EXIM One Year Later
By: Fred P. Hochberg, Chairman and President, Export-Import Bank
On July 1, American exporters and their employees marked an anniversary, and it wasn’t a celebratory one.
It has been one year since the charter of the Export-Import Bank of the United States (EXIM) was allowed to lapse for the first time in its 82-year existence. It was also the first time since the Great Depression that exporters small and large—and their workers—lost the backing of the full faith and credit of the United States Government to protect their overseas sales and their jobs.
In the first nine months of this year, EXIM has authorized just more than $4 billion in financing for U.S. exports that have supported just over 37,000 jobs. By comparison, at this point last year, EXIM had authorized more than $12 billion in financing for exports that supported more than 100,000 American jobs. Both last year and this year, a majority of EXIM transactions have directly benefitted American small businesses.
The bottom line is that EXIM needs a quorum on its Board of Directors in order to continue to support high-paying American jobs at businesses small and large throughout our country.
EXIM is a critical tool in the bipartisan economic agenda that supports U.S. businesses and their workers succeed in global markets and grow their exports. For small businesses, EXIM offers vital export credit insurance and working capital loan guarantees so American entrepreneurs can sleep knowing they’ll get paid on their exports and scale their business to increase exports. For larger companies, EXIM offers backstop financing so power generators, heavy equipment, nuclear reactors, and airplanes—America’s strongest exports—can be exported successfully.
Without EXIM financing, America risks losing jobs to other countries with strong export credit agencies. On June 30, EXIM released its annual report to Congress on American Competitiveness. It found three important numbers:
- 85: There are 85 and counting export credit agencies like EXIM in 67 countries around the world.
- 70: 70 percent of medium- and long-term export credit financing fell outside international rules for competition.
- 50: Just three countries—China, Japan, and Korea—accounted for more than 50 percent of all official export credit financing globally.
These numbers demonstrate that export credit agencies like EXIM are only becoming more important around the world. It makes sense: with global economic growth slowing and uncertainty in the air, governments and businesses alike are looking for new ways to create jobs. Export credit agencies like EXIM are a necessary tool to increase exports—and at a profit. It’s an attractive option, and more and more countries are exercising it. The United States simply can’t afford to leave businesses and their employees out in the cold without this necessary tool to enable them to export and compete.
Yet, while EXIM has been reauthorized for more than seven months, our county is still competing with one hand tied behind our back. Why? Because the Bank lacks a quorum on its Board of Directors, and is therefore unable to provide medium- and long-term financing in excess of $10 million. This directly impacts American workers and America’s global competitiveness. Already, we are seeing companies moving high-paying American jobs overseas in order to qualify for export support from our competitors.
Businesses of every shape and size are feeling the squeeze. Since 2009, more than 40 percent of companies that benefitted from Board-approved transactions have been small businesses. Today, EXIM has more than 30 board-level transactions in our pipeline, valued at more than $20 billion—which equals tens of thousands of American jobs.
The pain can be felt throughout our country. In Waukesha, Wisconsin, GE announced last fall, it would no longer manufacture gas engines, moving 350 jobs to a new plant in Welland, Ontario, Canada.
At ISCO Industries, an employee-owned family business in Louisville, Kentucky, workers and company leadership alike are stalled on an $80 million transaction, supporting hundreds of jobs. The export would bring fresh drinking water to nearly 20 villages in Cameroon. Businesses like ISCO need a quorum on EXIM’s Board so they can compete and grow in communities across our country.
The future of EXIM Bank is built on the same foundation as its successful past: American jobs.
Since 2009, EXIM has supported more than 1.4 million American jobs through exports totaling more than $235 billion. Our success has spurred our international competitors to vigorously support their exporters.
Now is the time to make American exporters more competitive, not less. It’s a safe bet to make—it’s paid off for more than 80 years.
Fred P. Hochberg is Chairman and President of the Export-Import Bank of the United States.