FOR IMMEDIATE RELEASE April 4, 2001
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Good Afternoon ladies and gentleman and thank you for inviting me here to join you today. I represent Michigan's 11th Congressional District in the United States House of Representatives. This district consists of several communities in the northwest suburbs of metropolitan Detroit and is home to one of the moat vibrant, politically active, and ethnically diverse communities in the nation.
I am pleased to be with you this afternoon to discuss some issues of importance to us all.
As you may know, I have been a member of the House Appropriations Committee since 1995. I am pleased to say this year is the first year I have had the honor to serve as one of the thirteen Appropriations Subcommittee Chairmen, or Cardinals as people often say on Capitol Hill. My Subcommittee is the District of Columbia. I've greatly enjoyed the experience so far this year and Ilook forward to working hard on the appropriations process to pass the DC bill, and all the appropriations bills, in a timely manner.
Since 1995 I've also been a member of the Appropriations Subcommittee on Foreign Operations and Export Financing, which has responsibility for funding and overseeing the Export-Import Bank. So I've been involved with Ex-Im for a number of years.
Role and Importance of Ex-Im
The Export-Import Bank has a vital role to play in support of American exports, and the businesses and workers who supply and sell those goods and services. As the chief U.S. government agency that helps finance American exports, Ex-Im operates with a budget of nearly $1 billion, of which the Bank finances around 2% of U.S. exports a year.
Over the past five years, Ex-Im Bank has supported 141 companies in 76 different communities in my home state of Michigan, enabling over $486 million exports to be sold overseas, and sustaining an estimated 7,050 jobs. Seventy percent of these transactions were with small businesses in Michigan.,
In my own district, Ex-Im Bank supported $81,770,753 worth of exports since fiscal year 1996. Thirteen of the seventeen businesses supported are small businesses.
Overall, on a nationwide scale, Ex-Im Bank financing helped more than 2,500 U.S. export sales in fiscal year 2000, supporting $15.5 billion of U.S. exports to markets worldwide. Eighty-six percent of these transactions were with small businesses.
The basic premise for Bank financing is that it is a supplement to, and not a replacement for, private sector financing. These are exports that most likely would not have gone forward because of lack of financing. As a result, the companies that receive these orders would have found it necessary to find other orders for their employees to work on or reduce employment.
Ex-Im also helps to somewhat level the playing field for American businesses. Many of foreign governments engage in export finance. These governments sometimes provide financing at below-market rates in order to reduce the end cost of an export and thereby win international contracts by under-pricing any foreign competitors. In such situations, the need for Ex-Im Bank could not ring louder as it may be able to match the foreign government's interest rates to ensure U.S. companies remain competitive.
In newly emerging markets and riskier areas, private banks may not yet be willing to take the risk of providing a loan because it may not be profitable for them to take the risk. However, Ex-Im Bank can provide the private bank a loan guarantee, which eliminates substantially the private bank's risk on the portion guaranteed by Ex-Im Bank.
Keeping U.S. companies competitive with foreign companies, I congratulate Ex-Im Bank in its mission of helping American exporters understand and obtain the necessary financing to promote American exports and preserve American jobs.
In summation, the Ex-Im bank is good for Michigan, good for America and good for the International Community.
Ex-Im in the 107th Congress
We, in the US Congress will be considering the reauthorization of the Ex-Im Bank, prior to September 30, 2001 when its authority expires. I personally look forward to supporting that effort in the House as we work to pass the authorization bill this year.
As we do every year, Congress will also be considering appropriations for Ex-Im. As a member of the Foreign Operations Subcommittee, I will be particularly interested in this funding.
The Appropriations process will be different this year than it has been over the last several years. In the past, Congress had to consistently increase funding at the end of the process in order to get the President's signature. This year, with Republicans in control of the House, Senate, and the Administration, the dynamic will be completely different.
This year there is increased pressure to keep discretionary spending limited and focused, and rightfully so. It's important to establish budget discipline in order to prevent excessive spending which undermines our economy.
We will all be anxious to see how this new dynamic plays out, particularly in the case of Ex-Im.
As you know, President Bush's budget outline proposes reducing the subsidy cost of the Ex-Im Bank's program to $649 million, or 25% below the amount appropriated in FY2000.
This is a significant cut, and I share the concern of many Members of Congress of how this will affect U.S. exports and jobs.
But this is still early in the budget process. There are many steps still to come, and we have still not seen the details of the President's budget. We all look forward to seeing those details when he submits them to Congress later this month.
However, one thing is certain. Ex-Im will not be immune to the budget pressures the federal Government is facing this year. We will have to face the fact that Ex-Im will likely have to work with less money in the next fiscal year.
I'd like to focus for a moment on the trade agenda for this year. This is an area where we simply must start making progress.
In order to understand the importance of making significant progress on free trade, we must have a clear picture of where we stand in the world today in terms of reducing the barriers to trade.
Quite simply, the U.S. is falling far behind.
There are approximately 130 free trade agreements in force globally today. The European Union has free trade agreements with 27 countries, and 20 of those agreements were signed after 1990. What is shocking, however, is that out of all the agreements in the world, the United States has only two in force: one is with Canada and Mexico (NAFTA) and the other with Israel.
When it comes to trade agreements, the United States has remained in a deadlock for several years while the rest of the world has been moving forward. This has put the United States at a disadvantage in our effort to increase exports, and therefore increase the number of businesses and jobs for Americans.
Those of us in Congress who support the elimination of tariffs and trade barriers are hopeful we can get some hard work done this year to begin the process of catching up.
When it comes to trade, the big issue Congress must address this year is Trade Promotion Authority. This is absolutely essential to the trade agenda. Without it, we will not be able to make the progress we need to make. The lack of Trade Promotion Authority breeds concerns among our trading partners about our ability to successfully conclude trade pacts. Congress must pass TPA this year and I hope you will join us in the effort by helping to build grassroots support for this critical piece of the trade agenda.
There are other important trade issues on the agenda for this year. Unfortunately, since China has not yet entered the WTO, Congress will have to pass another extension of NTR for China. In addition, the agenda includes the Jordan free trade agreement, the bilateral trade agreement with Vietnam, reauthorization of the Andean Trade Preferences, the Generalized System of Preferences, and of course negotiations over the establishment of the Free Trade Area of the Americas.
In addition to these important items, I am hopeful the United States will conclude negotiations for a free trade agreement with our ally Singapore.
Positioned strategically amid vital shipping lanes, Singapore is one of the United States' closest, most strategically important friends in Southeast Asia. Singapore is the tenth largest export market for the United States. Literally thousands of Americans depend on exports to Singapore for their jobs.
Singapore's importance is not just in business, but also on vital national security issues. The US Western Pacific Logistics Command is based in Singapore, and Singapore and the US conduct both joint air and joint naval exercises. Most recently, Singapore has undertaken to build a deep-water pier and naval base, entirely at their own expense, and offered its services to U.S. aircraft carriers.
Last year I introduced legislation to authorize negotiations for a free trade agreement with Singapore, and our countries made significant progress toward the completion of an agreement. I am hopeful we will conclude those negotiations in the near future.
In conclusion, I'd like to once again thank you for inviting me to be here today. More importantly, thank you for all of the work you do to sustain our exports and our economy, and provide jobs to Americans across the country. As we work together to find ways to increase our exports and strengthen our economy, I am hopeful we will be able to make significant progress this year.