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Testimony of Eugene L. Bovee -12- 



June 23, 1994 



An obvious emphasis has been placed on private sector programs, without sovereign 

 guarantees, developed around credit limits for individual foreign banks. Much time and 

 effort has been expended in performing credit reviews of foreign banks to avoid public 

 sector programs, even in situations where the foreign country does not as yet have a 

 developed banking system. In some cases this approach may have been appropriate, while in 

 others, the shift to private sector programs has been too radical causing the U.S. to lose sales. 



We believe a better balance can be achieved between the market development, trade 

 enhancement and foreign policy issues on the one hand and creditworthiness issues and 

 requirements on the other hand. In this regard, we would encourage the development of a 

 partnership between commercial lenders, exporters and the USDA in establishing 

 creditworthiness guidelines for prospective buyers and importing countries, given 

 consideration for utilizing the expertise and experience of lenders in this area. 



As previously mentioned, there is an effort underway within the CCC to evaluate existing 

 programs and the need for new programs and approaches to support agricultural export 

 transactions. They should be encouraged and supported whenever possible to provide more 

 flexibility and better linkage of guarantee programs to commercial transactions. To this end, 

 CCC agreed to participate in a meeting yesterday with exporters and bankers to listen to 

 concerns and discuss ways in which to make these programs more effective in their support 

 of U.S. exports. A reevaluation of the real potential for ultimate loss in public sector vs. 

 private sector programs seems to be needed along with the reaffirmation of the purpose and 

 objective of the GSM and other CCC programs, which should primarily be conducted to 

 promote and support U.S. exports and maintain and expand export markets. 



