Tag: Ex-Im Bank

Manufacturers Welcome President’s Comments on TPA and Market-opening Trade Agreements

Manufacturers welcome the President’s commitment to seek passage of Trade Promotion Authority and move forward on market-opening trade agreements in the Asia Pacific and with Europe.

For manufacturers, opening new markets overseas is critical. The NAM is working on both sides of Capitol Hill with both Democrats and Republicans to advance a robust trade agenda that will tear down barriers for U.S.-manufactured exports. For too many years, the United States has sat on the sidelines as other countries negotiated trade deals that put our manufacturers at an increasing competitive disadvantage.

We look forward to working with the administration on passage of the Bipartisan Congressional Trade Priorities Act, introduced earlier this month by Ways and Means Chairman Camp, Finance Chairman Baucus and Ranking Member Hatch, which sets forth strong negotiating objectives and the much-needed framework to put the United States in a strong negotiating position for market-opening trade agreements.

The NAM will continue to make the case for robust trade policies and agreements here in Washington and around the country, emphasizing the importance of the elimination of unfair barriers overseas and strong rules on intellectual property, investment, fair competition and other commercial outcomes in new agreements.

Manufacturers also need access to competitive export financing to take advantage of new market opportunities, and the NAM will continue to advocate for a strong U.S. Export-Import Bank that can back exporters when needed. Ex-Im Bank is the only tool American manufacturers have to counter the approximately $1 trillion in export financing that other governments provide their exporters, and Ex-Im Bank helps to level the playing field for exporters to compete on the basis of quality and price rather than on financing terms. The NAM is also working to enhance the competitiveness of manufacturers in the United States through global and national initiatives to cut cross-border transaction costs and address regulatory hurdles abroad.

 

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Ex-Im Bank Policy Change Included in Omnibus Spending Bill

Last night, the Senate passed an omnibus spending bill that provides appropriations for the federal government through September 30. The FY2014 appropriations bill, passed by the House earlier this week and headed to the President for signature, also included a policy rider that will temporarily stop the U.S. Export-Import Bank and the Overseas Private Investment Corporation (OPIC) from preemptively denying support for exports of U.S. goods to most new coal-fired power plants abroad.

The provision – outlined on page 1385-87 of the legislation– states that none of the funds appropriated or otherwise made available may be obligated or expended to provide (until September 30, 2014) for the enforcement of any rule, regulation, policy, or guidelines implemented pursuant to the Supplemental Guidelines for High Carbon Intensity Projects approved by Ex-Im Bank on December 12, 2013. The bill also bars the enforcement of the modification proposed by the Overseas Private Investment Corporation (OPIC) in November 2013 to OPIC’s Environmental and Social Policy Statement relating to coal. The NAM had previously argued against Ex-Im Bank’s new guidelines, since they run contrary to the Bank’s principle mandate to support U.S. jobs through exports. Manufacturers applaud House Appropriations Committee Chairman Hal Rogers (R-KY) for tackling this issue in this important legislation.

The revisions to Ex-Im Bank’s Environmental Procedures & Guidelines, as approved by the Ex-Im Bank Board of Directors in December, would substantially deter Ex-Im support for new coal-fired power plants abroad. Although those rules provide some flexibility with respect to the poorest countries in the world, the new guidelines required carbon capture and sequestration (CCS) technology to secure Ex-Im financing for coal-fired power plants in most countries – a technology that manufacturers of CCS systems have repeatedly said is not yet ready. The changes were intended to align Ex-Im Bank’s procedures with the President’s Carbon Action Plan, announced in June. The NAM submitted comments to Ex-Im in November, in response to the first draft of proposed changes to Ex-Im Bank’s environmental guidelines.

Ex-Im Bank’s underlying carbon policy, and the updated supplemental environmental guidelines enacted last summer by a unanimous Board vote, will remain in effect. While the OECD has recommendations for common approaches on environmental and social due diligence for export credit agencies, there is not yet any international or domestic consensus on how best to address the challenges associated with climate change. Meanwhile, demand for coal and other energy sources continues to rise around the world as countries develop and millions of people are lifted out of poverty and begin to seek industrial and economic gains. Examples abound of official export credit agency (ECA) support for energy and infrastructure projects that ensure steady energy supplies to countries with these growing demands. New coal-fired power plants are also in the works in many developed countries – Japan, the Netherlands, Germany, Italy and the UK. The carbon guidelines that remain in place at Ex-Im Bank encourage and permit the Board to take into account the environmental effects of goods and services for which support is requested, without categorically barring support for U.S. exports to foreign coal-fired power plants.

