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Remarks at the European Chiefs of Mission September Summit 2020 - Developments at the Export-Import Bank of the United States

Kimberly A. Reed, President and Chairman of the Board of Directors, Export-Import Bank of the United States

Sep 23, 2020 – European Court of Justice of the European Union, Luxembourg City, Grand Duchy of Luxembourg

Kimberly A. Reed
President and Chairman of the Board of Directors
Export-Import Bank of the United States

REMARKS AT THE EUROPEAN CHIEFS OF MISSION SEPTEMBER SUMMIT 2020

DEVELOPMENTS AT THE EXPORT-IMPORT BANK OF THE UNITED STATES

European Court of Justice of the European Union, Luxembourg City, Grand Duchy of Luxembourg

September 23, 2020

Remarks as Prepared for Delivery

Thank you, Ambassador Evans, for hosting the European Chiefs of Mission September Summit 2020 (September Summit) and inviting me to share key insights on the recently reopened, reauthorized, and transformed Export-Import Bank of the United States (EXIM).  It is an immense honor to join you, a distinguished group of 16 U.S. Ambassadors to Europe, at the September Summit as for discussions on topics important to the United States, Europe, and the world—ranging from U.S.-European relations to COVID-19 economic recovery to space cooperation to EXIM. 

I would like to thank and recognize each of you, as you do so much to help the world buy our great “Made in the USA” goods and services.  Thank you—

(Listed in order of precedence, with the host, Ambassador Evans, noted first above and also listed last.)

  • Ambassador Kay Bailey Hutchison, Permanent Representative of the United States to the North Atlantic Treaty Organization;
  • Ambassador George E. Glass, U.S. Ambassador to the Portuguese Republic
  • Ambassador Stephen B. King, U.S. Ambassador to the Czech Republic;
  • Ambassador Carla Sands, U.S. Ambassador to the Kingdom of Denmark;
  • Ambassador Jamie D. McCourt, U.S. Ambassador to the French Republic and Principality of Monaco;
  • Ambassador Callista L. Gingrich, U.S. Ambassador to the Holy See;
  • Ambassador Robert Kohorst, U.S. Ambassador to Croatia;
  • Ambassador Peter Hoekstra, U.S. Ambassador to the Netherlands;
  • Ambassador Richard Duke Buchan III, U.S. Ambassador to the Kingdom of Spain and the Principality of Andorra;
  • Ambassador Ronald J. Gidwitz, U.S. Ambassador to Belgium and Acting Representative of the United States to the European Union;
  • Ambassador Georgette Mosbacher, U.S. Ambassador to Poland
  • Ambassador Jeffrey Ross Gunter, U.S. Ambassador to Iceland;
  • Ambassador Lindy Blanchard, U.S. Ambassador to Slovenia; and
  • Ambassador Kenneth A. Howery, U.S. Ambassador to the Kingdom of Sweden;
  • Ambassador Adrian Zuckerman, U.S. Ambassador to Romania; and
  • Ambassador J. Randolph Evans, U.S. Ambassador to the Grand Duchy of Luxembourg and the Host Ambassador for the September Summit 2020.

And, I would like to recognize my Trump Administration interagency colleagues from the U.S. Department of State, U.S. Department of Commerce, and NASA.  We work together as a unified team for our country. Greetings—

  • U.S. Under Secretary of State for Economic Growth, Energy, and the Environment Keith Krach;
  • Counselor to the U.S. Department of States T. Ulrich Brechbuhl; and
  • National Aeronautics and Space Administration Acting Associate Administrator for International and Interagency Relations Mike Gold; and

U.S. Department of Commerce Director of the Office of Space Commerce Kevin O’Connell.

It also is an honor to meet with leaders of the from the Government of Luxembourg and the European Union.  Yesterday, Under Secretary Krach and I had a very productive meeting with Luxembourg Minster of Finance Pierre Gramegna and Luxembourg Export Credit Agency Chairman Arsène Jacoby.

As we gather in this beautiful building, the European Court of Justice of the European Union, for the September Summit, I wish at the outset to note that the United States suffered a great loss last week in the passing of Supreme Court Associate Justice Ruth Bader Ginsburg.  Many years before reaching the high court, Justice Ginsburg had begun devoting her legal career to ending the discrimination of women.  She practiced an unrivaled work ethic despite suffering devastating grief and many years of harrowing illness.  As a lawyer, and as a woman, I am grateful to her for inspiring thousands of American girls to aspire to the legal profession, and my prayers and condolences go out to Justice Ginsburg’s family.  The mark she left on history can never be effaced.

