Remarks by EXIM President and Chairman Kimberly Reed at the International Economic Forum of the Americas – Toronto Global Forum
Sep 05, 2019 – Toronto, Ontario, Canada
Thank you, Geoffrey, for that kind introduction.
And, thank you, Your Excellency, Madam Vice President Robredo, for your remarks and leadership on women’s issues in the Philippines.
It has been almost exactly four months since I was sworn in as the first woman President and Chairman of the Export-Import Bank of the United States.
It is an honor to be with all of you – 3,300 registrants – here today – at the 25th anniversary of the International Economic Forum of the America’s Toronto Global Forum.
I was last in Toronto in 1982, when my grandparents brought me here at age 11 to see the impressive CN Tower on our way to their summer vacation cottage in Bobcaygeon. I was thrilled to see the CN Tower again last night.
I also look forward to talking with my Canadian counterpart – Mairead Lavery, President and CEO, of Export Development Canada – later today. Canada was the one nation not in attendance at the G12 Heads of Export Credit Agencies meeting hosted by China in May. I participated in this meeting as my first official international act immediately after being sworn in as the new leader of EXIM. I also look forward to continuing the dialogue with President Lavery at the 2020 G12 that EXIM will be hosting in Washington next spring.
As many of you know, EXIM was not fully functional for about four years because the agency lacked a quorum of its board of directors.
EXIM now is fully functioning again because President Trump delivered this victory for the American people. That’s why I especially like the theme of this conference: Leading the New Economy.
In May, I was fortunate enough to have a ceremonial swearing-in in the Oval Office at the White House.
While I was there, President Trump told me to “do great things” and to “lead this institution to new heights” so that “the world will see more products stamped with those four beautiful words: Made in the USA.”
And, this is what I intend to do.
I am fully committed to doing great things on behalf of the United States’ great manufacturers, service providers, and workers, while protecting the U.S. taxpayer.
President Trump understands how the mission of EXIM supports his agenda of creating jobs and bringing manufacturing back to the USA. In the last 10 years, the agency has supported more than one million private-sector American jobs.
As you might imagine, EXIM has a pipeline of current applications that need board consideration – more than $40 billion in transactions that would support nearly a quarter-million good jobs. Our talented EXIM staff are now working through the applications at a thoughtful, reasonable, and responsible pace.
And, though we want to make our way through the pipeline, protecting the interests of U.S. taxpayers is still paramount to us. The fact that the agency has a default rate of one-half-of-one-percent shows the prudence of EXIM’s staff. We want to keep doing good deals that help our great U.S. businesses on behalf of the American people.
This morning’s plenary session is entitled: “The Next Generation of Infrastructure.” As we all know, infrastructure is a strategic issue.
Right after I was confirmed, I had the pleasure of participating in a Center for Strategic and International Studies (CSIS) discussion on its Global Infrastructure Task Force initiative called: The Higher Road – Forging a U.S. Strategy for the Global Infrastructure Challenge.
One of the CSIS project directors – Daniel Runde – also now serves as the new Chairman of EXIM’s Sub-Saharan Africa Advisory Committee. He will lead our Sub-Saharan Advisory Committee meeting on September 11 at EXIM’s headquarters in Washington.
The CSIS Global Infrastructure Task Force recommended seven elements as part of its recommended framework for U.S. policymakers.
- Articulate a global vision.
- Work with allies and partners.
- Elevate and lead the digital domain.
- Power the world toward a sustainable future.
- Catalyze private sector financing.
- Build partner capacity.
- Bolster U.S. government expertise and coordination.
Following-up on some of these recommendations as part of a broader discussion on export credit financing, I sat down with my tremendous colleague from the U.S. Treasury Department – Acting Assistant Secretary for International Markets and Development Mitchell Silk – at EXIM yesterday. We talked about the importance of catalyzing private sector capital.
The share of infrastructure commitments with private participation in the developing world that received multilateral and or bilateral support went from 15 percent in 2013 to over 50 percent in 2017.
No doubt this has helped get projects done. We need to continue to work with countries to find the right combination of incentives with the goal of not just building infrastructure but eliminating the need for official sector/public support.
Now, let us focus domestically. As President Trump has said, “It’s time to rebuild our country to bring back our jobs – to restore our dreams” – and, as long as there is a nexus with exporting, EXIM can help.
One of the ways we can help the American people – and assist the President in delivering on his agenda – is through facilitating the expansion of U.S. exports through domestic infrastructure projects.
EXIM has a great deal of past experience in financing infrastructure projects, which have helped improve the lives of millions of people.
These projects have touched all corners of the globe, including Sub-Saharan Africa – which EXIM has a congressional mandate to serve – like the hospital we financed in Ghana, bridges in Zambia, and a water treatment facility in Cameroon.
The hospital in Ghana is the primary hospital in Accra and is among the most advanced medical facilities in West Africa.
The sale of modular steel bridges to Zambia, made with pride in Pennsylvania, not only helped make the country more accessible, but also supported hundreds of American jobs.
