Hon Tim Groser

Minister of Trade

4 February 2009
Media Release

Trade credit changes to help exporters

Exporters potentially facing cancelled orders because of a lack of trade credit insurance will get relief from measures unveiled today by Trade Minister Tim Groser.

Under the changes the New Zealand Export Credit Office (NZECO) will provide short-term trade credit insurance for exporters.

Short-term trade credit insurance is used as a guarantee to banks that an exporter will be paid in accordance with a supply contract.

“The global financial and economic downturn has affected the availability of short-term trade credit in New Zealand, making it very difficult for some exporters - particularly small-to-medium exporters - to continue trading in some countries,” says Mr Groser.

“These new measures will help to ensure trade opportunities won’t be missed – which is crucial in the current economic environment.”

NZECO has previously provided trade credit insurance only for contracts with payment terms of more than 360 days. This will be extended to include periods of fewer than 360 days.

The guarantee will be provided on a temporary basis, for a period of up to two-and-a-half years.

If the NZECO does not provide this short-term credit insurance, some exporters will have to turn down orders that they would otherwise have completed.

The NZECO will also be working with the private sector on ways to reinsure their risks so that they can continue to provide New Zealand exporters with support.

Information about the new short-term trade credit insurance and reinsurance guarantee is available on the New Zealand Export Credit Office’s website at www.nzeco.govt.nz.

ENDS

Attached: Groserfactsheetfinal.pdf

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