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NAM Urged President to Address Trade Facilitation with Indian Prime Minister

Last week, NAM President & CEO Jay Timmons was joined by several other trade association leaders in calling on President Obama to prioritize in his meeting with Indian Prime Minister Narendra Modi the importance of India playing a positive role in the global economy, including by addressing concerns about India’s ongoing blockage of a global agreement on trade facilitation. The World Trade Organization (WTO) agreement, agreed to last year in Bali, would simplify customs procedures and facilitate the movement of goods across borders and is estimated to provide a more than $1 trillion stimulus to the world economy once implemented.

In the weeks leading up to a key July 31 deadline, India blocked implementation of the WTO Trade Facilitation Agreement. The agreement set a July 31 deadline for the WTO’s General Council to accept notifications of Category A commitments, adopt the Protocol of Amendment, and open the Protocol for acceptance. Hours before the final deadline, the WTO announced it had not been able to find a solution to the impasse.

In remarks yesterday to the Global Services Summit, WTO Director General Roberto Azevedo said the WTO “is facing a challenge the gravity of which is hard to overstate.” Azevedo said he remained hopeful that WTO members could resolve the differences blocking implementation of the TFA and move on to completing a work program to finish the long-running Doha Round of trade talks, which began in 2001. The umbrella Trade Negotiations Committee is scheduled to meet on October 6.

Earlier this week, The WTO’s Preparatory Committee on Trade Facilitation met to review 32 new notifications from developing countries received since the last meeting informing the WTO of their Category A commitments, demonstrating the strong interest globally in implementing this agreement. Category A commitments are those commitments countries promise to implement immediately when the TFA enters into force.

The NAM remains committed to the objectives outlined in the TFA, and NAM leaders have been vocal about manufacturers’ concerns over India’s recent actions. In a Wall Street Journal Op-Ed on August 11, Timmons wrote that India’s “high-stakes gamble risks hurting economic growth worldwide while calling into question India’s respect for its international commitments. In an Op-Ed for The Hill, NAM Vice President Linda Dempsey noted that India’s recent actions “create new skepticism about whether the Modi government is fully committed to the type of reforms that are critical for India’s own growth and its international competitiveness.”

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Exporters for Ex-Im: There’s More Than Meets the Eye with Large Corporate Ex-Im Bank Users

Behind every large corporate user of the U.S. Export-Import (Ex-Im) Bank—a guarantor of affordable export financing—are hundreds, even thousands, of small business suppliers whose futures are inextricably connected to the bank’s fate.

Click Bond, Inc., in Carson City, Nevada, is a case in point. The company is a developer and manufacturer of fastening hardware and adhesive bonding processes for the aerospace, surface transportation, maritime, and offshore energy markets. Click Bond is the classic “invisible exporter,” a company that supplies parts to large U.S.-based manufacturers, which in turn export a majority of their products with the help of Ex-Im’s financing backing.

The aerospace industry is Click Bond’s oldest and biggest market—the company’s fasteners can be found on the 787 Dreamliner, F-35 Lightning II fighter jet, and even NASA’s Mars Curiosity Rover. Its largest strategic civil aviation customer is Boeing, which depends on Ex-Im to back competitive loans proffered to foreign purchasers of its airplanes.

Boeing is a frequent target of anti-corporate rhetoric from critics who would like to see the bank’s charter expire, but Click Bond Director of Strategic Partnerships Paul McNeill says those critics fail to recognize Ex-Im’s downstream impact on small and mid-size manufacturers that do not contract directly with Ex-Im Bank.

“A significant majority of components found on Boeing aircraft are manufactured by other companies—companies in Boeing’s supply chain,” McNeill says. “When someone sees a Boeing airplane in the sky, that’s not just the work of Boeing. It represents the contributions of thousands of small businesses.”

