Final answer:
Two disadvantages of long-term export financing through an export credit agency (ECA) include the risk of exchange rate imbalances and distraction from productivity gains.
Step-by-step explanation:
One disadvantage of long-term export financing through an export credit agency (ECA) is the risk of ending up with an exchange rate that causes a large trade imbalance and high inflows or outflows of financial capital.
Another disadvantage is the potential for substantial long-term costs if it distracts businesses from focusing on real productivity gains.
Additionally, smaller economies may face more volatile inflation as their smaller economies can be unsettled by international movements of capital and goods.