Remarks by EXIM President and Chairman Kimberly Reed at the American Association of Port Authorities Shifting Trade Conference
Thank you, American Association of Port Authorities (AAPA) Chris Connor, for that kind introduction. My thanks also goes to AAPA General Counsel Cary Davis. It also is great to be on stage with a fellow Bush Administration colleague and former Federal Maritime Commissioner Paul Anderson. Paul now is doing an outstanding job as the Port Tampa Bay President and CEO.
It is an honor to be with all of you —100 port and supply chain executives and senior port officials from the United States and other Western Hemisphere nations — in Florida today, as you play a vital role in supporting U.S. exports. The Export-Import Bank of the United States (EXIM) could not fulfill our mission of supporting American jobs by facilitating U.S. exports without your hard work and dedication. Thank you!
Just last October, I had the privilege of visiting the Port of Houston and participating in a roundtable discussion with business leaders, many of whom use that port to export their products.
And last week at the United States Conference of Mayors Winter Meeting, I spoke on a panel with Mayor Kevin Faulconer of San Diego, home to one of California’s five major ports. I hope to have the opportunity to visit many of you around the country throughout this year.
I also had the pleasure to get to know Dr. Ricaurte Vásquez Morales, Administrator of the Panama Canal Authority, last night. Dr. Vásquez, thank you for your efforts. Cargo activity supports 31 million U.S. jobs. For every $1 billion in exports shipped through U.S. seaports, 15,000 U.S. jobs are created. The expansion of the Panama Canal is important for U.S. businesses being able to succeed at a higher level.
When I became Chairman of EXIM last May, President Trump charged me with securing a long-term reauthorization and empowered me to enact important reforms that will leave a lasting, positive legacy at the agency, allowing us to fulfill our newly-launched vision of “Keeping America Strong: Empowering U.S. Businesses and Workers to Compete Globally.” I am excited to announce we are doing just that.
The first step in accomplishing this vision was to ensure a long-term reauthorization of the Export-Import Bank. In December, President Trump signed into law a historic seven-year reauthorization of the agency – the longest in EXIM’s nearly 86-year history.
I am grateful for our bipartisan leaders in Congress, EXIM’s 400 dedicated employees, my fellow EXIM Board Members Spencer Bachus and Judith Pryor, and ex officio Board Members Secretary of Commerce Wilbur Ross and U.S. Trade Representative Ambassador Robert Lighthizer with this effort. And most of all, I thank President Trump for getting our historic reauthorization past the finish line.
We have all worked hard to deliver on the goals I announced on my first day at EXIM: fully reopening, reforming, and reauthorizing the agency, allowing us to do great things on behalf of the United States’ workers, manufacturers, and service providers, all while protecting the American taxpayer.
In a speech to the World Economic Forum last week, President Trump spoke of our strong U.S. economy, saying “America achieved this stunning turnaround not by making minor changes to a handful of policies, but by adopting a whole new approach centered entirely on the wellbeing of the American worker.”
This approach is paying off. The American economy is booming and the national unemployment rate has reached record lows.
That record low unemployment can certainly be seen here in Florida! Just this past Friday, the Department of Economic Opportunity announced that the unemployment rate in Florida dropped to 3.0 percent, the lowest recorded mark in Florida’s history.
That low unemployment wouldn’t be possible without the contribution of American small businesses. As Chairman of EXIM, it’s been one of my top priorities to better support American small businesses that want to export. I am pleased to say that since I arrived in May 2019, EXIM has completed over 1,300 transactions with small businesses, totaling over $1.38 billion in authorizations. Many of those small businesses are located right here in Florida!
Trade supports jobs for large and small businesses alike and in order to fully support the American worker, we need to win on trade. President Trump is doing just that. In fact, he has signed two historic trade deals – one with Japan and another with China.
And, later this morning, he will sign the United States-Mexico-Canada Agreement (USMCA) at the White House, a deal that is a win for American workers, farmers, ranchers, and businesses, and a great partnership with Mexico and Canada. I was invited to be with the President at the White House today for the USMCA ceremony, but graciously declined. You are on the front lines when it comes to trade and I wanted to celebrate this victory with all of you!
Clearly, trade policy that supports the American worker is a priority for President Trump, and I am pleased that EXIM plays such a critical role towards that objective.
As many of you know, the export credit market is quickly changing. In 2015, there were 85 export credit providers around the world, whereas now, there are 113. That is an increase of nearly 33% in only a few short years.
These ECAs are no longer just about supporting exports. Increasingly, many are being used as instruments to achieve strategic policy objectives by their governments.
China alone has three ECAs, each of which are used to promote their national interest, particularly the “Belt and Road Initiative.” In 2018, China’s ECAs provided roughly the same amount of official medium- and long-term export credit financing as the ECAs of the United States, United Kingdom, France, Japan, Canada, Italy, and Germany combined.
