OECD says agreement in principle reached on export credits

MONTREAL — The OECD says government negotiators from aircraft producing countries like Canada have agreed in principle to new rules governing export credits for commercial aircraft.

MONTREAL — The OECD says government negotiators from aircraft producing countries like Canada have agreed in principle to new rules governing export credits for commercial aircraft.

The agreement is designed to create “a level playing field” among manufacturers, airlines and governments by unifying terms, the Organization for Economic Co-operation and Development said Wednesday.

Final approval by governments including Canada, Brazil, the European Union, Japan and the United States is expected by Jan. 20. It is expected to come into force Feb. 1.

The agreement would affect Montreal-based Bombardier (TSX:BBD.B), which has been excluded thus far because it has produced smaller, regional aircraft.

The new rules would create common financing terms and conditions between large and regional jets. It also contains mechanisms to smooth very sharp market movements.

The OECD said there are no quantitative restrictions on export credit agency programs.

Bombardier declined to comment specifically on the deal Wednesday.

But spokesman Marc Duchesne said Bombardier has long wanted all financing from national credit agencies to use the same terms so customers can make their decisions based on the quality of planes and not on which country offers better financing.

A provision of the agreement allows some previously ordered aircraft to be covered by existing financing terms.

The OECD said it has been part of multilateral efforts to harmonize state financing of exports for more than 30 years.

It said the existing rules that came into force in 1978 help to ensure that OECD and non-OECD exporters compete on the price and quality of their products and service and not on government support.

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