Let’s face it, companies competing in global markets often depend on their governments for export-related financing and support. With every nation trying to win jobs and promote exports for companies in their own countries, the Export-Import Bank of the United States does the same: it provides the financial scaffolding to support American business interests worldwide.

“Every nation is in a race to create jobs through increased exports” said Ex-Im Bank Chairman Fred Hochberg in a recent Op-Ed for The Hill. “Fifty-nine other export credit agencies around the world are trying to increase their countries’ share of the global market. That makes for a brutally competitive landscape.”

The Ex-Im Bank is the official export credit agency of the United States. Its mission is to ensure that U.S. companies — large and small — have access to the financing they need to turn export opportunities into sales.

As the U.S. federal government’s export credit agency, the Ex-Im Bank provides export credit insurance, loan guarantees to lenders, direct loans to exporters on market-based credit terms, and loans to foreign buyers

Despite the fact that every American president since Eisenhower has supported the bank’s mission, reauthorization of the Ex-Im Bank has become a political football on Capitol Hill. The bank got a short-term reprieve last year, but the battle is back in full force ahead of the current charter’s expiration in June.

“American companies need to be able to compete on a level playing field with competitors who are getting this kind of service from export credit agencies in their own countries,” says Caroline Freund, a senior fellow at the Peterson Institute for International Economics, and a member of the Ex-Im Bank Advisory Committee.

American companies need to compete on a level playing field with competitors who are getting this kind of service in their countries.

Moreover, Freund disagrees with the argument that Ex-Im Bank loans are a form of corporate welfare. “Opponents argue that it’s a subsidy because the public sector is giving loans to businesses that might otherwise get them from the private sector… But the bank is not taking any taxpayer money.”

The Ex-Im Bank’s mission it fill export financing gaps in the marketplace through its loan, guarantee and insurance programs — when the private sector is unable or unwilling to step up. At the same time, private sector lenders are Ex-Im Bank's partners. In fact, 98 percent of Ex-Im Bank's transactions in 2013 involved commercial financial institutions during.

By financing the export of American goods and services, the bank claims it has supported 1.2 million private-sector American jobs since 2009.

Ex-Im supporters also argue that the bank has financed more small business exports in the past five years than in the previous 11 years combined. In 2013, nearly 90 percent of Ex-Im Bank's 3,413 transactions were for small businesses. Moreover, during that same time period, the bank claims it generated $2 billion more than the cost of its operations.

In The Spotlight

President Obama supports reauthorization as does a broad, bipartisan coalition that includes the U.S. Chamber of Commerce and the National Association of Manufacturers. In fact, every American president since Eisenhower has supported the bank’s mandate.

In 1963, President John F. Kennedy said: “The Export-Import Bank has created a wholly new program of export financing which now provides U.S. business with credit facilities equal to any in the world."

Twenty-one years later, President Ronald Reagan observed that "exports create and sustain jobs for millions of American workers and contribute to the growth and strength of the United States economy. The Export-Import Bank contributes in a significant way to our nation's export sales."

During its 80-year history, the Ex-Im Bank has been reauthorized 16 times, all with broad bipartisan majorities, and often with just a voice vote or unanimous consent.

“It is hard to understand why anybody would oppose an institution that actually turns money over to the Treasury,” says Freund. “Export jobs also pay higher wages and offer higher benefits. These are the good jobs that American workers are looking for.”


Greg Sandler
About The Author Greg Sandler
Greg Sandler is the president of ThinkGlobal Inc., a new media, content development, and video production company. An expert in B2B marketing and international business, Greg consults with a wide range of organizations, government agencies and private sector partners.


You don't have permission to view or post comments.

Quick Search

FREE Impact Analysis

Get an inside perspective and stay on top of the most important issues in today's Global Economic Arena. Subscribe to The Manzella Report's FREE Impact Analysis Newsletter today!