Speech

Good morning. I am the newest member of Ex-Im Bank's Board of Directors. I was sworn in just last week. I am truly honored to serve on Ex-Im Bank's Board, and I'm delighted to participate in CelebrAsian 2004. I want to talk to you today about the financial products that Ex-Im Bank offers to help you export, especially to markets in East and South Asia.

But first I'd like to say a little about my trade experience in the Bush Administration. Before I came to Ex-Im Bank, I was Assistant Secretary for Trade Development at the Department of Commerce. I directed a program to identify market opportunities by industry sector, address trade barriers, and advocate on behalf of small businesses as well as large corporations.

I was proud to work for U.S. Commerce Secretary Don Evans. He has been called the President's - and our country's - "Economic Warrior." He has worked tirelessly to open world markets for U.S. exports and ensure that American companies can compete in global markets on a level playing field.

President Bush has suggested three guiding principles for government - that it be citizen-centered, results-oriented, and market driven. These are the principles under which we operate.

I want to assure you that President Bush and his entire trade team are dedicated to helping U.S. companies expand through exporting. But we recognize that there are obstacles. One of the main barriers to exporting is getting the financing.

This is especially true for small businesses. As a former small business owner myself, I know how challenging it is to operate a small business. I know how careful you need to be about cash flow and how hard it can be to obtain credit from commercial lenders. Often, small businesses have difficulty securing the financing tools for exporting.

EX-IM BANK

That's where my agency, the Export-Import Bank of the United States, comes in. Ex-Im Bank is our country's export credit agency. We are mandated to carry out one mission - to finance U.S. exports. In the process, we help U.S. companies create and sustain jobs.

Ex-Im Bank's mission is to help finance U.S. exports, mainly to developing markets. We accept political and commercial risks that the private sector cannot. We serve companies of all sizes. No transaction is too small or too large.

In 2003, Ex-Im Bank supported more than $14 billion of U.S. exports to markets around the globe. I know that many of you are involved in exporting to Asia. About one-third of Ex-Im Bank's exposure is in Asian markets. We're doing a lot in these emerging markets.

Many of you are based here in California, and as you know, California is the second leading export state in the country. In the past five years, Ex-Im Bank has supported almost $10 billion of California exports to markets worldwide.

We finance every kind of U.S. export - from oil field equipment and technology, to large commercial aircraft, power projects, machinery, raw materials, food, and consumer goods. We also finance exports of services, such as engineering services, architectural or design services, and training.

If a U.S. company needs money to produce or buy goods or services to fulfill an export sales order, we can guarantee a working capital loan or line of credit from a commercial bank. Banks are much more willing to make these working capital loans when they are backed by our guarantee.

And we make it easy for you to obtain these loans. Most of our working capital guarantees are done through delegated authority lenders that can commit Ex-Im Bank's working capital guarantee directly for their customers. This program expedites processing and enables U.S. companies to do one-stop-shopping for financial services.

Many of these delegated authority lenders focus on small business. For example, at our annual conference last week in Washington, D.C., Ex-Im Bank honored one such lender that is located right here in the Los Angeles area. We gave a small business regional bank award to Guaranty Bank of California, based in West Los Angeles.

Guaranty Bank of California is one of our top delegated authority lenders in the West. We also have many others in California and throughout the country. You can find a complete list of our delegated authority lenders on our Web site, www.exim.gov. It has a wealth of information about our programs.

Now if a U.S. company or a financial institution needs to insure foreign receivables, Ex-Im Bank also has a solution - short-term export credit insurance to cover commercial and political risks of a foreign buyer defaulting on payment.

In fact, last week at our annual conference, another California company won our Small Business Exporter of the Year award for their effective use of our insurance and working capital financing.

Bluefield Associates of Ontario, California, is a small, minority-owned manufacturer of skin-care products that exports to West Africa and other areas. The company started using Ex-Im Bank's small business multibuyer policy in 1999. Since then, they've added 32 employees to their payroll and increased their foreign buyers. Since 2002, Bluefield has been using an Ex-Im Bank-guaranteed working capital loan from East West Bank of San Marino, California.

This is just one example of the countless small businesses that have benefited from Ex-Im Bank's financing. In fact, more than 80 percent of our transactions directly benefit small businesses. These two products, short-term export credit insurance and working capital loan guarantees, are the mainstays of our small business support.

But we also offer financing to foreign buyers of U.S. goods and services in the forms of insurance and loan guarantees. Repayment terms are typically one-to-five years for medium term, and five years or more for long term.

We also offer financing enhancements, such as longer repayment terms and local cost financing, to support U.S. exports of medical equipment, environmentally beneficial goods or services, and exports related to transportation security. These exports are in high demand in the developing markets of Asia and elsewhere.

We make our financing available through commercial lenders. Banks benefit from working with Ex-Im Bank because we reduce the risk so they can offer more competitive rates. Using our financing, many banks have developed profitable trade finance divisions and attracted more customers.

Here's an example of one such bank that has really expanded its trade finance portfolio with our financing. Last week, we gave our Small Business Bank of the Year award to Toronto-Dominion Bank.

One of Canada's largest banks, Toronto-Dominion's trade specialty is providing Ex-Im Bank's medium-term financing for foreign buyers. That has benefited small and medium-sized exporters all across the United States.