Manufacturers continue to strongly support Ex-Im Bank and its mission to support U.S. exports. Ex-Im authorized more than $27 billion in support of about $37 billion of U.S. exports in FY2013, supporting approximately 205,000 American jobs in communities across the country. Nearly 90% of Ex-Im Bank’s transactions were with small businesses. In the last five years, Ex-Im Bank has assisted in financing more than $188 billion of U.S. exports and supported 1.2 million American jobs – and last year, the Bank generated $1 billion in revenue for the Treasury Department. Ex-Im Bank helps level the global playing field and plays a vital role in ensuring manufacturers have access to competitive export financing. Read more about the importance of Ex-Im Bank to manufacturers at www.nam.org/ExIm.

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Ex-Im Bank Generates $1 Billion in Profits

Earlier this week, the U.S. Ex-Im Bank announced that it was transferring more than $1 billion to the U.S. Treasury’s General Fund for FY2013. The Bank transferred the revenue – primarily generated from the fees from its customers for loan guarantees, export credit insurance and other services – after covering its own operating costs and contributing to loan loss reserves. In 2012, Ex-Im Bank’s authorizations supported about $50 billion in U.S. export sales and approximately 255,000 American jobs. The Bank has been consistently profitable since 1992, returning billions of dollars in profits to taxpayers over the years and contributing to federal deficit reduction.

The ability of U.S. companies to export has always been a critical issue for the NAM, and exports are increasingly important to the U.S. economy and to the success of domestic manufacturing. Ex-Im Bank as one of the most important tools the U.S. government has to help grow U.S. exports and jobs, and the only tool that American manufacturers have to counter the approximately $1 trillion in export financing that other governments provide their exporters.

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Ex-Im Report Grades Competitiveness, Identifies Challenges for U.S. Exporters

Earlier today, Ex-Im Bank Chairman Fred Hochberg outlined the unprecedented challenges facing U.S. exporters and released the annual competitiveness report that stacks Ex-Im Bank up against other major export credit agencies (ECAs) around the world.

Chairman Hochberg said, in his remarks, “American products are the best in the world.  And on a level playing field, they often come out on top. But today more than ever, foreign governments are willing to do whatever it takes to close a sale – putting massive resources behind their chosen exporters, which are often state-owned enterprises.”  U.S. exporters often face head-to-head competition with competitors backed by foreign governments that offer attractive financing terms, sometimes tipping the scale for their own domestic manufacturers.

Chairman Hochberg also identified opportunities for U.S. exporters in diverse areas, from nuclear power to broader infrastructure demands, citing huge projected growth in the global middle class over the next two decades. This growth, he said, will create “massive new markets, new opportunities and, most important, a lot of jobs.” That middle class will likely demand unprecedented amounts of infrastructure – from power and water projects to airports.

While opportunities are growing overseas, exporters from the United States continue to face challenges. The Ex-Im Bank’s 2012 Competitiveness Report found that commercial bank capacity has declined since the global financial crisis, making ECAs an increasingly important tool.  Many Asian countries have ambitious export plans to gain market share, and the report finds China, Korea, Japan and others are ramping up government export support.

The members of the Bank’s 2013 Advisory Committee, including former NAM Chairman and Vermeer CEO Mary Andringa, commended the Bank for its continued success in filling commercial financing gaps in support of U.S. exports. The Advisory Committee also noted that certain public policy issues – unique domestic content requirements, extensive economic impact studies and MARAD shipping requirements – continue to be a concern.  The NAM has urged the Bank to address these policy issues, and is looking closely at both existing and newer U.S. policies that constrain the ability of manufacturers in the United States from utilizing Ex-Im financing to level the playing field internationally.

As the official export credit agency of the United States, Ex-Im Bank helps to fill the gaps in private export financing. In the past five years, Ex-Im was able to pay its own costs and return nearly $1.6 billion to the U.S. Treasury. In FY 2012, Ex-Im Bank approved nearly $35.8 billion in total authorizations that supported more than $50 billion in U.S. export sales and about 255,000 American jobs. The Bank provided more than than $6 billion directly in support of small-business export sales, setting an Ex-Im record. The NAM led a coalition effort in 2012 to reauthorize Ex-Im Bank through September 2014, and we will continue to make it a priority to support a strong Ex-Im Bank that will help ensure that manufacturers have access to competitive export financing that will help create and sustain U.S. jobs.