Without Ex-Im, Boeing would be at a disadvantage to its European rival Airbus, and its suppliers’ competitiveness would also suffer, according to McNeill. “When Boeing thrives, its U.S. suppliers become more competitive by investing in innovation and in processes that improve performance and lower costs. We can’t do that if Boeing isn’t selling airplanes. Boeing is an enormous economic engine that fuels competitiveness at multiple levels in the U.S. manufacturing base.”

Click Bond says that Ex-Im’s closure would jeopardize the jobs of its 400-plus employees, 80 percent of whom directly or indirectly support Boeing’s commercial airplane exports. “It would be a significant blow to our competitiveness,” McNeill states.

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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Exporters for Ex-Im: For This Small Manufacturer, Ex-Im Bank Holds the Keys to a $15 million Project

Jason Speer spent months developing a business deal that was shaping up nicely.

Speer is the president of Quality Float Works, Inc., a manufacturer of metal float balls, valves and assemblies that level liquid controls for a variety of industrial applications. He had reached an agreement with a residential real estate developer in Saudi Arabia to supply shut-off switches for water tanks installed in the new homes of a development outside of Riyadh.

Speer had traveled from Schaumburg, Ill., about 25 miles northwest of Chicago, to Saudi Arabia three times to negotiate the multi-phase deal. He is awaiting a letter of credit from the Saudi real estate developer’s bank to his bank with an accompanying purchase order.

Right now, one obstacle stands in the way. Speer needs a working capital guarantee from the U.S. Export-Import Bank to finance the raw materials required to manufacture the switches. With Ex-Im Bank’s lending authorization set to expire on September 30 if Congress fails to extend its charter, the contract with his Saudi client hangs in the balance.

“Private lenders won’t touch (loans) for the type of materials we need, and it’s very hard for small and medium size businesses to raise capital upfront,” Speer said. “During our planning, never once did we think the Bank would lose its authorization. We might be forced to scramble to try to find other options, without which we won’t be able to fulfill this order.”

If the deal collapses, Quality Float Works stands to lose $15 million in revenue and will hold off hiring the six new employees needed to service the Saudi contract, Speer said. Ex-Im’s predicament is troubling for a small business increasingly dependent on exports. While exports accounted for just 3% of Quality Float Works’ sales in 2001, today they make up 35% of the firm’s sales, with customers in nearly three dozen countries. The number of employees at the company has doubled to 24 in that time.

The pending deal with the Saudi developer is the first instance in which Quality Float Works has applied for an Ex-Im loan guarantee, and it hopes it won’t be the last. Speer, a committed small business advocate who has testified before Congress in support of free trade agreements, says his message to members of Congress is simple: “The Ex-Im Bank can make or break the ability of small and medium size businesses to export, and, by extension, their ability to create jobs and grow the economy.”

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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Exporters for Ex-Im: Bank A “Valuable Tool” For Commercial Cleaning System Exporter

Bob Toews, vice president of Kaivac Inc., says his company is defined by its entrepreneurial spirit. That resourcefulness helped them design a no-touch commercial cleaning system that can clean floors 30 times better than a mop – in a fraction of the time.

Their patented cleaning system has appeal across the globe. It’s used in London Heathrow and Amsterdam Airports, to name a few, as well as the iconic Louvre Museum in Paris. But as is the case for many businesses looking to tap into global demand, Kaivac found the Export-Import Bank to be a valuable asset in making those deals possible.

Kaivac is based in Hamilton, Ohio, and has 50 employees. When the company started to explore potential new markets, Toews said the company networked through friends and family to reach new customers. Their success, however, was limited by the fact that they needed required cash in advance for overseas sales.

The company needed to offer credit terms to grow, but the availability of private sector credit insurance did not, according to Toews, “reach down to their level.” In 2010, Toews started using Ex-Im Bank credit insurance and got five international customers qualified.

“Offering foreigners credit terms was a big benefit. It ratcheted up their interest and ability to buy,” he said

The result has been a significant uptick in overseas sales. Toews said that last year, the company doubled their export sales – about half of which were supported by Ex-Im credit insurance. In fact, the company has just hired another person solely dedicated to selling the cleaning systems internationally.

