It’s very disappointing that the Senate could not find the will to attach a reauthorization of the Export-Import Bank of the United States (“Exim”) to the only “must pass” piece of legislation in July. Now, Exim will not be in a position to help American companies with new projects until September or October at the earliest. And the longer we go without an Export Credit Agency, the bleaker the outlook.

I recently met with several representatives of the Virginia Congressional delegation to voice my support of Exim reauthorization. I was absolutely shocked to hear from one Congressional aide that their office had been hearing on a 9:1 basis from constituents opposed to renewing Exim’s charter. But I was mostly shocked because I don’t think that many people, even the most well educated, understand what Exim is, how it operates and how it supports American businesses.

Exim has become a political pawn that somehow represents big government and corporate welfare. Neither characterization could be farther from the truth.

Exim is a very small government agency that charges fees to American companies that need a government guaranteed loan to bid or sell its projects abroad. It’s self-sustaining, and even returns hundreds of millions of dollars to the Treasury each year.

A vote for Exim reauthorization is not a vote for big government. It’s a vote for American jobs and competitiveness.

It supports only 2 percent of U.S. exports annually — the majority of U.S. exports are sold through fully commercial channels, which is the way it should be. Exim fulfills its mission as a lender of last resort. Yet, Exim supported $27.5 billion in exports last year. And what happens to those sales without an export credit agency (ECA) like Exim?

The sales will simply go to manufacturers from other countries that have a functioning ECA. Or worse, American companies will manufacture the products abroad in countries with functioning ECAs, moving the jobs and tax revenues to those countries.

If lawmakers want to reduce the size of government, why choose to disband an agency that is making money and protecting American jobs?

Nothing about Exim programs can be considered “corporate welfare” or handouts to big businesses. To get an Exim loan guarantee, the exporter must complete a lengthy application process and then pay very high (above market rate) exposure fee rates — plus high commitment and arrangement fees to the commercial bank that is actually making the loan.

In The Spotlight

If businesses did not have to utilize Exim Bank programs, they most certainly would not. The fact is: in order to compete for certain projects, the exporter must come to the table with financing which simply is not commercially available to many buyers abroad, especially in the developing world.

Many people also do not appreciate that in addition to loan guarantees, Exim supports thousands of small businesses with working capital lines of credit. Without this, many small firms would lack the liquidity to bid on and win contracts overseas.

Many lawmakers opposed to Exim Bank are simply spouting rhetoric provided by inside-the-beltway think tanks and other organizations that have no firsthand experience with Exim and have not considered how eliminating the bank will impact American competitiveness, small business and jobs.

A vote for Exim reauthorization is not a vote for big government. It’s a vote for American jobs and competitiveness. Let’s hope that Congress returns from its August recess with a renewed commitment to doing the right thing for America.


Judy Zakreski
About The Author Judy Zakreski
Judy Zakreski is the President & CEO of China Trade Strategies, a business consultancy focused on bridging the cultural gap for Western medical device manufacturers entering or adjusting their approaches in the China market, and Chinese healthcare product companies navigating the U.S. market.

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