Bill English

The Government is providing $200 million more in trade guarantees to increase opportunities for New Zealand exporters, Finance Minister Bill English says.

"The extension of three trade credit guarantee and bond products will help exporters grow their business and keep New Zealanders in jobs as we emerge from the recession," Mr English says.

"This Government has made it clear that one of the best ways to ensure New Zealand grows strongly out of the recession is to increase exports and investment. Ensuring our exporters have the credit flows to maximise the opportunities that flow out of recent trade developments is crucial."

In recent weeks New Zealand has signed a free trade agreement with Malaysia, concluded negotiations with Hong Kong and entered preliminary talks with the United States on it joining the Trans-Pacific Partnership, of which New Zealand is a member.

"New Zealand is well placed to benefit from growing demand for our quality products, but we must make sure our exporters have the full range of tools they need to trade with the rest of the world."

Under the changes announced today three products offered by the New Zealand Export Credit Office will be extended. The changes are:

Extending the US Surety Bond product by $70 million to $170 million. Companies selling products to US government bodies must provide such a bond, but US insurers are reluctant to guarantee NZ firms.

Extending the Export Credit Guarantee product by $100 million to $315 million. This enables exporters to offer overseas buyers repayment terms longer than 360 days and covers them in event of default.

Extending the General Contracts Bond product by $30 million to $75 million. This is a guarantee to an exporter's bank that enables the bank to issue a bond required as part of the exporter's contract in a situation where they lack collateral.

The US surety bond scheme and a short-term trade guarantee have already been extended this year in the face of rising demand for the Export Credit Office's products due to a tightening of trade credit during the global downturn.

All three products only incur a cost to the Crown in the event of a default. The extensions take the total contingent liability arising from Export Credit Office products from $540 million to $740 million.

More Information on the guarantees are available at http://www.nzeco.govt.nz.