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Remarks on EXIM's Review Process for EXIM's Economic Impact Procedures and Additionality Guidelines

David Fogel

May 21, 2020 –

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DAVID FOGEL
CHIEF OF STAFF
EXPORT-IMORT BANK OF THE UNITED STATES

REMARKS ON EXIM’S REVIEW PROCESS FOR EXIM’S ECONOMIC IMPACT PROCEDURES AND ADDITIONALITY GUIDELINES (VIRTUAL AND OPEN EXIM BOARD MEETING)

WASHINGTON, DC

MAY 21, 2020

Remarks as Delivered

Thank you, Chairman, I appreciate it. Let me begin by acknowledging your leadership on these two critically important issues—economic impact and additionality. The easy thing to do would have been just to maintain the status quo, but you took on both issues from the outset. And ever since, you have repeatedly talked about how it is a "new day at EXIM," and how we need to reexamine the way we conduct business.

Specifically, you've called on us to, first and foremost, pursue the Bank's mission, support U.S. jobs by facilitating exports. But to do so in a way that's transparent and protects the American taxpayer. On that note, as part of your efforts to reform EXIM, you called for a public comment process to evaluate these two fundamental EXIM policies.

The preparation for this process began last summer, culminating in the launch of a public comment process on September 9, 2019. Although we received a number of letters during the one-month comment period, you directed us to extend the period in order to give the opportunity to more stakeholders to comment.

In the end, the comments we received were exactly split, which is emblematic of the disparate views on both economic impact and additionality. Half the letters supported more stringent procedures, and the other half favored loosening the restrictions or maintenance of the status quo. After synthesizing the public comments and some initial comments from our interagency partners, we held two rather lengthy discussions at our advisory committee meetings this past October and January.

In an example of your commitment to hearing from all sides, you invited one of the leading critics of EXIM to present at both of these meetings. Although timing constraints did not allow for extensive comment from Advisory Committee members, one theme that emerged was that EXIM should not adopt additional requirements or red tape that would further complicate or delay the processing of transactions, given that this is already a chief complaint heard from exporters.

EXIM engaged a third-party consultant to review the public comments and the record from

the two advisory committee meetings. And to produce a report synthesized in this information. That report was delivered to EXIM in February. EXIM then sent its proposed recommendations for reforming and modernizing its economic impact and additionality procedures to the interagency for a second round of review. This resulted in a list of comments and suggestions, some of which were adopted, some of which were modified, and some of which were rejected with explanation.

Recently in the days leading up to this meeting, some of our interagency partners reiterated their concerns about the comments that we had not accepted. And EXIM worked through many of these comments to develop a final set of proposals that more generally reflected the interagency views.

I want to thank our interagency partners for working through the sometimes difficult issues with us, and I am glad we reached a reasonable conclusion, even if some disagreements still remain. Differences of opinion are not surprising given the controversial nature of the topics we are discussing today.

But you, Chairman, have set a guidepost of balancing these differences to arrive at meaningful reform without compromising EXIM's ability to meet its critical mission. All the more critical right now to respond to the demands brought on by COVID-19, and also the economic security threat posed by China in particular.

The net result of this exhaustive and thorough process is a set of recommended reforms that the staff believes meet your goal of enhancing transparency and accountability to both our economic impact and additionality policies and procedures.

Again, enhancing transparency and accountability as you directed. With that, I would like to turn it over to my colleague Jim Cruse.