Why is Congress finding it difficult to pass legislation that helps U.S. business export to developing countries, supports U.S. jobs, and sends money to the U.S. Treasury? The subject is the U.S. Export-Import Bank, which for eight decades has helped U.S. exporters “get paid” but which may be in its last days due to a persistent echo-chamber of falsehoods and misunderstandings. Urge your Senators and Representative to support “Ex-Im” reauthorization.
Opponents of the Bank, including leading members of the House of Representatives who appear to be happy to let the Bank’s authorization expire on September 30, are missing or ignoring many vital pieces of information. In short, three of these are:
- Ex-Im Bank does not replace private sector lending. The Bank partners with private sector lenders to fill in the gaps to support U.S. exports to developing countries. For example, while a private-sector institution can finance the lower risk portion of the transaction, Ex-Im is prepared to finance the higher-risk portion, while also guaranteeing the loan made by the private sector bank. This is all to lower the risk for the exporter, who wants assurance of being paid for the exports.
- Small and medium-sized enterprises (SMEs) benefit from the Bank’s services not only through some direct access but also through the Bank’s support for exports by larger companies that use SMEs as suppliers. If large companies cannot make sales abroad because financing cannot be found, then equipment and components do not need to be bought from SMEs. As Linda Dempsey, vice president of the National Association of Manufacturers, said recently, “If Congress fails to take up a reauthorization bill, people are going to lose their jobs, businesses and supply chains around the country will be impacted, and constituents are going to want to know why.”
- The U.S. does not unilaterally “disarm” in the face of fierce international competition and Congress must act to keep the proverbial “level playing field” from tipping so far out of balance that it crushes U.S. manufacturers’ competitiveness. Every major competitor of the U.S., including China and Germany, has an active government agency to provide financing and other support to exports from their country – these will not go away if Ex-Im does. For example, U.S. companies have cited the importance of Ex-Im financing in their race to compete with China to build infrastructure in Africa. One Texas businessesman said of his Representative, who opposes Ex-Im, “I don’t know what experience he has doing business overseas, but it is very competitive trying to sell goods outside of the U.S.” Perhaps Congress would prefer it if the U.S men’s soccer team fielded only 5 players versus 11 counterparts at the World Cup?
Join over 800 companies and organizations, including NEMA, to support reauthorization of the U.S. Export-Import Bank this summer.