And, the potable water treatment project in Cameroon helped alleviate a severe clean water shortage impacting the capital city of Yaounde.
These projects positively impacted millions of people while also supporting thousands of good jobs at home.
But, we can also support projects at home that will foster the expansion of exports – projects like port expansions, railway development, and LNG bunkering.
Projects like these will become increasingly more important, as global competition in terms of trade has never been more intense. As such, I was pleased to sit down with leaders of domestic LNG in my office two weeks ago to discuss the importance of U.S. exports.
To improve American infrastructure, federal, state, and local governments must work together with private industry to improve our airports, seaports and waterways, roads and railways, transit systems, and telecommunications.
President Trump has been crystal clear about his desire to improve American competitiveness through the improvement of our domestic infrastructure – in particular, the President’s recent executive order promotes energy infrastructure and economic growth through the development of new energy infrastructure.
Improving new energy infrastructure will make energy more affordable for Americans while safeguarding the environment and enhancing our Nation’s economic and geopolitical advantages.
The United States is blessed with an abundant supply of energy, and to fully realize this economic potential, the country needs infrastructure capable of safely and efficiently transporting these resources to end users.
The President also said in his National Security Strategy – and it is true – that “Economic security equals national security.”
We must promote free, fair, and reciprocal economic relationships.
Today, we must meet that challenge and provide Americans new opportunities to increase their exports – and the United States must expand trade that is fairer so that U.S. workers and industries have more opportunities to compete for business.
By strengthening the international trading system and incentivizing other countries to embrace market-friendly policies, we can enhance our prosperity.
The United States will incentivize private sector growth – we will expand U.S. trade and investment opportunities and increase the market base for U.S. goods and services.
The President knows that restoring EXIM is important in protecting U.S. strategic interests around the world. It is a tool in the economic and strategic toolbox at a time when global competition has never been more intense.
There are now more than 100 export credit agencies – or ECAs – in operation around the world – a significant increase in recent years.
As many in this room are well aware, ECAs are now being used by many countries as instruments to achieve strategic policy objectives.
They are not just about supporting exports anymore.
Competitor ECAs have been working hard to lure projects home for their companies – and have been picking off parts of the U.S. supply chain, and their associated jobs, through offering export financing.
When this production shifts abroad, American jobs are lost – not only at the larger manufacturers – but also in the hundreds of small businesses that supply parts and components to the bigger guys.
EXIM financing for large U.S. exporters has significant positive effects on the small businesses that are part of the supply chain. For example, in 2015, one large business had 15,000 suppliers – of those, 6,000 were small businesses.
Last year, EXIM approved more than $2 billion of small business authorizations, and more than 90 percent of EXIM’s transactions directly support small businesses.
And, it’s not just small businesses that EXIM helps support, but also minority- and women-owned businesses.
In 2017 and 2018, EXIM authorized nearly $1 billion to support minority- and women-owned businesses. And, over the last 10 years the agency has also supported exports from these businesses to more than 160 countries.
EXIM has a robust and active team of specialists dedicated to helping these businesses export with confidence.
Let us now turn to China. When it comes to export credit financing, China is the most aggressive on this front. China uses export financing to reach its goals of achieving market dominance in high-tech industries currently dominated by the United States.
These Industries include robotics, telecommunications, aircraft, and renewable energy.
The Chinese have supported more exports in the last two years than EXIM has in its entire 85-year existence.
To find evidence of this fundamental shift in the use of export credit, look no further than EXIM’s Competitiveness Report, which was released in June.
The report finds that, over the last 10 to 15 years, China’s export credit system has caused the ECAs of other governments to change the way they do business – or risk their exporters losing access to large swaths of key markets.
Chinese export finance and investment activity has quadrupled from about one-tenth of G7 activity in 2008 to a level equaling the G7 in 2018.
China provided more trade-related support in 2018 than the next three largest countries combined – Italy, Germany, and Korea.
The restoration of EXIM’s board quorum means the agency is available to U.S. industry to work as a counterweight to the actions of China.
That’s the good news.
But, we still have another hurdle to clear this year so that EXIM can continue to help in the President’s effort to put “America First.”
The agency’s charter expires this fall, meaning EXIM needs to be reauthorized.
We know how important it is for this next reauthorization to provide private industry certainty in the marketplace – and the timeline needed for planning the allocation of capital.
I am already engaged with leaders on both sides of the aisle in both the U.S. House and Senate on reauthorizing EXIM – and in making the agency even better by implementing positive reforms to increase transparency and effectiveness.
So there is much work to do – and I am excited for the many great things that are ahead.
I am also so pleased to be here in Toronto today and to continue to foster our global relationships.
Canada is rated number one in the category of least risk for EXIM financial support. Canada and Mexico are the United States’ two top trading export markets, among other great countries that may be present at this forum. I look forward to coming back again and sharing more good news with you in the future.
President Trump wants to see EXIM produce for our businesses – and I am committed to making that a reality.
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.