Neil Bradley Neil Bradley
Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy, U.S. Chamber of Commerce


July 14, 2017


American companies need all the tools available to compete in the global marketplace. The Export-Import Bank of the United States (Ex-Im) is one of them. It’s not too much to ask if the possible head of it is dedicated to its mission.

Trade finance has played a key role in international commerce for centuries. While the vast majority of trade finance is provided by private sector banks, official export credit agencies (ECAs) have long played an important role in select circumstances.

Today, every major trading nation has an official export credit agency (ECA): There are more than 85 operating today, and the Organization for Economic Cooperation and Development (OECD) reports that they have extended more than $1 trillion in trade finance in recent years.

In the U.S. Ex-Im plays that role by providing financing and guarantees for U.S. companies’ exports. Its benefits to the U.S. economy are plain: In the last fiscal year when it was fully functional (FY 2014), Ex-Im provided financing or guarantees for $27.5 billion in U.S. exports, thereby supporting more than 164,000 American jobs.

Ex-Im is among the smallest of government agencies. In fact, the ECAs of the world’s other top trading nations provide many times more export credit assistance to their exporters than Ex-Im does to U.S. exporters. China, for example, provided its exporters with an estimated $670 billion in ECA financing over the last two years, while Ex-Im has equipped American exporters with about $590 billion in financing over its entire eight-decade history.

Ex-Im is especially important to U.S. small- and medium-sized businesses, which have long accounted for nearly 90% of Ex-Im’s transactions. In addition to these direct beneficiaries, tens of thousands of smaller companies that supply goods and services to large exporters also benefit from Ex-Im’s activities.

As noted, most exports are financed by commercial banks or the companies involved, but Ex-Im is indispensable in some circumstances. Ex-Im is necessary because ECA support is often required even to bidon a wide variety of foreign business opportunities. This includes requests for tender from both public and private sources, including opportunities as diverse as infrastructure projects, nuclear power plants, and contracts to provide medical equipment to hospitals.

In addition, Ex-Im is necessary because it is par for the course for expensive capital goods such as aircraft, turbines, and locomotives to be sold worldwide with ECA backing. ECA support can make or break a deal.

Some critics charge that Ex-Im picks winners and losers, skewing the marketplace. On the contrary, Ex-Im extends loans and guarantees to all applicants that meet its strict lending requirements but does so only when commercial credit is unavailable or when it is necessary to counteract below-market credit from foreign ECAs.

Finally, American taxpayers can cheer the fact that Ex-Im helps reduce the federal deficit by hundreds of millions of dollars. Far from being a subsidy for corporations, Ex-Im charges fees for its services that have generated $7 billion in revenue for the U.S. Treasury over the past 20 years above and beyond federally appropriated funds for the Bank’s operations.

Ex-Im’s charter was reauthorized in December 2015 with two-thirds majorities in both chambers of Congress voting in favor. However, three of the five seats on Ex-Im’s board of directors are empty, depriving it of the quorum it needs to be able to function properly. As a result, Ex-Im is unable to extend loans or guarantees in excess of $10 million. Larger exporters — and the tens of thousands of smaller firms in their supply chains — are operating at a clear disadvantage in global markets.

A board quorum is essential in other ways. In its latest reauthorization of the bank, Congress established new risk management requirements, such as establishing a risk-management committee and appointing a chief ethics officer, but it is unable to execute these requirements without a board quorum.

In April, President Donald Trump gave his full-throated endorsement of Ex-Im. “It’s a very good thing, and it actually makes money,” he said. “It turns out that, first of all, lots of small companies will really be helped, the vendor companies. But also maybe more importantly, other countries give it, and…we lose a tremendous amount of business,” he added to the competitive challenge posed by foreign nations’ ECAs.

Which brings us to Scott Garrett, the longtime opponent of Ex-Im nominated to be its chairman. In our view, Garrett must explain why he should be confirmed to lead an organization that he has said should be put out of business. He must also commit to not undermining or hindering its mission. If he can't, it is clear he won’t be confirmed.

The impasse over Ex-Im’s board of directors has put billions of dollars in U.S. exports and tens of thousands of American jobs at risk. America needs a fully functioning Ex-Im Bank so that U.S. exporters are no longer at a unique disadvantage in the global marketplace.

About the authors

Neil Bradley

Neil Bradley

Neil Bradley is executive vice president, chief policy officer, and head of strategic advocacy at the U.S. Chamber of Commerce. He has spent two decades working directly with congressional committee chairpersons and other high-ranking policymakers to achieve solutions.

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