/state and private credit insurers consisting of 52 Members, including 46 economies and six organizations (WTO document, G/AG/NG/S/13, dated 26 June 2000). Since its establishment in 1934, it has dealt with the maximum repayment periods depending on the type of goods being exported and the sums involved; the beginning of the repayment period; the exchange of information, assistance and advice on the commercial and political risks involved in export credit insurance, the political risks involved in foreign investment insurance and the range of associated matters related thereto. For a survey of the Berne Union, see International Trade Center (ITC), Trade Support Senices; Export Credit Insurance and Guarantee Schemes: A practical guide for developing and transition economies, ITC: Geneva, 1998.
16. Articles 21-23 of the Arrangement
17. Article 7 of the Knaepen Package
18. There exist three related conditions: the percentage of cover, the claims waiting period, and the cover of interest during the claims waiting period without surcharge (Article 23 of the Arrangement).
19. KEIC, Monthly Export Insurance, March 1993.
20. For further details on the products, coverage and premium relating to export insurance in Korea, see http://www.keic.or.kr.
21. This denotes the risk arising from changes in the exchange rate under the flexible exchange rate system.
22. This covers losses incurred by banks when documentary export bills are not honoured upon maturity as a result of unexpected political or commercial events.
23. This compensates banks for losses due to payments made to fulfil surety obligations pursuant to the unfair calling of bonds.
24. This covers losses due to the inability to collect the repayment to loans relating to Short-term Export Insurance or Agro-fishery Export Insurance.
25. This covers the risk arising from the difference between the actual and fixed interest rate.
26. According to note 2 of Article 2.1(b) of the SCM Agreement, where the granting authority established objective criteria such as the number of employees or size of the enterprise, specificity does not exist.
27. Yoon Je Cho and Joon Kyung Kim, Credit Policies ami the Industrialization of Korea, KDI: Seoul, 1997.
28. Ibid.
29. However, the recent loss ratios of the ECAs in most developed countries appear to be less than 100 percent (Source: Australia: Export Finance and Insurance Corporation Annual Report 2000; Belgium: Official National du Ducroire (ONDD) Annual Report 2000; Canada: Export Development Corporation Annual Report 2000; Germany: Hermes Annual Report 2000; and US: EXIM Bank Annual Report 2000), Richard Gerster, note 9 above, explains the Swiss case briefly.
30. However, the recent loss ratios of the ECAs in most developed countries appear to be less than 100 percent (Source: Australia: Export Finance and Insurance Corporation Annual Report 2000; Belgium: Official National du Ducroire (ONDD) Annual Report 2000; Canada: Export Development Corporation Annual Report 2000; Germany: Hermes Annual Report 2000; and US: EXIM Bank Annual Report 2000), Richard Gerster, note 9 above, explains the Swiss case briefly.
31. However, the recent loss ratios of the ECAs in most developed countries appear to be less than 100 percent (Source: Australia: Export Finance and Insurance Corporation Annual Report 2000; Belgium: Official National du Ducroire (ONDD) Annual Report 2000; Canada: Export Development Corporation Annual Report 2000; Germany: Hermes Annual Report 2000; and US: EXIM Bank Annual Report 2000), Richard Gerster, note 9 above, explains the Swiss case briefly.
32. However, the recent loss ratios of the ECAs in most developed countries appear to be less than 100 percent (Source: Australia: Export Finance and Insurance Corporation Annual Report 2000; Belgium: Official National du Ducroire (ONDD) Annual Report 2000; Canada: Export Development Corporation Annual Report 2000; Germany: Hermes Annual Report 2000; and US: EXIM Bank Annual Report 2000), Richard Gerster, note 9 above, explains the Swiss case briefly.
33. However, the recent loss ratios of the ECAs in most developed countries appear to be less than 100 percent (Source: Australia: Export Finance and Insurance Corporation Annual Report 2000; Belgium: Official National du Ducroire (ONDD) Annual Report 2000; Canada: Export Development Corporation Annual Report 2000; Germany: Hermes Annual Report 2000; and US: EXIM Bank Annual Report 2000), Richard Gerster, note 9 above, explains the Swiss case briefly.
34. KEIC, Monthly Export Insurance, July 1999.
35. KEIC, Country Report, July 2000 and November 2000.