One Senator is Thwarting Bigger EXIM Deals
It has been half a year since the Export-Import Bank of the United States (EXIM) was reauthorized after some political controversy and drama which saw the agency almost closed down for several months.
Yet thanks to the efforts of a single U.S. senator, Richard Shelby, a Republican of Alabama, the agency is still not able to finance export deals worth more than $10 million. That’s because Shelby, chairman off the Senate Banking Committee, has held up the presidential appointments of a third member to the five-member EXIM board.
EXIM deals worth more than $10 million require board approval and the board cannot approve anything without a quorum of three members. Although 98 percent of EXIM applications have been for deals under $10 million, in dollar terms, two-thirds of the agency’s assistance has gone for deals exceeding $10 million.
That leaves many large manufacturers such as GE and Boeing, which have made extensive use of EXIM support out in the cold and opting to work with credit finance agencies of foreign governments to support manufacturing and exporting from those locations.
Just recently, GE announced it was working with the French export credit agency COFACE on a gas turbine project, and according to a report in the New York Times, Boeing is talking to Britain’s agency about financing airplane purchases equipped with UK-made Rolls-Royce engines.
According to the same report in the Times, over 30 transactions worth a total of $20 billion to U.S. exporters are in limbo until Shelby unfreezes the EXIM board appointments.
National Association of Manufacturers President and CEO Jay Timmons stated that the delay in approving EXIM board members puts U.S. jobs at risk.
“The Senate needs to vote on the nominee for the EXIM board of directors to get this important institution up and running again,” he said. “Overwhelming majorities in both chambers of Congress voted to reauthorize the bank last year, and there should be no further delay in making it fully operational. Global volatility poses significant challenges for U.S. businesses and manufacturers of all sizes. We must have every available tool to secure jobs at home and sell our products to customers overseas.”
Peter Buxbaum is web editor of Global Trade.
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