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Speech
Linda Conlin
Member, Board of Directors
Export-Import Bank of the United States
Marshall & Ilsley Bank Roundtable
Milwaukee, Wisconsin
October 14, 2004
INTRODUCTION/ IMPORTANCE OF EXPORTING
Thank you for the opportunity to speak with you today. I want to thank Pauline Klaffenboeck from Marshall & Ilsley Bank for helping to organize this event. I would also like to thank Paul Churchill from the U.S. Export Assistance Center in Milwaukee, and Peter Beitzel from the Milwaukee Metropolitan Association of Commerce for sponsoring this event.
Before I came to Ex-Im Bank, I served as Assistant Secretary for Trade Development at the Department of Commerce. At Ex-Im Bank, I am still working to help U.S. companies, especially small businesses, to realize the potential in international markets through the resources of the federal government. Ex-Im Bank provides export financing, especially for small businesses, that otherwise would not be available.
I want you to know that I am also a former small business owner myself. I understand the challenges you face in today's market - meeting competition, maintaining cash flow, expanding your markets, and growing your business.
Ex-Im Bank can help to meet your exporting challenges. The Bank enables you to sell your products or services in foreign markets, particularly in developing markets, where commercial sources of financing are not readily available. We can help you and your buyer obtain the credit and ensure that you get paid for your foreign shipments.
My colleague Cheryl Conlin is also here today. She is one of three business development officers at Ex-Im Bank dedicated to helping more woman- and minority-owned companies get into or expand export sales. She will be presenting a more detailed presentation of how our products work.
I'll say more about Ex-Im Bank in a minute, but first I would like to offer a few comments on the growing importance of exporting in helping small businesses grow.
Exports have shown spectacular growth in the past 35 years, from about $40 billion in the late 1960s to nearly $1.1 trillion today. Exports have accounted for 25 percent of U.S. economic growth during the past decade. Today, exports support 12 million high-paying U.S. jobs. And these export-related jobs pay on average 30 percent higher wages than other jobs.
With global competition, U.S. companies can no longer rely solely on domestic markets for success. Increasingly, success depends upon the ability to compete in the global marketplace.
Conditions for exporting right now are better than ever, for several reasons. First, the world economy continues to strengthen. Second, the Bush Administration has aggressively moved to open markets and lower barriers to trade. The Administration is working with Congress to extend the benefits of free trade throughout the Western Hemisphere, Africa, Asia, and the Middle East.
President Bush said at the recent signing of the U.S.-Australia Free Trade Agreement, "Open trade is sound policy. It has a record of creating jobs, raising living standards and lowering consumer prices."
U.S. companies benefit directly from new trade agreements that slash foreign tariffs and remove barriers that disadvantage U.S. exporters and workers. Mack Truck, for example, has increased sales to Chile after the completion of the free trade agreement with Chile.
There are additional reasons to export now. Exchange rates are making many U.S. products more cost-competitive. Interest rates are still extremely low, which makes it easier to borrow for capital expansion.
Some 97 percent of U.S. exporters are small and medium-sized businesses. Yet small and medium-sized firms currently account for only 30 percent of the volume all U.S. exports.
EX-IM BANK ROLE/ PRODUCTS
At Ex-Im Bank, we think this means there is a lot more business that small businesses could be doing in overseas markets.
Access to capital is a critical issue: It can be hard for a small business to obtain credit from commercial lenders. Often, small businesses have trouble securing the financing tools for exporting.
Enter Ex-Im Bank. 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.
The Bank has been in business for nearly 71 years and has supported over $400 billion of U.S. exports over that time.
Ex-Im Bank was established by President Franklin Roosevelt to help jump-start the economy mired in the Depression. The world was very different then. Exports totaled just over $2 billion in an overall U.S. economy of $61 billion. Today, exports are valued at $1 trillion in a U.S. economy of $11 trillion. About one in 10 jobs is now export-related.
Today, Ex-Im Bank finances every kind of U.S. export - from commercial aircraft and large capital equipment, to parts, raw materials, food and consumer goods. We also finance U.S. exports of services, such as engineering services, architectural or design services, and training.
Our colleagues at the Commerce Department can help you identify markets and find customers. Often, your best opportunities are in developing markets where commercial sources of financing are not readily available.
This is where Ex-Im Bank can open doors. We make sure you get paid for your foreign shipments and also help you and your foreign buyers obtain the credit you need. Last year, Ex-Im Bank assisted in financing over 2,700 U.S. export sales valued at a total of $14.3 billion.
Lots of Wisconsin companies are benefiting from our products. In the past five years, we've supported more than $425 million of Wisconsin exports from more than 100 companies.
We offer three primary products:
Working Capital Guarantees - Ex-Im Bank can guarantee working capital loans from commercial lenders, which gives you greater access to capital for pre-export costs and cash flow.
Short-term Export Credit Insurance - We offer short-term export credit insurance to protect your foreign receivables from the risk of buyer nonpayment. Our insurance also helps you obtain working capital because banks are more likely to lend when your foreign receivables are insured. The repayment term is typically 180 days but can be up to 360 days.