Toews says Ex-Im is so valuable because it is “a great tool to reach markets that are hard to reach without it.” He is disappointed about the current fight in Congress for reauthorization but is confident the benefits of Ex-Im will shine through.

“At the end of the day,” Toews noted, “what other programs really help small businesses?”

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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Exporters for Ex-Im: ​Brownies, Cakes, And Ex-Im Bank Collide

If you’ve eaten cheesecake, chocolate cake or brownies at a major chain restaurant, there’s a good chance it was made by Love and Quiches Gourmet in Freeport, N.Y.

Susan Axelrod, the company’s chairwoman and founder, started the company in her home kitchen in 1973 and knocked on thousands of doors to get people interested in her quiche and desserts. The company grew from there and now has several hundred employees who help the company sell pastries and a variety of cakes all over the world.

That success, Ms. Axelrod said, is partly attributable to the U.S. Export-Import Bank, a small government agency that could be shut down if Congress doesn’t act by the end of September. Love and Quiches started using the Ex-Im Bank almost 20 years ago and, like thousands of small business around the country, found it crucial to its success.

Love and Quiches relies on the Bank’s credit insurance program. The Bank charges the company a fee for insurance in case a foreign customer fails to pay for the desserts the company ships abroad.

But in the nearly two decades since Ms. Axelrod starting using the Bank, her company hasn’t had to file a claim with the Ex-Im Bank. “We’re very careful who we do business with. We’ve never had a claim – never,” she said.

The Ex-Im Bank named Love and Quiches its 2014 Small Business Exporter of the Year, an award that Ms. Axelrod is proud to discuss.

She said the company doesn’t want the Ex-Im Bank to go away. That, she said, would make it “harder for us to compete with all the other bakery companies in the world that get more support from their government.”

She said other small businesses don’t have the same flexibility as her company and, without Ex-Im Bank, they “would have to walk away from their export business.”

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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Exporters for Ex-Im: Small Business Owner Expands Construction-Equipment Business With Ex-Im Bank

Barry Stoughton developed on his own a product that revolutionized the construction equipment business, but needed the help of the Export-Import Bank of the United States to sell that revolutionary product overseas.

Mr. Stoughton, a former high school math teacher, started Bensenville, Ill.-based BLS Enterprises out of a garage in 1986. The company makes track pads made with polyurethane retreading for construction equipment. Prior to him, companies used rubber, which was less durable.

Most of the 12-employee company’s sales are domestic, but about 14 years ago Mr. Stoughton realized there was an international hunger for his company’s TUFPADS track pads.

We “are always looking for new customers around the world,” he said.

So he turned to the Ex-Im Bank and started with small orders to Taiwan, requiring cash-in-advance payments. But as the company’s orders grew, they needed more flexible financing options – and the Ex-Im Bank stepped in to help.

The Bank provides the company – for a charge, of course – with credit insurance in case their foreign buyers fail to pay.

Because of the Ex-Im Bank, the company has been able to take advantage of opportunities to expand sales to Malaysia, Australia and other countries.

He fears what will happen if Congress doesn’t reauthorize the Ex-Im Bank by September 30, but he’s confident they will support the Bank if they understand what it does.

He said “when people see that small companies are trying to expand and sell American products abroad using Ex-Im, they will support it.”

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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WTO Trade Facilitation Agreement Faces Deadline and Disagreement

U.S Trade Representative Michael Froman is holding out hope that India and a few other countries blocking implementation of the World Trade Organization’s Trade Facilitation Agreement reached last year in Bali will reconsider their position before today’s midnight deadline.

“I certainly encourage the other countries who are currently holding up that agreement –​ it’s a very small number of countries who’ve expressed their willingness to break that consensus – I encourage them to come back to the table and support the consensus,” Ambassador Froman said at a Senate Finance Committee hearing yesterday. In his written testimony, Ambassador Froman noted that the WTO Trade Facilitation Agreement is part of a coordinated trade and development strategy for Africa in particular. The Organisation for Economic Co‑operation and Development (OECD) estimates that full implementation of the Trade Facilitation Agreement would reduce trading costs by more than 14% for developing countries and by more than 15% for lower middle-income countries.