The sheer volume of the Chinese activity is not the only source of concern. They do not play fair. They operate at a large volume outside the terms of the Organization for Economic Co-operation and Development (OECD) Arrangement on Officially Supported Export Credits, which governs official export credit activity globally. Businesses engaging with China find themselves victim to unfair trade practices, forced technology transfer, intellectual property theft, and quotas.
Countries that rely on Chinese financing are increasingly finding themselves stuck in a debt trap, in which China has the upper hand. You may be familiar with the fate of the Hambantota [Ham-ban-tota] Port in Sri Lanka. Sri Lanka took on massive debt to China in order to build the port, even though there was questionable commercial value. Several years later, with rising debt and next to no profit, Sri Lanka turned over the keys to the Port directly to China. The same day, China’s state-run news agency boasted on Twitter“Another milestone along path of #BeltandRoad.”
This pattern is becoming too common in regions of strategic importance to the United States like the Indo-Pacific, Latin America, and Sub-Saharan Africa.
President Trump recognizes the need for U.S. investment abroad and has launched several initiatives to promote investment and two-way trade between the United States and regions of strategic significance. EXIM plays a vital role in these initiatives by making exporting a viable option for U.S. companies when private sector financing is not available.
In December, the administration launched a whole-of-government approach to incentivize infrastructure and energy investments in the Western Hemisphere called America Crece – Growth in the Americas.
The region needs $100 - $150 billion in new annual infrastructure investment, and the initiative focuses on enabling an environment for private-sector investment in the western hemisphere that is transparent, competitive, and in line with international best practices.
In addition to focusing on the western hemisphere, EXIM supports economic prosperity and growth in Sub-Saharan Africa, a key component of the Administration’s Prosper Africa initiative. Through collaboration with the private sector, Prosper Africa is seeking to substantially increase two-way trade and investment between the United States and Africa.
Stories like the one in Sri Lanka have played out across the African continent as well. Djibouti is home to the U.S.’s largest military base in Africa and stands at the entrance to the Red Sea, but unfortunately at the end of 2019, Djibouti’s debt to China was 71% of their GDP. As a part of their Belt and Road initiative, China built a multipurpose cargo facility at Djibouti’s Doraleh Container Terminal, and Djibouti handed over a quarter of its stake to in the terminal China Merchants Port Holdings.
For countries around the world like Sri Lanka and Djibouti, the United States is offering a different path – a robust trade and investment relationship based on our shared commitment to democracy, human rights, and the rule of law. EXIM is committed to matching resources of the United States with the demand for American-made goods and services around the world.
President Trump has engaged directly with China, and has sought to promote a free, fair, and reciprocal economic relationship. Phase one of the China Trade Deal was a huge win for American businesses, farmers, manufacturers, and innovators. This deal will mean increased access to Chinese markets, and increased traffic through many of your ports.
But, economic security is national security, and EXIM will not sit idly while China uses these unfair trade practices around the world, often at the expense of American workers. We have a vital role to play in ensuring U.S. companies can compete with China on a global scale, and our historic seven-year reauthorization provides clear direction that EXIM should continue to focus on the economic and national security challenges from China.
The law directs EXIM to establish a “Program on China and Transformational Exports.” This program sets a goal of reserving 20 percent of EXIM’s total financing authority, equal to $27 billion, for exports that compete directly with China, with a focus on artificial intelligence, biotechnology, biomedical sciences, emerging financial technologies, high-performance and quantum computing, renewable energy, semiconductor and semiconductor machinery manufacturing, water treatment and sanitation, and wireless communication (5G).
Already, EXIM has helped U.S. companies as they compete with China, all while supporting jobs and economic growth at home.
The first deal our board of directors approved after the quorum was restored was for the development and construction of an integrated liquefied natural gas (LNG) project in Mozambique. Both China and Russia were slated to finance this deal before the board quorum was restored, but the project will now be completed without their involvement. Instead, “Made in the USA" products and services will be used.
This is just one of the many examples showing the impactful role EXIM has in promoting American exports. There are many more. We are committed to ensuring popcorn from Alabama reaches customers in Canada, vitamins from Illinois reach customers in Poland, and honey from Hawaii reaches customers in Japan.
During my swearing-in in the Oval Office, President Trump told me he wants “the world to see more products stamped with those four beautiful words – ‘Made in the USA.’”
We cannot do this alone. All of you play a vital role in ensuring EXIM meets our mission of supporting American jobs by facilitating U.S. exports.
Before I finish, I would like to invite you to our 2020 Annual EXIM Conference in Washington, D.C., on April 2nd and 3rd. We have confirmed Ambassador Robert O’Brien, the National Security Advisor, Larry Kudlow, the Director of the National Economic Council, Carlyle Group Co-Executive Chairman David Rubenstein, and many more great speakers who will be announced in the next few weeks.
I look forward to working with you in order to “do great things” on behalf of American workers, the U.S. economy, and prosperity and freedom around the world.