I have known our host, Ambassador J. Randolph “Randy” Evans for 20 years.  Mr. Ambassador, you are an accomplished leader, as evidenced by your arranging this unprecedented September Summit to discuss with candor the challenges and opportunities that lie ahead for the United States, Luxembourg, Europe, and the world.

Ambassador Evans, you also have a vision that extends literally to the stars.  Our gathering coincides with the visit to Luxembourg of a United States Space Delegation led by former House Speaker Newt Gingrich, Mike Gold of NASA, and Kevin O’Connell, the Director of the Office of Space Commerce at the U.S. Department of Commerce.  We at EXIM also are focused on space, and I hosted a call with 180 space technology leaders and stakeholders on July 9 as part of our new “Program on China and Transformational Exports” that I will be discussing in a few minutes.

All roads may lead to Rome, but lately, when it comes to space flight, all trajectories seem to lead to Luxembourg City.

Sixteen U.S. Ambassadors to Europe are here.  The word “ambassador” dates back to medieval French and Italian words that meant “to send.”  But “ambassador” is also associated with a word used during the Roman Empire—a word in the Gaulish language that means “servant.”  Where we are right now, Kirchberg, hugs an important ancient Roman road that linked Rheims in France to Trier in Germany, a road that servants of the Roman military helped construct.

One of the reasons it is such an honor to be with all of you is that in addition to being sent to a foreign land by the United States government, as U.S. Ambassadors you are also the American people’s servants.

You may not serve unto death, like the more than 5,000 American service members, who rest alongside General George S. Patton Jr. at the Luxembourg American Cemetery and who we paid our respect to this morning—but, on the other hand, sometimes ambassadors do give their lives, like Chris Stevens in Benghazi 12 years ago, or the six other U.S. Ambassadors who have been killed as they did their jobs serving the American people.

Patton made Luxembourg City his headquarters and his Third United States Army established the Luxembourg American Cemetery and Memorial, while contending with Nazi forces during the Battle of the Bulge in the final months of the war.  The bonds of friendship between America and Luxembourg are sealed with the blood that prevented totalitarianism from enslaving the whole of Europe.  As Ambassador Evans has eloquently put it, there is “a deep, indelible core between the two of us based on freedom and resisting conquering forces.”

Those fighters and those diplomats died in the cause of freedom, and one of the greatest blessings of freedom is being able to live a productive life, earn a livelihood, and pursue happiness.  I love serving our nation as President and Chairman of the Board of Directors of EXIM because my job, and the jobs of the 514 others who work alongside me at EXIM, is to support good-paying American jobs by facilitating the export of U.S. goods and services.  We do this by filling the gaps when private lenders are unwilling or unable to finance an export, and equipping U.S. businesses with the financing tools they need to compete for global sales.

I would also like to recognize and thank U.S. Ambassador Peter Hoekstra today.  I stand before you as the first woman Chairman of EXIM because of President Trump.  But, I also stand before you because 23 year ago, Ambassador Hoekstra, who was then Rep. Hoekstra (MI-2), hired me as a counsel on the U.S. House of Representatives Education and the Workforce Oversight Subcommittee, which he chaired.  In 1997, U.S. Speaker of the House of Representatives Newt Gingrich—who also joins us today—tasked Ambassador Hoekstra with looking at the future of the American workplace.  As part of the effort, called the “American Worker Project,” I put together Congressional hearings, roundtables, and site visits with businesses and workers all across our great country.  Life comes full circle, as I now have the honor of continuing the trajectory of this “American Worker Project” in my current role at EXIM—and nothing gives me greater happiness that to fight for and support our American workers.  Thank you, Ambassador Hoekstra, for giving me my start!

Building on this experience, I now respectfully request that all of you also serve as Ambassadors for America’s workers as we work together to level playing field—the extremely competitive global marketplace—for them.  Let us strategically collaborate so they can bring even more of their great, high-quality “Made in the USA” products and services to more customers around the world.  You may think I am joking, but I have been invited to join the U.S. State Department’s mandatory “Ambassador Training Camp,” which will soon include education on EXIM’s products and services.  And, I look forward to follow-up conversations with each of you.

Nearly all the nations to which you are assigned have government-backed export credit agencies (ECAs), counterparts to EXIM, and they are doing the kind of work EXIM is doing—but on behalf of their own domestic businesses and workers.  In some cases, EXIM has been working with our European sister ECAs. We have various types of co-financing agreements with ECAs of the Czech Republic, Denmark, Italy, the Netherlands, and Spain.  We also have an active framework agreement with BPI France that I am hopeful will be updated very soon.

I am happy to tell you that EXIM has an active partnership with the U.S. Foreign Commercial Service Officers and ECON Officers in your embassies.  You should also be aware that EXIM is under no restrictions to finance in any of your countries, and we are certainly interested in executing Memoranda of Understanding to facilitate future transactions with these nations.

