Export-Import Bank Subject of Congressional Testimony by NAM Executive
For 80 years, the Export-Import Bank of the United States provided financing, guarantees, and credit insurance in support of U.S. exports. The bank’s charter expired last June 30 after Congress refused to reauthorize it.
National Association of Manufacturers (NAM) Vice President of International Economic Affairs Linda Dempsey testified today before the U.S. House of Representatives Foreign Affairs Subcommittee on Terrorism, Nonproliferation, and Trade at a hearing evaluating the Export-Import Bank in the global economy.
The following are excerpts from Dempsey’s statement.
On the Importance of EXIM to Growing US Exports. “The Export-Import Bank is essential to boosting exports of U.S. products. In FY2014, Ex-Im Bank enabled more than $27 billion in exports – leveraging about $20.5 billion in authorizations. Nearly 90 percent of those transactions directly supported small-businesses, with an estimated $5 billion in support for small business exporters. Furthermore, the Bank has maintained its incredibly low default rate of through the recession and through several years of record growth. At the end of FY2014, the Bank’s default rate was less 0.2 percent.”
Impact of EXIM on small and medium businesses. “Small businesses, both those that are direct exporters and those that supply domestically to larger U.S. exporters, will feel the blow if Congress fails to reauthorize EXIM Bank. Those companies that utilize EXIM Bank insurance programs to enable their working capital will be faced almost immediately with a dilemma about how to pay their workers and make the mortgage payments on their facilities, let alone consider growing and hiring. Suppliers whose U.S. customers lose out on large infrastructure, aerospace and energy projects overseas because they cannot bid without access to EXIM Bank will also see their orders shrink. Of the bank’s 3,300 small business transactions in FY 2014, 545 companies were first-time EXIM users. EXIM’s role in jump-starting new small and medium-sized exporters is particularly important.”
On EXIM Lapse Hurting U.S. Manufacturers. “This week, the NAM released a new analysis about the impact to manufacturers since the charter of the U.S. Export-Import Bank expired on June 30. The expiration of the bank’s charter has left several thousand manufacturers, many of them small and medium-sized exporters, without adequate access to capital and the financing they need to compete with foreign manufacturers. Orbital ATK, for example, recently lost a bid to sell a satellite to Azerbaijan because the customer identified EXIM Bank financing as a must-have. International Green Structures, a small business with a manufacturing facility in Texas, has a significant deal to sell its sustainable shelters in Kenya stuck in a holding pattern until EXIM Bank’s charter is renewed.”