Medium-Term and Long-Term Financing - We can help your international buyers obtain the medium-term and long-term financing to buy your products or services. We provide insurance or loan guarantees on repayment terms of one year or more that enable you to offer competitive financing. Medium-term is one to five years, long-term is usually five years or more.
Some examples of how these products are working in Wisconsin:
We provide short-term multibuyer insurance for companies like the Wacker Corporation in Menomonee Falls, which is world-renowned for its construction equipment, to expand its export sales.
Schenck-Accurate, a manufacturer of metering equipment in Whitewater, also uses our multibuyer insurance to sell to customers in several markets.
We offer a policy with special enhancements to help small businesses export. One local user of our small business policy is Regal Ware in Kewaskum, a well-known manufacturer of cookware and kitchen appliances.
As I mentioned, we also offer a product specifically geared toward meeting working capital needs. Most of Ex-Im Bank's working capital guarantees are done directly through commercial lenders that we call "delegated authority" lenders. They can commit Ex-Im Bank's guarantee at the time of the credit decision without prior approval from Ex-Im Bank, and that expedites your access to capital. Associated Bank in Green Bay is one such lender, but in all, there are more than 200 of Ex-Im Bank delegated authority lenders nationwide.
Finally, Ex-Im Bank can also help your international buyers obtain credit to purchase your exports on longer repayment terms. For example, GE Healthcare in Waukesha has been benefiting as a supplier to export transactions that we have helped to finance for medical facilities in Russia, Colombia, and Brazil, among others.
Ex-Im Bank offers a range of financial products to meet your export finance needs. And small businesses in Wisconsin are growing their exports with this financing.
EX-IM BANK AND EMERGING MARKETS
I would like to conclude with a few words about the international markets where we operate. Ex-Im Bank is open for business in more than 150 countries and active in about 90 of these markets.
We are active in emerging markets in Latin America, Asia, Africa, the Middle East, and Eastern and Central Europe.
Latin America - Mexico remains largest Ex-Im Bank market. This year we have been very active in support of U.S. exports of oil and gas equipment and services. Our medium-term financing being used to support wide range of U.S. exports - agricultural equipment, medical equipment, and all kinds of capital goods. Small and medium-sized U.S companies are doing a lot of this business. We're also active in Brazil and in Central America.
Asia - Ex-Im Bank is increasing support for U.S. exports to India. We have helped U.S. companies sell many kinds of exports - from refinery equipment and commercial jets to software and other products for India's booming high-tech sector.
In Pakistan, we just reopened this year for all products in the public sector. We have already supported large commercial aircraft sales to Pakistan International Airlines, and we have supported aircraft sales to Vietnam as well.
Africa - Ex-Im Bank is a significant player in Africa. This fiscal year, we are expecting the number of transactions we supported in Africa to top 200, totaling more than $700 million in value.
A couple of weeks ago, Ex-Im Bank co-sponsored with the Corporate Council on Africa a continent-wide African conference on infrastructure projects. We brought together project sponsors, U.S. exporters, and trade financiers. We expect to see good business from this conference.
Of course, much of our Africa financing has been to support U.S. large commercial aircraft and exports to large projects such as the Chad-Cameroon pipeline and U.S. exports to Sonatrach, Algeria's national oil and gas company.
But we're also available to do smaller deals. For example, we have done $25,000 deals to Nigeria and South Africa for spare parts and medical equipment.
Middle East - Ex-Im Bank is beginning to be more active supporting U.S. exports to Egypt and Jordan. We are also opening up exciting opportunities with a new framework agreement with the Iraq interim government to provide short-term insurance to support exports of U.S. goods and services to Iraq.
Eurasia - Ex-Im Bank active in supporting U.S. exports to Russia, Kazakhstan, Turkey and other countries in the region. This year, for example, we have supported strong medium-term sales of agricultural equipment by John Deere and other companies to Russia and Kazakhstan, as well as U.S. mining and medical equipment to Russia.
Ex-Im Bank is supporting all kinds of U.S. exports to Turkey, which is becoming very active market. We are also looking to do more in Eastern and Central Europe. Our chairman is going to Romania soon.
In conclusion, Ex-Im Bank can open doors for you in the very emerging markets where some of your best new opportunities lie.
ACCESS TO EX-IM BANK
Ex-Im Bank is very accessible. We have a domestic Business Development team based in Washington, D.C., but also working through regional offices in New York, Chicago, Houston, Miami, and Long Beach, California, as well as several other offices in California.
Our Midwest regional office, based in Chicago, is instrumental in helping Wisconsin companies use our financing.
You can find out more about Ex-Im Bank on our Web site at www.exim.gov or by calling 1-800-565-EXIM. The Web site provides regional office contacts and other information you need to get started. Also take a look at the interagency Web site, www.export.gov, which has information on all the trade resources of the federal government.
Thank you for giving me this opportunity to tell you what Ex-Im Bank can do to help you capitalize your global opportunities. We look forward to doing business with you.
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