Guardians of trade in Dubrovnik

In the Lazarettos walled district of medieval Dubrovnik, traders, merchants and visitors were processed and quarantined to protect the city against risk of contagion. In mid-May 2025, resilience and caution are still being discussed. Now a courtyard complex, the Lazarettos are an apt gala venue for a modern mix of the international trading export finance and insurance community under the aegis of Berne Union, hosted by the Croatian Bank for Reconstruction and Development (HBOR).  

“Dubrovnik has a history of resilience, and this has proven to be the right place to discuss and communicate resilience about our industry,” says Yuichiro Akita, President of the Berne Union and senior general manager, international strategic policy, at Nippon Export and Investment Insurance (NEXI). “Against the background of the current trade environment, we have to think how we can be resilient.” 

“Dubrovnik is a special place, one of the best, most appropriate, places in the world to talk about resilience because of its history, and after all the crises,” adds Hrvoje Čuvalo, President of the Management Board of HBOR. “Hosting the BU meeting here now is an honour and privilege for us,” he explains. “First, we are rather a young country and ECA. We have been a member of the Prague Club Committee [and BU] since 1999. We started from scratch then and we’ve grown into a respected ECA that works closely with some of the leading agencies and organisations in our industry, so being able to host such a large and prestigious gathering now is important.”

Yuichiro Akita, Hrvoje Čuvalo, Paul Heaney

Bastions of free trade

In relation to the trade environment, “the Berne Union is the guardian of free trade and investment,” says Akita. “We have evidence that private insurers are very strong, robust, and collaboration has deepened. ECAs have prepared a lot of products and tools to tackle future challenges. If you know financial shocks are coming, you can use these tools to overcome them, and Dubrovnik gives us the opportunity to reaffirm this.”

That evidence of continued strength and resilience is highlighted in the BU’s annual State of the Industry Report, which shows that new trade supported by members reached a record $3.3 trillion in 2024. Akita points to the $160 billion in MLT [medium/long term] commitments in 2024, a steady progress in solar and wind, geothermal, biomass nuclear and energy storage. He notes that 20% of new commitments came from private insurance. There were $10 billion in claims. “Some hesitate to celebrate this, but paying claims is essential, and it was a busy year for claims and recovery,” he says.

Geopolitical headwinds have been shifting since the beginning of the year though. How has that influenced Akita’s perceptions of the state of the market? “Our industry report shows the figures are quite robust,” says Akita. “Members are watching events carefully, but it’s not ‘crisis mode’, it’s more about being ready to respond. Some ECAs have prepared special measures in case things go wrong, and these are automatically triggered to support clients. ECAs have been learning from other crises – such as the global financial crisis and most recently, the Covid pandemic. That helps make the industry resilient and the ECAs and public insurers can intervene appropriately.”

Resilience is also one of the pillars of the BU STRIDE vision statement [Sustainability Through Resilience, Innovation, Diversity for Empowerment]. “Focusing on resilience, [this event] emphasises our role as guardian of trade and investment. It is important for members to continuously engage in collaboration. This includes, for example, sharing data and best practices. The basis for this has been set up and built upon for several years by my predecessors. We will soon be launching a new data reporting system so the foundation will be even stronger, and this will also improve resilience,” Akita says.

“Secondly, for the sustainability [pillar], we need not only the view of members but also of external stakeholders such as DFIs, MDBs or other UN organisations, to work together to deal with the grand challenges. In the past few months BU has made good progress on deepening relationships with these external stakeholders, and we’ll have more to share soon. A recent UNCTAD report shows how important PRI is to mobilise private capital to achieve sustainable development goals. Without private investment, infrastructure investment in emerging countries and the SDGs may not be realised, and PRI has been largely overlooked.”

Compete or collaborate?

Is the relative increased use of untied debt making ECAs more competitive against each other amid geopolitical headwinds on their domestic agendas or is there more evidence of collaboration? Akita says: “ECAs’ mandates are expanding beyond traditional forms of export support, taking a broader role strengthening supply chains and helping support these in times of crisis. Consequently, today, the ECA toolkit is also wider, including financing for domestic working capital or overseas affiliates, for example. Both tied and untied lending is growing in MLT and the reality is that this is a sign that ECAs are expanding rather than competing.” 

Paradoxes of trade uncertainties – how to resist deglobalisation

The plenary sessions of the event (held under the Chatham House rule) reflect the resilience theme. In terms of the idea of resisting the intensity of global deglobalisation, one speaker quips that was analogous with ‘surviving Trump’ and resisting misplaced ‘tariff tangos’. Another, in a session on rewiring global value chains, argues that although he avoids discussing geopolitics, his role as advising on risk management does now have to include ‘pinches’ of geopolitics and the minds of global leaders, rather than simply being good at econometric predictions. 