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Do the Right Thing – Confirm Hochberg

The Senate will have an opportunity next week to the right thing by confirming Fred Hochberg for a second term as the Export Import Bank’s president. This isn’t a small ball vote – it’s a vote for the more than 255,000 jobs in the United States that depend on financing from the Ex-Im Bank and for the $6 billion in small business support that the Ex-Im Bank was responsible for last year alone.

This vote is especially important to manufacturers because Mr. Hochberg has been a champion for the manufacturing community and recognizes the importance of role we play in the economy. In March, Mr. Hochberg told the NAM’s Member Focus magazine that “creating and supporting jobs through exports is our mission and our passion”. Because the Ex-Im Bank needs to maintain a quorum for its Board of Directors, waiting to confirm Mr. Hochberg is a dangerous game that would mean a backup in Ex-Im Bank approvals – putting jobs at risk.

Manufacturers want to reach new markets, grow jobs and increase our global competitiveness – and they want the Senate to confirm Mr. Hochberg.

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Mixed Messages on Trade in President’s Budget

President Obama’s FY2014 budget was released this morning, and it includes some mixed messages on trade. Perhaps most significantly, the budget proposal includes a plan to reorganize – and consolidate – the government’s trade functions. As outlined in the FY2014 budget proposal, the President would like to consolidate six primary business and trade agencies into a new Department. The new Department would include the Commerce Department’s core business and trade functions, the Small Business Administration (SBA), the Office of the U.S. Trade Representative (USTR), the U.S. Export-Import Bank (Ex-Im), the Overseas Private Investment Corporation (OPIC), and the U.S. Trade and Development Agency. It would also incorporate related programs from a number of other departments, including the Agriculture Department’s business development programs, the Treasury Department’s Community Development Financial Institutions Fund program, the National Science Foundation’s (NSF) statistical agency and industry partnership programs, and the Bureau of Labor Statistics.

The President outlined a similar proposal in his 2012 State of the Union address, with a resoundingly negative reaction from the business community. In response to that plan, the NAM joined more than 80 other business groups in a letter arguing that subsuming USTR into a broader trade and business government department would severely harm its credibility and hamper USTR’s ability to play its unique coordinating role within the U.S. government. USTR is statutorily responsible for developing and coordinating U.S. international trade and direct investment policy as well as overseeing negotiations with other countries. The head of USTR is the U.S. Trade Representative, a Cabinet member who serves as the President’s principal trade advisor, negotiator, and spokesperson on trade issues. The NAM continues to be troubled by this reorganization proposal, given the importance of trade to manufacturers in the United States.

In looking at the budget proposals for specific departments, the budget proposal would provide additional resources for trade promotion initiatives and agencies. The Commerce Department budget overview includes an increase for the International Trade Administration (ITA), with a proposed a budget of $520 – or a 14 percent increase over the 2012 enacted level. ITA helps promote U.S. trade and investment and also ensures fair trade through rigorous enforcement of trade laws and agreements. The agency is home to the U.S. and Foreign Commercial Service, which promotes U.S. exports and provides commercial diplomacy support for U.S. business interests around the world.

The Commerce Department’s budget proposal also supports the President’s Export Control Reform Initiative, with $112 million for the Bureau of Industry & Security (BIS) to help sustain export licensing and enforcement activities while moving toward a more predictable, efficient and transparent export control system. The proposal would give BIS an $11 million increase from the 2012 enacted level.

The State Department’s budget proposal includes $307 million for the U.S. Trade and Development Agency, USTR, U.S. International Trade Commission and OPIC – a combined $46 million increase over the 2012 enacted level. The President’s budget proposal also includes $131 million for the Ex-Im Bank’s administrative expenses and Inspector General, a $37 million increase over the 2012 enacted level.

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Pushing for Free Trade Policy in Budget

Earlier today, the NAM sent a letter to the Senate expressing NAM policy positions on the budget resolution (S. Con. Res. 8 ) and its associated amendments. In particular, manufacturers support amendments offered by Senators Orrin Hatch (R-UT), Rob Portman (R-OH) and Ron Wyden (D-OR) to renew trade promotion authority (TPA) and enable the United States to negotiate and implement trade agreements that eliminate barriers to greater market access overseas. TPA, which used to be called fast-track authority, would allow Congress to accept or reject – but not amend – trade deals the Administration negotiates with other countries. Acting U.S. Trade Representative Demetrios Marantis, in testimony before the Senate Finance Committee on March 19, said the Administration was looking forward to working with Congress on TPA. The United States is currently engaged in negotiation on a Trans-Pacific Partnership (TPP) agreement and will be launching Transatlantic Trade and Investment Partnership negotiations with the European Union later this year.

