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GSM CREDIT PROGRAMS 



Member companies of the Southern Forest Products Association have used the credits provided 

 under GSM- 102 to open new markets and expand existing market share. The GSM credits 

 have been useful in gaining a foothold in North Africa as well as in Mexico, and have allowed 

 U.S. exporters to initiate significant new sales into these markets. Although coordinated 

 efforts of the industry and government have paid dividends for U.S. exporters, SFPA believes 

 even greater dividends could have been achieved. 



The U.S. wood products industry has long sought to extend the credit terms for U.S. wood 

 products under the GSM- 102 program from the current 720-day, or 2-year, limit to the 

 three-year terms offered for other agricultural products. But, agencies outside of USDA have 

 refused to allow FAS to extend the credit terms for wood products. These agencies have cited 

 the OECD Bern Agreement as the basis for this denial, despite the fact that the U.S. 

 government is not a signatory to the agreement. Furthermore, the Bern Agreement has also 

 been used as the basis for denying the U.S. wood products industry access to the GSM-103 

 program. Wood products have only been sold under the P.L. 480 program in one case, and 

 that was to Jamaica after Hurricane Gilbert. 



SFPA believes that ever since 1988 the Administration has been in violation of the will of 

 Congress. Congress, in the Omnibus Trade and Competitiveness Act of 1988, redefined the 

 term "agricultural products" to include wood and processed wood products in the definition 

 for Short-Term Export Credit Guarantees and the Intermediate-Term Export Credit section 

 (Sec. 4402). Furthermore, Congress specifically directed in Section 4404 that 'The Secretary 

 of Agriculture shall actively use Depanmeru of Agriculture concessional programs and export 

 credit guarantee programs to promote the export of wood and processed wood products." 



