Contact: William Dube
WASHINGTON - (July 28, 2014) As the official export credit agency of the United States, the Export-Import (Ex-Im) Bank plays a central role in fostering U.S. traded sector competitiveness and overall growth. In 2013 alone, the bank facilitated the export of over $37 billion worth of U.S. products and services, supporting 200,000 jobs and returning a surplus to the Treasury. However, despite its value, the bank is under heavy attack from a variety of ideological and special interest critics. If these "advocates" succeed in killing the agency it would likely hamper American industry and put us even further behind our global competitors.
In the report, The Export-Import Bank's Vital Role in Supporting U.S. Traded Sector Competitiveness, the Information Technology and Innovation Foundation (ITIF) debunks the claims of the bank's ideological opponents and urges Congress to reauthorize the agency and increase its exposure cap. It also argues that given the significant increases in export credit financing being provided by many other industrialized nations, reauthorization is essential to ensuring the future competitiveness of American firms.
"The Ex-Im Bank is the definition of a successful government program, promoting American exports in areas where private financing is lacking while paying for itself through the collection of interest and fees," notes Stephen Ezell, Senior Policy Analyst with ITIF and co-author of the report. "Failing to reauthorize the bank on the basis of a free market, populist ideology will only hurt the American economy."
Populist opponents, from both the left and right, oppose the Ex-Im Bank as an example of big-business "crony capitalism." But they define that as any policy that helps companies in the U.S. meet the challenge of global competition. Moreover, in 2013, almost 90 percent of Ex-Im Bank transactions directly supported small- and medium-sized enterprises (SMEs), assisting over 3,400 U.S. SMEs in launching or expanding their export activities.
In addition, while the United States argues over whether export credit financing is even necessary, other nations are expanding their support. In 2013, China issued three times as much new medium- and long-term export credit than the United States, and over the past five years China and Germany issued four and five times as much export credit as a share of GDP, respectively.
"If the Ex-Im Bank were disbanded the simple reality is that U.S. exports of aircraft, locomotives, power-generation equipment, and thousands of other products and services would be replaced by those of producers in Asia or Europe, whose still-operating export credit agencies would step in to fill the void," argues Ezell.
Ezell urges Congress to move quickly to reauthorize the agency, prior to its existing authorization expiring on September 30. The bank's market cap should also be increased to at least $160 billion by 2018, which would put the United States closer in line with the export finance being provided by its competitor nations.
"In the increasingly globalized, high-tech economy, a strong traded sector is more important than ever to overall economic health and job creation, and if we don't ensure the continued operation of the Ex-Im Bank, we risk losing out in the race for innovation advantage," Ezell adds.
Read the report.
The Information Technology and Innovation Foundation (ITIF) is a non-profit, non-partisan think tank whose mission is to formulate and promote public policies to advance technological innovation and productivity internationally, in Washington, and in the states. Recognizing the vital role of technology in ensuring prosperity, ITIF focuses on innovation, productivity, and digital economy issues. Learn more at www.itif.org.