The NAM also supports amendments offered by Senator Hatch to maintain a strong U.S. Trade Representative office and to strengthen U.S. government efforts promoting innovation and protecting intellectual property rights worldwide.

The NAM opposes S.Amdt.374 offered by Senator Mike Lee (R-UT) to defund the Export-Import Bank. Ex-Im Bank authorized more than $35 billion in financing in FY 2012, supporting more than 255,000 American jobs. The Bank worked with more than 3,400 U.S. companies, 85 percent of which were small businesses. Ex-Im is a vital tool in leveling the global playing field, helping manufacturers to offset the financing support our foreign competitors receive from their governments, and in securing new customers in emerging markets. As the “lender of last resort,” Ex-Im has experienced unprecedented demand in the past few years while banks have been hesitant or unable to extend competitive terms on some transactions. The Ex-Im Bank also generates enough fees to offset its costs, contributing the remaining surplus to the U.S. Treasury to help to offset the budget deficit. The 2012 Annual Report outlines the Bank’s accomplishments last year.

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NAM Board Chair Mary Andringa Appointed to Ex-Im Bank Advisory Committee

On Friday the Export-Import Bank of the United States (Ex-Im) announced new appointments to the Bank’s Advisory Committee for 2013 and NAM Board Chair and Vermeer Corporation CEO Mary Andringa has been appointed to the Committee.

According to the Ex-Im Bank the Committee advises the Bank on its policies and programs and in particular how those programs help U.S. exporters compete. 

“I am pleased to announce our 2013 Advisory committee members,” said Ex-Im Bank Chairman and President Fred P. Hochberg.“Our members represent various regions of our nation and all are committed to helping Ex-Im Bank achieve its mission of creating and sustaining U.S. jobs through exports. Our Committee is responsible for offering fresh ideas, perspectives and insights, and I look forward to working with each of our new members.”

As a manufacturer heavily engaged in exporting all over the globe, Mary is well suited to lend her advice and ideas on how to improve the Bank so it can help exporters remain competitive and increase exporters to create jobs. We greatly appreciate Ex-Im Bank Chairman and President Fred Hochberg appointing a great manufacturing leader to the Committee.

The Ex-Im Bank plays a critical role in helping manufacturers in the U.S. export goods to new markets throughout the world. Companies of all sizes benefit from the programs offered by the Bank to help them grow exports, particularly small and medium-sized businesses. The Bank supports approximately 255, 000 American jobs and $50 billion in U.S. export sales.

Joining Mary on the Committee is fellow manufacturer Nancy Mercolino, president and owner of Ceilings Plus and the 2012 Ex-Im Bank Small Business Exporter of the Year Award. Since Ex-Im is such an important tool for manufacturers it is welcome news that the manufacturing voice will be heard on the Advisory Committee in 2013.

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Federal Judge Dismisses Lawsuit Against Ex-Im Bank

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.

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President Obama Signs Ex-Im Reauthorization into Law

Today President Obama signed the Export-Import Bank reauthorization legislation into law during a ceremony at the White House. This marks the end of a long road with a great amount of uncertainty over the Bank’s reauthorization.

The legislation signed by the President today reauthorizes the Bank for three years and increases its lending cap to $140 billion. Small and medium-sized manufacturers will greatly benefit, helping them reach new markets with their exports and create jobs. Last year alone the Bank supported nearly 290,000 jobs and we know that will continue to grow.

Majority Leader Cantor and Minority Whip Hoyer deserve credit for coming to a bipartisan agreement that was able to swiftly pass the House and Senate.

As our competitors overseas continue to increase export financing it was absolutely vital that we reauthorize Ex-Im or risk falling behind, costing us jobs and damaging our competitiveness.

Manufacturers are leading our nation in innovation and job creation but we also need help from Washington to help level the playing field. With 95 percent of the world’s consumers living outside our borders we need to do more to increase exports, resulting in more jobs here at home for manufacturing workers.

Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.

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