In the face of tough competition overseas, the Export-Import Bank (Ex-Im) is a critical tool the U.S. government has to boost U.S. exports and grow manufacturing jobs.
Opponents continue to paint Ex-Im Bank as a costly and unnecessary entity focused solely on providing credit to our nation’s largest exports. That is simply false.
Ex-Im Bank helps U.S. companies, many of them small and medium-sized manufacturers, offset some of the financing support that their foreign competitors receive from their governments. The Bank also helps U.S. companies to secure new customers and increase market share in emerging markets.
In FY2013, nearly 90 percent of Ex-Im Bank’s transactions directly supported small business — providing $5.2 billion in direct support for small business exporters. Small businesses like BTE Technologies in Maryland and Polyguard Products in Texas rely on Ex-Im export financing and insurance to grow their exports and add U.S. jobs. Lion Precision in Minnesota turned to Ex-Im Bank’s single buyer insurance program to bolster exports to countries like China and Japan. A small company with 35 employees, Lion Precision designs, manufactures, tests and ships high-tech sensors. Last year, more than 60 percent of the company’s sales were outside the United States.
Simply put, our foreign competitors use every tool available to aggressively pursue greater market share by offering enticing financing terms. The playing field needs to be level, and Ex-Im Bank is crucial in achieving that. At least 59 other foreign export credit agencies provide significant support to our competitors around the world. And in some cases, foreign customers insist on official export credit agency support for projects.
In the aerospace sector, Ex-Im has helped ensure that the U.S. industry remains competitive, enabling the aerospace sector to produce a positive trade balance of trade of $73.5 billion in 2013. These exports support U.S. jobs at large companies and small, both directly and indirectly. As Ex-Im Bank Chairman Fred Hochberg noted earlier this week, aerospace is the top U.S. export after agriculture. Given the high value and high volume of sales, general aviation and commercial aircraft can — in some years — make up a large portion of Ex-Im Bank’s portfolio.
In the last five years (FY09 to FY13), Ex-Im Bank assisted in financing more than $188 billion of U.S. exports and supported 1.2 million American jobs – in a public-private partnership that actually generates revenue for the taxpayer. The Ex-Im Bank is a self-sustaining agency, generating more than $1 billion for the U.S. Treasury last year — after covering its own operating costs.
In September, the Bank’s charter will expire. Congress should act now to reauthorize Ex-Im Bank. Otherwise, U.S. manufacturers small and large will increasingly find themselves locked out of the competition in global markets, an outcome that would be bad for the economy and for jobs.