For nearly four years, one of America’s major export promotion tools, the U.S. Export-Import (Ex-Im) Bank, has barely been able to function as it has lacked a quorum for its board of directors. Since 2017, the president’s four nominees for the board have awaited Senate confirmation, but no action has been taken despite strong bipartisan support for the nominees and the bank itself. Recently, National Association of Manufacturers (NAM) President and CEO Jay Timmons has called for an immediate resolution to this issue in a letter to Senate leadership and highlighting the damage wrought by the absence of a fully functional export credit agency.
There are more than 100 other functioning export credit agencies globally, but ours isn’t on that list.
At last count, there are 110 other export credit agencies around the world, and their sole function is to vigorously champion their own domestic industries to win sales that in many cases could and should be won by manufacturers in America. Meanwhile, the Ex-Im Bank can only consider deals that are under $10 million. It’s a little bit like forcing exporters in the United States to use a horse and buggy, while all the other countries are driving around in cars.
While we’re standing on the sidelines, other countries are winning.
Other countries want our manufactured goods because they’re the best in the world, but in many instances, without an Ex-Im Bank, there’s no way for our manufacturers to get their exports financed or guaranteed for sale in foreign markets. Take Amer-Con, which had a $250 million deal with the African country of Angola to provide 1,500 school buses and logistical support. The deal fell apart because there was no Ex-Im financing available, putting 3,000 jobs at risk. Despite having a better product and better pricing, the sale went to a Brazilian company because they were able to offer government-backed financing.
We’re jeopardizing jobs at small businesses around the country.
While some think the Ex-Im Bank only helps large corporations, this couldn’t be more wrong. Thousands of small businesses directly use the bank, and even more participate in supply chains of larger companies. Take Click Bond of Carson City, Nevada. The company manufactures hardware commercial aircraft, and as a supplier, it loses out when sales are not made. This is important not just for companies but their employees. Eighty percent of Click Bond’s 400-plus employees depend on exports of commercial aircraft for their jobs.
We’re handing deals to China at the expense of American interests.
China has the world’s largest and most flexible rival system to the Ex-Im Bank. Its two export credit agencies provide $34 billion in medium- and long-term financing and nearly $50 billion in investment support—and that was just last year alone. Meanwhile, the Ex-Im Bank only provided about $200 million. The United States has effectively disarmed its Ex-Im Bank, while China’s has grown—all at the expense of well-paying manufacturing jobs in the United States.
The damage has been long term and will be lasting.
Neglect of the Ex-Im Bank is resulting in real and lasting damage to American competitiveness, American jobs and the American manufacturing sector. The NAM estimates that since the bank lost its ability to operate fully in mid-2015, manufacturers have forfeited billions of dollars in sales. This extends to approximately 80,000 fewer manufacturing jobs in 2016 and 2017 and the loss of at least $119 billion in output.
The time to act is now. If the Senate fails to confirm President Donald Trump’s nominees to the bank, their nominations will lapse in the new year—potentially leaving the bank without a quorum well into 2019. Manufacturers need a level playing field to succeed, and the Ex-Im Bank is an important tool in providing that.