That playing field I mentioned is far from level right now.  The People’s Republic of China’s massive subsidized export financing, totaling 90 percent of that provided by all G7 countries combined, has fostered much more export promotion by other countries and their ECAs, which are increasingly operating for the benefit of their nations’ companies and workers.  The world now has 115 known official export credit providers, up from 85 just four years earlier —a 35-percent increase.  The U.S. has no choice but to combat this aggression, and EXIM plays a central role.

Speaker Gingrich, who I am so delighted is with us, wrote in Newsweek that “in the age of Huawei, the Belt and Road Initiative, and China's state-sponsored companies, we need the U.S. Export-Import (EXIM) Bank more than ever.”

Huawei, which is at the mercy of Chinese law, would transform the free world’s 5G telecom systems into a transcontinental surveillance apparatus for Beijing.  And as the Speaker described it, “China offers large loans to smaller, poorer countries in exchange for the country's bolstering of Beijing's strategic interests.  Then, China takes control of the assets built with the money—ports, air fields, etc.—when the smaller countries can't cover the debt.”  One of many examples is Sri Lanka in 2017 signing away its strategically located Hambantota port facilities over to China when it couldn't pay back China’s $1.1 billion in loans.

Earlier this week, I met with the Prime Minister Kyriakos Mitsotakis of Greece and toured the Port of Piraeus with a tremendous U.S. delegation led by U.S. International Development Finance Corporation CEO Adam Boehler and included Special Advisor to the President on Serbia-Kosovo Ambassador Richard Grenell and U.S. Ambassador to Greece Geoffrey Pyatt.  The Port of Piraeus is the largest port in Greece and one of the largest ports in Europe.  It is strategically located between Europe and Asia.  In 2016, the People’s Republic of China state-owned shipping conglomerate COSCO purchased a majority stake in the Port of Piraeus.  Last year, Chinese President Xi said he wanted to turn the port into the “‘dragon head’ of plans to increase China’s influence in the Mediterranean.”

According to Speaker Gingrich, “Without EXIM, there is no practical, clear way to compete against the ever-expanding Chinese economic-military machine.”

President Trump is responding to this aggression because economic security is national security. This President is listening, learning and leading to assure that Americans and American companies have all the tools necessary to compete successfully against the rest of the word – no matter how big, like China, or how small, like the Grand Duchy of Luxembourg. I want to thank President Trump for his leadership, guidance and focus in the most challenging of times, and for wisely taking a whole-of-government approach, which prominently includes EXIM. Last year, the President and the U.S. Senate, on an overwhelming bipartisan basis, restored the quorum of EXIM’s Board of Directors and then enacted a seven-year reauthorization of EXIM—the longest in the agency’s 86-year history.

But President Trump and Congress added more to EXIM’s mission. In that reauthorization, the reopened EXIM is charged with establishing a new “Program on China and Transformational Exports” (China Program) to support the extension of loans, guarantees, and insurance to American exporters on terms competitive with those offered by the People’s Republic of China.  EXIM seeks to reserve at least 20% of our financing authority, or at least $27 billion of our $135 billion in financing, to “neutralize” Beijing’s export subsidies, advance the comparative leadership of the United States with respect to the PRC, and support U.S. innovation, employment, and technological standards through direct exports in 10 industries key to America’s prosperity and security.  These include 5G, artificial intelligence, biomedical sciences, biotechnology, and financial technology.

As Speaker Gingrich wrote last month in The Hill, EXIM’s new China Program will “better position the U.S. to push back on China’s global industrial policies and geopolitical ambitions.”  And, when it comes to detractors, the Speaker—who, like me, believes in free markets and that economic security is national security—put it in crisper, simpler terms to me last night: “You must ask them: Are you with us or are you with China?”

EXIM already has confounded some of Beijing’s designs.  In March, EXIM’s Board unanimously approved approximately $91.5 million in loan guarantee financing that supports U.S. exports of design engineering and construction services to Senegal.  Illinois’s Weldy-Lamont was selected for the project over foreign competition that was supported by at least four other governments, including China.  The transaction is expected to bring electricity to approximately 330,000 Senegalese in more than 400 villages while supporting an estimated 500 U.S. jobs in 14 U.S. states.

Another accomplishment was when Chinese and Russian financing was displaced by EXIM’s recent authorization of $4.7 billion in financing for U.S. exports to support construction of an integrated liquefied natural gas project in Mozambique, one of the largest transactions in EXIM’s history.  It will support 16,700 American jobs across 68 suppliers in eight states.