Manufacturing trade intensity of global production (trade as a proportion of industrial production) has slowed in the past 15 years, while the globalisation of services has continued apace. The US dominates the latter, but not as a proportion of its own GDP. Attempts to deglobalise services would perversely impact the EU (and UK) in terms of their own outputs (the EU sells manufactured goods to the US and buys ‘sophisticated services’ and is also relatively one of the biggest marginal lenders to the US (in terms of buying US debt)), as are other ‘strategic allies’, says one speaker. 

Resisting deglobalisation will partly be a question of overcoming the paradoxical challenges from the US administration fixating on trade versus overall current account balances. The last paradox the speaker notes was the impact of uncertainty in weakening, rather than strengthening the dollar, and the impact, particularly on EU competitiveness and growth. China’s ‘quasi-deflationary’ pressures may also continue even amid stimulation as the ‘laws of economic gravity’ slowly reassert themselves, the speaker says. 

Holding up BU as an example of the embodiment of globalisation, the speaker asks whether globalists are an endangered species, but argues that globalisation will survive, if not thrive, with certain conditions. Uncertainty does not help, though. 

Asian ECA panellists argue that global partnerships (especially across Asia) with multilateral development banks, and among ECAs, are more important than ever. One notes that smaller Asian countries cannot solve all the problems alone, and commonalities will be key to run organisations in the ‘chaotic global environment’. Nonetheless, they point to the prediction that by 2040, Asia will have the world’s four biggest economies (counting the Southeast Asia region as the fourth). Another ECA, which usually principally issues under OECD Consensus guidelines, asserts that it will be ramping up its untied issuance amid global trade fragmentation. 

The Asian ECAs agreed that SMEs need focused support, particularly as private insurance often does not meet their needs, as they provide the backbone for economic stability and recovery. Digitalisation and the integration of AI are seen as pivotal for dynamic risk management and for narrowing client service gaps, particularly in addressing the needs of both large exporters and smaller businesses. 

From climate to defence, and balancing ambition with prudence

Strategic pillars of defence, critical minerals, energy security (especially clean and renewable energy), and climate action are all in the mix. The emphasis varies. For instance, one European ECA asserts that the European Commission’s new mantra had shifted from ‘climate, climate, climate,’ to ‘defence, defence, defence’.

The ongoing challenges of scaling the hydrogen market remain a concern, as does the unclear future of offshore wind projects in the US. Also, domestic financial pressures may prompt further slowdown by some ECAs’ financing in less developed economies, one speaker notes. Encouraging work on major debt conversions (debt for nature swaps/blue bonds etc) last year is highlighted. The ‘halo effect’ of credit guarantees from MDBs and DFIs on private capital mobilisation, comfort for private insurers and bank finance via interest rate compression/principal reduction on Eurobonds was important in 2024, and increased cooperation with ECAs could help with this. 

Meanwhile, bank risk appetite for reconstruction in Ukraine and the Middle East is predicated on conflict resolutions and a strengthened underpinning of support from ECAs/DFIs – and discussion flows from reconstruction to defence and back. Even with an increased percentage of cover, ECAs are seeing low appetite from banks in general in Ukraine. The audience questions what other incentives would help (including ECAs in syndication structures is mentioned).

More broadly, have environment and climate concerns taken a backseat?

Not necessarily, as the BU’s Akita says: “People are worrying about setbacks in tackling issues like the green transition, and we have been discussing this. First of all, we should understand the long term trends which have been established years ago, and some things do not change much.”

‘Balancing ambition with prudence’ was one mantra given to players at the event, which was underpinned by a strong belief that ECAs and private credit can help ‘calm’ the market through appropriate risk management. Several ECAs assert that the opportunities for ECAs and MDBs/DFIs to support projects with credit enhancement, to ‘change the credit story’ are still important to take.  

Byzantium, the Venetian Empire, the Ragusa republic, Napoleon, earthquakes, the breakup of the former Yugoslavia, Dubrovnik has been resilient through it all. Most recently famous as the backdrop for a scene in Game of Thrones, where the character Septa Unella, played by Hannah Waddingham, chanted ‘Shame, shame, shame!’ walking through the old city. There’s no need for the ‘shame nun’ if prudence and ambition can continue to be balanced for credit insurers in the ECA market. 

We will be publishing an interview with HBOR’s Hrvoje Čuvalo shortly through Uxolo and TXF.