The Rest of the Story on Ex-Im
Faced with Myron Brilliant’s account in Roll Call of the circumstances that make the U.S. Export-Import Bank (Ex-Im) a necessity for many classes of exports, the Heritage Foundation’s Jim DeMint recently responded with a number of arguments advanced by the bank’s critics. A few of his comments call for a specific response.
According to DeMint, “Brilliant implies that the small businesses he profiles would be forced to cut production and lay off workers without export financing from Ex-Im.” DeMint errs: Brilliant doesn’t just imply this—he gives specific examples of rules and regulations—both foreign and domestic—that account for this fact.
International business is conducted in the real world, which doesn’t always align with the preferences of those of us who support free enterprise and free markets. It’s a world where the export credit agencies of the world’s other top trading nations provided 18 times more export credit assistance to their exporters than Ex-Im did to U.S. exporters last year, according to a recent report prepared by the National Association of Manufacturers with data and analysis from the Economist Intelligence Unit.
As Brilliant explains, it is a fact that commercial banks often refuse to extend export finance to small businesses. It is a fact that American firms are barred from selling some products, such as medical equipment, in key foreign markets if they don’t have Ex-Im support. It is a fact that large, overseas projects almost always require bids to come with Ex-Im support.
DeMint points out that “very, very large” companies benefit from Ex-Im, but that’s just part of the picture. Plainly, it is a source of continual annoyance to the Bank’s critics that small businesses account for nearly 90 percent of Ex-Im’s transactions.
Yes, large companies also use the Bank, and when they do—especially for expensive, long-lived capital goods such as aircraft, turbines, locomotives, and nuclear reactors—the dollar amounts involved are large. But so are the numbers of jobs such exports support. In fact, the number of American jobs at stake is “very, very large.”
DeMint avows that the U.S. Chamber is somehow at odds with “the concerns of its local chapters,” but he couldn’t be more wrong. More than 250 state and local chambers of commerce from every state in the union have come out in support of Ex-Im. This roster includes DeMint’s hometown Greenville Chamber of Commerce and his home state South Carolina Chamber of Commerce.
In fact, we hear every day from local chambers of commerce and their members across the nation. They are astonished and angry at the ideological campaign being waged against Ex-Im.
The Chamber takes a back seat to no one in our advocacy against the recent massive expansion of the regulatory state. We are at the fore in pressing for policies to unleash America’s mostly untapped energy potential and to tear down the barriers to international trade that harm both American businesses and consumers.
And we’ve battled to call attention to America’s most predictable crisis—our exploding entitlements, against which all our other fiscal challenges are a drop in a bucket.
Against that backdrop, how does it make sense to attack a small government agency that directly supports American companies competing in tough global markets—at no cost to the taxpayer? At a time when the American people remain focused on the need to create jobs, the campaign to “end Ex-Im” and thereby put at risk hundreds of thousands of American jobs is bad policy and bad politics.