As I previously noted, over the course of this year, EXIM conducted a “Strengthening American Competitiveness” initiative to help lay the groundwork for our Program on China and Transformational Exports.  We held a series of eight teleconferences with American businesses and other stakeholders so we could better support exporters as they compete with China around the world. Each call focused on a different key industry sector.  Hundreds of people from business, think tanks, defense, the media—and even the Chinese embassy—listened in.  And media coverage of the teleconferences reported technology leaders expressing interest in EXIM financing so they can compete more effectively with China.

One of the teleconferences focused on space technology.  That Roman road on which Caesar’s legions marched through what is now Luxembourg City was some of the most advanced engineering technology in the world at the time.  But today, Luxembourg zooms forward in space innovation. This was one of the first nations in the world to launch its own commercial satellite.  And Luxembourg now recognizes that the astronauts of the future will be private entrepreneurs – men and women who refuse to take small steps – and who are determined to use space for productive purposes.

As Ambassador Evans and Speaker Gingrich wrote last year, Luxembourg adopted a regulatory regime that allows private companies to earn and recover a return on their investments in space, including ownership of minerals recovered in space.  Space companies that heard the news plotted a course for Luxembourg at warp speed.

The United States had the same foresight as Luxembourg on what the heavens have to offer mankind. U.S. Commerce Secretary Wilbur Ross, an ex officio member of EXIM’s Board of Directors, came to Luxembourg and signed a Memorandum of Understanding between the United States and the Grand Duchy.  Then, Luxembourg Space Agency director Marc Serres went to the United States and signed a Joint Statement of intent with NASA Administrator Jim Bridenstine.

But the space that awaits private celestial pioneers is no longer an empty void. The heavens today are being used for predatory purposes.  Twenty years ago, Congress established the U.S.-China Economic and Security Review Commission to monitor and investigate the national security implications of the People’s Republic of China’s trade and economic activity vis-a-vis the U.S.  That Commission’s 2019 Report to Congress warned that “Beijing aims to . . . capture important sectors of the global commercial space industry, including . . . through partnerships under what it has termed the ‘Space Silk Road.’”

The Commission’s report added that “China has jumpstarted its domestic space industry by engaging in an extensive campaign of intellectual property theft, generous state support to commercial startups, and predatory pricing for Chinese space services in the global space market.”  It pointed out that “Some of these initiatives are already challenging the U.S. space industry and U.S. leadership on international space cooperation.”

The Commission’s findings make it clear that Beijing is using aggressive state-backed financing to capture increasing shares of the world’s commercial launch and satellite markets, making it much harder for U.S. companies to compete.  Consider the fact that of nearly 90 new space companies established since 2014, most are supported by either the Chinese military, China’s defense industrial base, or Chinese state-owned R&D entities.

Beijing is driving out foreign competition and gaining control of the supply chain—one example being its 70 percent global domination of the mining, refining and production of germanium, a commodity that is essential for the solar panels used in satellites.  The Commission Report noted that the production of satellite solar panels “is effectively impossible without China’s raw materials.”

Then there is the Pentagon’s latest China Military Power Report, which points out that “China officially designated space as a new domain of warfare in its 2015 defense white paper, highlighting the importance of the space domain in strategic military competition.”

These facts are all tremendously disturbing.  Obviously, the commercial and military domination of space by the People’s Republic of China is not something the U.S. and the free world can live with.

But in countering this threat, EXIM is armed with our own in-house expertise.  We brought over a senior leader, well versed in Beijing’s activities from the Department of Defense to serve as my counselor and strategic adviser, and lead EXIM’s China Program.

And my EXIM colleague on our Board of Directors, Judith Pryor, has 20 years of experience in satellite communications, including work with WorldSpace Inc., COMSAT, and Orion Network Systems.

According to Paul Estey of the Colorado-based satellite manufacturer Maxar, EXIM “plays a crucial financing role that helps bring jobs, innovation and revenue to satellite manufacturing businesses across the U.S in the face of strong competition overseas.”

Under ancient Rome it may have been servitude that built what was then high-tech transportation, but it will be freedom—a private sector that reaches for the stars—that builds 21st century space technology.  That is, as long as we in both business and government stand firm against the enemies of freedom here on planet earth, who use both technology and financing as weapons.

The United States and Luxembourg are two nations committed to advancing liberty and prosperity.  Thank you, Ambassador Evans, for hosting this September Summit here in this amazing country.  And, to all of the U.S. Ambassadors to Europe here tonight, I look forward to further engagement with each of you, as well as with all of our U.S. Ambassadors around the world.  EXIM is a tool in our nation’s trade toolbox, and we together will do our utmost to strengthen the United States competitiveness around the world, support jobs for our nation’s workers, and keep America strong.

Thank you.  God bless you, God bless this land, and God Bless America.