The National Association of Manufacturers brought fresh ammo to the fight over reauthorizing the U.S. Export-Import Bank today with release of a study that finds the U.S. is being outpaced by the export support its top competitors are providing to their industries.
The report, “The Global Export Credit Dimension,” finds that the export credit agencies of nine top trading partners – Brazil, Canada, China, France, Germany, Japan, Mexico, South Korea and the United Kingdom – provided nearly $500 billion in assistance in 2013 compared to the $27 billion provided by the Ex-Im Bank.
China’s Ex-Im Bank offered more than $153 billion in export credit financing in 2013, an increase of nearly 57% from 2012. The export credit agencies of China, Japan, South Korea and Germany are all larger than the U.S. Ex-Im Bank, according to the report.
U.S. Ex-Im Bank financing supported about 2.42% of all U.S. exports, the report shows, while Germany (3.63%), China (12.5%) and Canada (20.29%) supported a higher share of their countries’ exports.
“The size and scope of the Ex-Im Bank pales in comparison to the official export credit agencies of our top competitors,” said Jay Timmons, NAM’s president and CEO, in releasing the report prepared by the Economist Intelligence Unit. “If Congress eliminates the Ex-Im Bank, these other nations will jump in and fill the void, and manufacturers in the United States stand to lose tens of billions of dollars in business.”
Congress has until September 30 to reauthorize the Ex-Im Bank, an independent federal agency designed to provide financing help to U.S. exporters when private funding is not available. In FY 2013, the bank reported it approved more than $27 billion in loans to support an estimated $37.4 billion in U.S. export sales and approximately 205,000 American jobs. The bank said 89% of its 3,413 transactions were for small businesses.
A number of business leaders have come out in support of the bank. At a July 25 roundtable convened by NAM, Westinghouse CEO Danny Roderick said, “From the energy industry perspective, the Ex-Im Bank is an absolute necessity in order to compete globally against state-funded and state-subsidized companies.”
Paul Oneid, a senior vice president at Holtec International Corp., an energy equipment supplier to Westinghouse, said Ex-Im Bank support was necessary for a project Holtec was pursuing in the Ukraine, called the Central Spent Fuel Storage Facility. He said the project would create 200 manufacturing jobs in Pennsylvania and Ohio.
“Without the CSFSF, Ukraine is dependent on Russia to keep its nuclear reactors running,” Oneid said. “The Ex-Im Bank must continue to live: It is the only viable loan guarantor that can enable funding for this project.”
But a variety of conservative groups, including the Heritage Foundation and the Club for Growth, have accused the Ex-Im Bank of practicing “crony capitalism” and say it should be abolished. Rep. Kevin McCarthy of California, the House Majority Leader, and Rep. Paul Ryan, the House Budget Committee chairman, both have voiced opposition to the bank.
Rep. Darrell Issa of California, who chairs the House Oversight and Government Reform Committee, told Bloomberg Television on July 28 he expected a short-term extension of the bank’s charter, but said reform was needed at the bank to combat corruption and mismanagement.
In a hearing before Issa’s committee today, Ex-Im Bank Chairman Fred Hochberg in written testimony said he was aware of an investigation by the bank’s inspector general into the conduct of four employees, three of whom have left the bank and the other who is on administrative leave. The employees are being investigated for possible kickbacks and other misconduct.
Hochberg testified the bank "has a zero tolerance policy for ethics violations and we will prosecute to the fullest extent of the law."