Toespraak staatssecretaris Snel bij de opening van de International Working Group on Export Credits

Dear chairman, secretary-general, ladies and gentlemen,

It is an honour and a pleasure to open this 16th meeting of the International Working Group on Export Credits. Welcome to my home town The Hague, the seat of government, parliament and the King of the Netherlands.

Apart from being famous as the city of peace and justice, The Hague also has quite a cultural reputation. I’m sure that most of you know it is the city of Piet Mondriaan. But it’s also the home of the Panorama Mesdag, located right next door to this hotel.

Panorama Mesdag is an enormous cylindrical painting from the late 19th century. It shows a view of The Hague, the neighbouring fishing village of Scheveningen and the sea. I think it is an impressive piece of art, and the building is a fitting venue for your dinner this evening.

After all, the history of the Netherlands has been defined by the sea. At times it has been a threat. But most times, the sea has been our source for fish food, our ally and our life line. My ancestors could not have sailed the oceans and conduct global trade without it. Trade brought us great prosperity. In fact, it’s because of our success in trade, that we still refer to the 17th century as the Dutch Golden Age.

You could say nothing much has changed since then. Global trade is still a cornerstone of peace and prosperity. Not just our own prosperity. Thankfully we have moved on from that. But the prosperity of all nations.

Today we are concerned with free and fair trade, a subject at the top of the political and economical agenda. More specifically at this meeting, we are discussing the export of capital goods and the role of officially supported export credits.

I would like to take the opportunity to make two contributions to this discussion. My first comment will come as no surprise. It addresses the need for a new set of minimum standards for export credits.

My second contribution might not be one you expect, because it hasn’t been on the agenda of the Working Group so far. I would like to say something about the role export credits can play in fighting climate change. 

But first things first.

Since the mid-70's, the OECD Arrangement on export credits has served us well. It has created a level playing field for the export of capital goods, ensuring that competition takes place on the basis of the quality and price of the goods themselves, and nothing else.

Over the past few decades however, trade patterns have changed. Nowadays only one third of the global export credits for capital goods is covered by countries that are a participant to the OECD Arrangement. A lot of the countries present here are not even members of the OECD. And of course, no one can expect these non-members to just sign at the dotted line of an existing arrangement.

Therefore, to maintain a free and fair playing field for the export of goods and services, we need a new set of standards that we can all subscribe to. A real and productive set of standards, including an agreement on minimum prices both for interest rates and premia.

We can’t settle for less. Because we don’t want to end up with a suboptimal set of standards. One that will effectively lead to a subsidized race to the bottom. One that will cause negative welfare effects. One that will prove very costly for governments. Therefore, the negotiations on the new set of standards are crucial. They should take place vigorously and with an open mind.

Particularly when pursuing a new Shipping Sector Understanding. As you might know, the shipping sector is the only sector not subject to the Arrangement rules on minimum premia. In this sector with overcapacity and subdued demand, we have seen a lot of examples of government supported, very low financing prices. Now I don’t know beforehand where the negotiations will bring us, but I would argue that the outcome should include an understanding on minimum prices.

We should acknowledge that some members use different financing mechanisms than the ones that are addressed in the present understanding. An example is the use of balloon payments. There has been some discussion on these. I would like us to put all options on the table and judge them by their contribution to our common goals.

Now, the issue of climate change.

The clock is ticking. We have to reduce the CO2 pollution worldwide if we want to preserve the world as we know it for our children and grandchildren. In the Netherlands, we have recently started to use export credits more proactively in the fight against climate change.

True, we already have sector understandings on climate change mitigation. And we already have another understanding for newly build coal-fired electricity plants. But we can do more.

We will have to be innovative. I would like to highlight a recent example from The Netherlands: the so-called Climate Investor One. A fund designed to implement renewable energy projects in developing countries. The Dutch export credit facility is a participant of this fund and has committed to assume the risk for no less than 200 million Euro of private equity. And projects supported by the fund can freely source the most appropriate inputs from all over the world.

I am sure all of you together can come up with innovative ideas like these. And I hope that you will freely share these ideas with each other, as mitigating climate change is our most urgent challenge at the moment, in my point of view.

Ladies and gentlemen, when you look at the sea view of the Panorama Mesdag this evening, please take a moment to reflect on what’s at stake at this meeting. The Netherlands has been a seafaring nation for centuries, and we understand the importance of trade. Although means and conditions of trading have changed dramatically, one thing remains as vital as 400 years ago: the need for agreements with other nations on how to conduct trade.

In the face of international political turmoil about trade arrangements, let us set an example. Together we can work on new standards and explore new applications for export credits. Together we can create a free and fair market for export credits. Let’s do this together and make a real difference.

I wish you a successful meeting and an enjoyable stay in the Netherlands!