The NAM strongly supports implementation of the Trade Facilitation Agreement, in accordance with the timeline agreed upon in Bali. An important deadline for the first phase of implementation comes today, with the July 31 deadline for the WTO’s General Council to accept notifications of “Category A” commitments, adopt the Protocol of Amendment, and open the Protocol for acceptance. Unfortunately, a meeting of the WTO Preparatory Committee on Trade Facilitation adjourned earlier this month without consensus on a Protocol of Amendment. WTO Director General Roberto Azevedo has scheduled an informal meeting with the heads of all 160 delegations for 9 p.m. in Geneva (3 p.m. in Washington, D.C.). The WTO expects to issue a statement after the meeting.

On July 17, the NAM was joined by eight other trade associations in sending a letter to G20 Trade Ministers in support of the WTO Trade Facilitation Agreement. In the Chairman’s Summary of the G20 Trade Ministers meeting on July 19, Australian Trade Minister Andrew Robb said “We undertook to show leadership in our support for the full implementation of all elements of the Bali outcome agreed at the 9th WTO Ministerial Conference in December 2013, including the Agreement on Trade Facilitation, consistent with the agreed timelines. We agreed this is critical to securing a strong future for the multilateral trading system. We reaffirmed the importance of capacity building to help developing countries implement their commitments.”

Ahead of the G20 Trade Ministers meeting, India’s trade ministry said it would be “difficult” for the country to support the TFA Protocol unless it is satisfied that adequate emphasis is being placed on negotiations about food security. In a statement to Reuters after the G20 meeting, WTO Ambassador Michael Punke said that “India clearly and forcefully expressed its concern that work proceed on all fronts, including food stockpiling, and received assurances that all G20 members are committed to the full implementation of all Bali agreements on the agreed timetables.”

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Tennessee Mat Maker Is Expanding With Help Of Ex-Im

Wearwell Inc. is a small Tennessee company that makes rugged and long-lasting mats used on factory floors around the world.

It’s a second-generation company and has about 100 employees who work nearly around the clock in a 150,000-square-foot facility. The company provides retirement benefits to their employees, offers them health care, and makes WWL-now (1)products stamped with the words “Made in the U.S.A.”

Given this, Chief Executive Steve Goldsmith said he is worried that some lawmakers appear willing to end a program – the U.S. Export-Import Bank – that has helped them grow.

“All these people talk about creating jobs. We’re hiring. We’re expanding. We’re a U.S. manufacturing company,” Mr. Goldsmith said. “The Export-Import Bank is the kind of thing that benefits us. It strikes me as odd, you think we’re the company lawmakers want to help.”

Wearwell is just one of the thousands of companies around the United States that use the Ex-Im Bank to create and support jobs. The Ex-Im Bank has supported 1.2 million jobs over the last five years, and those jobs are at risk if Congress doesn’t reauthorize the Bank by the end of September.

Mr. Goldsmith said the company started using the Ex-Im Bank several years ago. “Coming out of the recession, we were going strong but decided we wanted to diversify” and start going international, he said.

He said their mats can be found on factory floors, including large automotive factories, throughout the United States and Europe. He said the company tried going to private sector lenders first to get help, but private banks wanted to charge them $20,000 or more in premiums for insurance before they even exported anything.

“To start with a $20,000 credit insurance bill before you have any sales is kind of onerous,” he said.

Insurance, Mr. Goldsmith said, is necessary when working overseas, and he asserts the Ex-Im Bank’s pay-as-you-go credit insurance is better.

“I really have no knowledge or ability to collect bills overseas if someone decides not to pay me,” he said. But when the Ex-Im Bank is involved, people know to pay up or they’ll have to deal with the U.S. government.

Mr. Goldsmith said people in foreign countries generally take pride in buying American-made products and U.S. politicians should take note of that.

