Recently a federal judge ruled against an airline industry trade association in a case that questioned federal loan guarantees that help foreign companies purchase U.S.-made airplanes.
The Air Transport Association of America (ATA) sued the U.S. Export-Import Bank last year over loan guarantees to Air India, contending that the loan guarantees were harmful to domestic carriers in the competition for airline routes. Earlier this year, U.S. District Judge James Boasberg declined to issue an injunction against the Bank.
In July, the District Court determined that the Bank “acted neither arbitrarily and capriciously nor contrary to its governing statute when it approved the 2011 Commitments to Air India.”
ATA argued that export financing for U.S.-manufactured airplanes harms domestic carriers. The suit also alleged the Bank failed to fully assess the potential adverse effect of the loans. The judge found, though, that “there remain significant external checks on such hypothetical transactions: Congress not only has a recurring opportunity to decline to reauthorize the Bank, but it also gets the chance to review new commitments of more than $100 million before they take effect.”
In May, President Obama signed Export-Import Bank reauthorization legislation into law. The legislation reauthorized Ex-Im Bank through FY2014 and increased its lending cap to $140 billion. As NAM President Jay Timmons wrote in an Op-Ed earlier this year, the Ex-Im Bank in FY2011 “helped nearly 4,000 businesses in the U.S. export more than $41 billion worth of goods. Those exports support 290,000 jobs in this country, many of them at small and medium-sized businesses.”
Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.