Trade Numbers Add Up to Export Policy Need, Full Funding for Ex-Im Bank Vital to U.S. Trade

WASHINGTON, D.C. - The United States Chamber of Commerce said last year's record $369.7 billion trade deficit highlights the need for full funding for the U.S. Export-Import Bank in order to advance American products overseas and correct the growing imbalance between imports and exports.

"The record trade deficit should serve as a warning that now would be the worst possible time to reduce support for U.S. exports," said Thomas Donohue, Chamber president and CEO. "It has been more than a decade since funding for the Bank has been increased and we have fallen behind our competitors."

Recent reports have indicated that the White House Office of Management and Budget is considering a 24 percent reduction in the Ex-Im Bank's budget, below the current fiscal year level of $927 million. According to the Chamber, a 24 percent reduction in available loan-loss reserves would limit the Bank's financing to about $8.5 billion in FY 2002. By comparison, the Bank provided $12.6 billion in export financing in FY 2000. A significant increase in demand for such financing is anticipated for FY 2002.

Since 1994, the Ex-Im Bank has supported nearly 12,000 transactions with $68.5 billion in authorized financing that annually sustains an estimated 200,000 jobs directly among exporters and suppliers, plus one million jobs indirectly among suppliers throughout the United States.

Pointing to a rank-ordered list of export credit use in 1998 by major countries, Donohue noted that the United States ranks right below the Netherlands and only slightly above Spain, neither of which approaches the United States in export volumes.

"Unilaterally abandoning the playing field, by cutting the Ex-Im Bank's funding, would be a giant step in the wrong direction," said Donohue. "We should invest in those tools which will keep us the number one exporting nation in the world."

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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