Ex-Im Bank has authority to support SMEs
and transactions less than $10 million.
The Coalition for Employment through Exports (CEE) responds to conservative attacks upon the critical role that Ex-Im Bank plays in supporting exports and U.S. jobs.
Small businesses and mid-market companies depend on Ex-Im Bank financing programs to enable them to expand, create and support more U.S. jobs.
Export Credit Agencies (ECAs) facilitate and support a country’s exports. As competitor ECAs become larger, more proactive and aggressive, U.S. companies lose out.
If the Ex-Im Bank is not reauthorized, hundreds of thousands of jobs will be lost and U.S. companies will seek more supportive business climates abroad.
Transactions in the hundreds of millions have already been lost, hurting exporters across the country as well as the hundreds of suppliers that provide services and components that are a part of the equipment to be exported. To cite but one example, the $500 million next stage clean water infrastructure project in the Cameroon, highlighted during the reauthorization effort, has been lost to the Chinese.
Billions of dollars in additional export transactions in the Bank’s pipeline are at risk of loss. Ex-Im Bank has reported about $10 billion in its pipeline awaiting a Board quorum. While the Bank remains frozen, other export credit agencies around the world are arguing to prospective buyers of American equipment and services that they cannot trust the U.S. to be there when needed; it is simply undependable.
Ex-Im Bank has been unable to approve transactions of more than $10 million since June 30, 2015. Transactions over $100 million or more have not been accepted for consideration by the Bank since late May of last year, due to the 25 day Congressional review period that cutoff the Bank application process a month before the actual closure of the Bank last June 30th.
But the negative impact of Ex-Im Bank’s crippled condition goes well beyond the transactions in the Bank pipeline—the longer U.S. exporters sit on the sidelines, unable to obtain competitive financing like their competition around the world, the more both they and their prospective buyers get comfortable seeking non-U.S. export credit agencies (ECAs) with which to do business.
And these ECAs are eager to entice U.S. exporters to build facilities in their countries in return for access to competitive non-U.S. financing that is independent of the whims of a recalcitrant U.S. Congress. But lets be clear—what these ECAs ask for in return is good manufacturing jobs, jobs that would otherwise be located in the U.S. Without a fully functioning Ex-Im Bank, major exporters are left with a Hobbesian choice—engage with other ECAs or forfeit sales for a lack of competitive financing. For U.S. manufacturing workers and their jobs, it is a lose-lose proposition—thanks to a failure by the Senate to provide the Ex-Im Bank Board with the conservative Republican that has been nominated by the President.
AIIB to kick into gear in Central Asia
The Asian Infrastructure Investment Bank (AIIB) has announced details of its first financing, as it moves towards disbursing its first loan.