Over the last days and weeks, critics of the Export Import Bank (Ex-Im) have talked about lots of issues and attempted to smear lots of mud. Yet, they continue to ignore the crux of the Ex-Im issue: American jobs and American manufacturing competitiveness.
While critics may enjoy debates inside isolated ivory towers, our nation’s manufacturers have no such luxury. Manufacturers big and small, in communities across the country, face a highly competitive global economy every single day. Every sale made can mean jobs that are saved or new jobs are created. When they lose out to foreign competitors for sales, our nation’s manufacturers are faced with tough choices as they struggle to make payroll and keep their business on track.
Critics of Ex-Im’s reauthorization seem to ignore a basic fact of the global economy when complaining about sales of airplanes to foreign airlines or sales of capital equipment to foreign mining projects. The fact is that other countries are building up their infrastructure and striving to meet growing domestic demand for energy, transportation, water, crops and telecommunications. These projects are moving forward regardless of what the U.S. Congress does or doesn’t do on Ex-Im Bank reauthorization. The issue that Ex-Im reauthorization presents is whether those foreign projects will use products made in the United States by American workers or whether those sales will go to our competitors in Asia, Europe or elsewhere.
Outside the United States, at least 59 foreign export credit agencies (ECA) are working intensively to give our foreign competitors a leg up in sales in fast-growing overseas markets. Those ECAs do not hesitate to support all types of projects, with far less rigor than Ex-Im already places on the sales for which it provides financing, insurance, loan guarantees and other services.
The United States has led efforts to impose important disciplines on ECAs, particularly those for member countries of the Organization for Economic Cooperation and Development (OECD). In 2011, the United States negotiated a new Aircraft Sector Understanding to bring official ECA financing rates more in line with commercial rates, taking away incentives for credit-worthy airlines to use ECA financing. That new agreement went into effect in 2013, and we’ve seen the commercial markets respond by picking up more financing for aircraft. But U.S. leverage has waned as critics seek to have the United States unilaterally disarm its own Ex-Im activities.
While the critics focus on a few large companies that use Ex-Im services (which not only support jobs in their own companies but also in thousands of small and medium-sized companies throughout their supply chains), they ignore the nearly 90 percent of Ex-Im transactions in FY2013 – some 3,413 transactions – that directly supported small businesses. As the NAM’s new Exporters for Ex-Im blog post series will highlight in the days and weeks to come, small and medium-sized businesses make up the lion’s share of Ex-Im’s activities. Ex-Im’s support of dynamic small business exporters like Wallquest has helped small businesses enter and expand export sales – thereby growing not only their manufacturing production, but the number of their employees.
At a time when the global economy is starting to show some growth, and we know our global competitors are seeking to win every sale, the question for lawmakers voting on Ex-Im reauthorization this year is actually quite simple: Do you want foreign purchasers to buy products manufactured in the United States with U.S. workers? If so, support Ex-Im reauthorization. Manufacturers do.