“This is creating jobs and this is getting U.S. products out there,” he said. “We wouldn’t be able to do that without Ex-Im. There’s a certain prestige around the world to having U.S.-made products.”

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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Exporters for Ex-Im: Milwaukee Business Owner Says ‘Point Blank’ Ex-Im Has Helped Him Create Jobs

Bill Maxon is the second generation of his family to run Maxon Industries Inc., a Milwaukee-based company that has been able to send its concrete-transportation equipment all over the world because of the Export-Import Bank of the United States.

Maxon IndustriesMr. Maxon doesn’t understand the recent dust-up over the Ex-Im Bank. He’s a self-described fiscally conservative Republican but has spent several years working with the small government agency – and he’s seen firsthand how it helps companies grow.

“I can tell you point blank that I have created jobs with the assistance of Ex-Im Bank,” Mr. Maxon said.

Maxon Industries is like thousands of companies—the majority of them small businesses—that have relied on the Ex-Im Bank to grow and keep jobs in the United States. If Congress doesn’t act soon, the Ex-Im Bank’s charter will expire on September 30.

The Ex-Im Bank has supported 1.2 million jobs in the last five years, something Mr. Maxon can speak to.

His 30-person company, he said, wouldn’t be where it is today without Ex-Im Bank.

The company sells large capital equipment to move and place concrete, such as large cement mixing trucks. Their equipment helped transport millions of cubic yards of concrete for the expansion of the Panama Canal and supported power generation plants in countries such as Turkey.

He said he relies on Ex-Im Bank because as a small business his local bank is “scared as hell of doing business overseas.”

The Ex-Im Bank provides export credit insurance, alleviating concerns that a foreign customer may be unable or unwilling to pay for the goods received and enabling commercial lenders to provide necessary financing. In his company’s five years of working with Ex-Im Bank, it has never had to file a claim.

Mr. Maxon is quick to emphasize that his company, and all the others that use the insurance the Ex-Im Bank offers, pay for the service.

He said the competition from foreign companies is fierce, and companies from China – and elsewhere –often get aggressive help from their government. According to a recent NAM report, U.S. Ex-Im Bank is dwarfed by our major trading partners when it comes to export credit assistance.

He doesn’t like to even entertain what would happen if the Ex-Im Bank were reauthorized, but he knows it will hurt his business.

“Ex-Im Bank helps me almost every day,” he said.

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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Exporters for Ex-Im: Maker Of Biodegradable Products Doesn’t Want Ex-Im Bank To Vanish

Leslie Harty and her husband made –and still sell— the country’s first biodegradable coffee bag.

Their company, Maverick Enterprises Inc., has been operating in Monroe, North Carolina, for 21 years. The company specializes in making biodegradable products, including coffee bags and containers for food, to help reduce landfill waste.

Mrs. Harty, the company’s president, said they used the U.S. Export-Import Bank from 2005 to 2010 when they were selling biodegradable bags to companies in Mexico. They ultimately lost one of the contracts but intend to use the Ex-Im Bank again soon because they’re finishing up a biodegradable backing to use in baby diapers.

The potential buyer is in Mexico, and Mrs. Harty said the company will apply for export credit insurance from the Ex-Im Bank once the product is complete.

“I wouldn’t send anything down to Mexico without having the insurance from Ex-Im Bank,” she said. She said she’s heardMaverick Enterprises “horror stories” of small businesses trying to collect payments for products they’ve exported.

She said it would be “disastrous” if the Ex-Im Bank weren’t reauthorized by Congress in September, right when the company is set to begin exporting again. In addition to hurting the company’s sales, it would hurt their ability to conduct research and development.

She said the company is currently designing biodegradable netting for capturing fish and for laying sod as well as small biodegradable coffee cups like those used in Keurig coffee machines.

Those cups, or pods aren’t biodegradable. There’s a potential market for biodegradable coffee pods, and they’d like to capture those sales if possible.

Having the Ex-Im Bank as a resource, she said, will help them do that.

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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