Toronto-Dominion is now Ex-Im Bank's third largest lending partner in terms of the number of transactions. This is a great example of how our financing can help commercial lenders realize the profitability of trade finance and help make more of this financing available for you.

ASIAN MARKETS

Many of you represent companies that do a lot of business in Asia or are looking to expand your sales there. Now I would like to give you a brief profile of Ex-Im Bank in Asia.

As I mentioned, at the close of the last fiscal year, Ex-Im Bank's Asian exposure was in excess of $20 billion, and that was one third of our overall exposure. Our largest country exposures in Asia are in China, followed by Indonesia, Taiwan, the Philippines, Thailand, and India.

Much of the dollar volume of Ex-Im Bank's recent financing in Asia, as elsewhere, is related to our support for Boeing commercial aircraft. You know, there are only two manufacturers of large commercial aircraft in the world - the Boeing Company and a European manufacturer, Airbus.

Our financing for Boeing exports has helped to level the playing field for this largest U.S. exporter. It has helped tens of thousands of Boeing suppliers, many of which are small businesses, to stay in business and maintain U.S. jobs.

But we support a lot more than U.S. aircraft to Asia. Last year, we did our first limited recourse project finance deal in China. We approved a $200 million loan guarantee to support U.S. exports to build the Nanhai Petrochemical Complex in Guangdong Province.

This kind of financing is useful in developing markets because the repayment is based on project revenues, rather than on a guarantee of the debt by the host country government. We would like to do more in China in using project finance and our other products.

Among the ASEAN countries, the Philippines remains a steady Ex-Im Bank customer. We're supporting a diverse range of U.S. exports to the Philippines. For example, our financing for the Leyte geothermal project was the first time that a U.S. small business, Ormat International of Sparks, Nevada, exported through our project financing.

In another example, Sun Microsystems Inc. of Palo Alto used our guarantee to finance sales of computer services, software and installation services to the Philippine Long Distance Telephone Company.

We are also doing a lot of medium-term transactions in this market. The average transaction is under $10 million for a variety of capital goods exports.

In Thailand, Malaysia, and Indonesia, we've supported major Boeing sales, as well as multimillion dollar exports of technology and services to the ShinSat telecommunications project in Thailand, a semiconductor manufacturer in Malaysia, and the Cilicap oil refinery in Indonesia. We also recently supported helicopters sales to Indonesia by Raytheon and Enstrom Helicopter Corporation, a small business in Michigan.

Another ASEAN market that we're very excited about is Vietnam. Our Chairman Philip Merrill traveled to Vietnam in February and met with the prime minister, government officials and business leaders.

We've done our first deal in Vietnam for Boeing. But we really want to encourage U.S. companies of all sizes and industries to get in on the ground floor in this market.

The U.S. Foreign Commercial Service has identified key sectors for U.S. export growth in Vietnam, such as medical equipment, transportation security equipment, telecommunications, environmental exports, education and training. The opportunities are vast.

I'm happy to say that Ex-Im Bank is open in Vietnam for all of our regular financing in the public sector. We're also open for short-term and medium-term financing in the private sector.

In South Korea, Ex-Im Bank is offering all of our financial products in both the public and private sectors. We support U.S. exports to this market when needed.

Chairman Merrill also traveled to South Korea in February and signed a memorandum of understanding with the Export-Import Bank of Korea. The agreement pledges cooperation and proposes joint efforts in co-financing.

Co-financing is a concept where Ex-Im Bank does a joint financing with a foreign export credit agency. Each ECA supports the exports of its own country. We've done successful co-financings with several countries, including Turkey, Mexico, and Russia. In a global economy, this mechanism works well to support U.S. exports to third countries.

I will close my Asian profile with a look at South Asia. The big news this year is that Ex-Im Bank has just opened in Pakistan for all of our financial products in the public sector.

Pakistan's upgraded risk rating confirms the positive economic developments that have occurred in that country, including a reduction in external debt and growth in exports and foreign exchange reserves. We will consider any sovereign transaction to support U.S. exports to Pakistan.

We're also very positive on India. India, of course, is a giant market in South Asia. Ex-Im Bank has more than $1 billion of exposure in India. We've supported U.S. exports such aircraft, petrochemical equipment, and software technology to this market. Ex-Im Bank is completely open for financing in India.

CONCLUSION

That wraps up my quick tour of Ex-Im Bank in Asia. In conclusion, I want to reiterate that Ex-Im Bank is very active in these markets.

I would like to leave you with the thought that regardless of the size of your company, there are ways that your business can grow through expanded trade. Remember, you don't have to do it alone. The U.S. government offers trade services to assist you.

If you need help getting started, the Commerce Department operates U.S. Export Assistance Centers across the country. Their trade specialists can help identify markets and potential customers. To find these centers and more, go to the U.S. government's Internet port for export assistance at www.export.gov.

Once again, Ex-Im Bank has regional offices in New York, Miami, Houston, Chicago, and several in California. Our West regional office is based in Long Beach, and we also have satellite offices in Orange County, San Diego, and San Francisco. The director of our West regional office, David Josephson, is here with me today. Our regional offices are eager to serve you.

In closing, I just want to say that if you are not already doing so, I urge each of you to look to overseas markets to grow your companies. The United States represents only five percent of the world's population. The other 95 percent lives outside our borders. Let Ex-Im Bank and the other U.S. trade agencies help you to make them your customers. Thank you.