Canadian and U.S. Agricultural Export Credits
The United States and Canada consider agricultural export credit to be an important market development tool, and credit transactions have given rise to frequent interactions between the two countries. Unlike the surplus disposal measures discussed in Chapter 5, the provision of credit normally does not require massive amounts of economic resources. Canada was therefore able to compete with the United States in the export credit area, and both countries at various times took the lead in adopting innovative practices. From the 1950s to the early 1970s, the two countries became progressively more dependent on export credits and credit guarantees to market their agricultural products. Credit became less important during the period of foodgrain shortages in the mid-1970s, but it again became crucial to sales when surpluses re-emerged. This chapter focuses on four major phases that were significant in the evolution of export credit practices: export credits to the Soviet Union and Eastern Europe in the 1950s; American credits to the less-developed countries (LDCS) and Canadian credits to the Communist states in the 1960; special export deals and market development efforts in the late 1960s and 1970s; and aggressive and innovative U.S. practices in the late 1970s and 1980s. However, it is first necessary to provide a definition of export credit and to differentiate between commercial and concessional credits.
The various forms of export financing assistance are not clearly defined in the literature, and terms such as export credits, export subsidies, subsidized export credits, and export credit subsidies are often used interchangeably. However, it is generally agreed that official export credits are a type of export subsidy. Export subsidies can be defined as "government incentive programs that differentially favour export sales by comparison with domestic sales" or as