Nov 15, 2019 - 9:30am

5 Reasons to Reauthorize Ex-Im Bank Now


Senior Writer and Editor, Strategic Communications

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A cargo ship leaves the Port of Miami
A cargo ship leaves the Port of Miami.

At a time when more than 95% percent of global consumers reside outside the United States, international trade is more vital than ever. But buying and selling abroad carries inherent risk. What if you can’t obtain financing for your overseas sales?

Luckily, these problems were considered long ago and the U.S. Export-Import Bank (Ex-Im) was created to fill the gap. Ex-Im provides financing and loan guarantees to U.S. companies who export and their customers. The Bank’s primary mission is to step in and provide financing when commercial banks can’t — or won’t — provide funding.

The only bad news is that reauthorization for Ex-Im will run out November 21 if Congress fails to pass a funding bill to keep the government open. This funding will likely be extended to December 20 as part of a continuing resolution, but this is only a short-term solution.

To help convince lawmakers to act strategically, here are the top five reasons to approve a long-term reauthorization for the Ex-Im Bank:  

1. Ex-Im supports jobs in your state.

Ex-Im Bank has supported more than 1.7 million jobs in all 50 states. The Bank lists success stories in your state, in case you’re curious.

2. Ex-Im Bank helps America’s small businesses.

In 2019, more than 90 percent of Ex-Im Bank's transactions directly supported American small businesses across the country.  

Ex-Im Bank has helped small businesses including:

  • The former Dodge Cork Company, a family-owned small business in Pennsylvania, by offering export credit insurance. The insurance enabled the company (renamed ECORE International) to protect against nonpayment and reach new buyers through more competitive terms. Over the past five years using Ex-Im, they have grown from 265 employees to over 400.  
  • Texas-based BCH Trading Company’s (BCH) through its loan guarantee program which supported $40 million of BCH’s exports from 2013 to 2017. Those sales indirectly support approximately 50 jobs per year at BCH.
  • Commodore Technology in New York with a revolving loan that increased its exports 15% by supporting nearly $6 million in sales. Overall, Ex-Im has supported $19.1 million in Commodore's international sales from 2013 to 2018.
3. Foreign countries have much larger Ex-Im Banks — and we’re losing the fight.

Ex-Im is not a unique idea and many other countries have their own version of the Bank. They are called export credit agencies (ECAs) — and they’re designed to help their exporters prosper. Today, there are a total of 113 ECAs or similar entities providing some type of export credit support.

But America is a laggard in the scope and offerings of its export funding. In contrast, China’s official ECAs — Sinosure and China EXIM — have quadrupled their funding over the past decade. And other countries aren’t far behind, according to the U.S. Ex-Im Bank recent global competitiveness report

China’s official ECAs — Sinosure and China EXIM — have quadrupled their funding over the past decade. And other countries aren’t far behind, according to the U.S. Ex-Im Bank recent global competitiveness report.  

“China’s standard MLT support has trended upward for 10 years, reaching approximately $39 billion last year. The next highest levels of official MLT support were from Italy ($12.4 billion), Germany ($12 billion), and Korea ($10.6 billion).”

To compare, the U.S. devoted $0.3 billion, less than a hundredth of China’s support to their exporters: “In contrast, [the U.S.] EXIM’s MLT support for U.S. exports was $300 million, due to the lack of a board quorum…”

Hopefully, this number will increase now that Ex-Im can approve larger deals again with its reestablished quorum. Nevertheless, this map appearing in Ex-Im’s “competitiveness report,” plainly shows how China’s support for its exporters dwarves the support our Ex-Im Bank provides to U.S. exporters.

This puts U.S. companies in the position of fighting with one hand tied behind their backs. It’s hard to compete when you are facing well-funded, focused behemoths like these. The potential results? Ex-Im puts it plainly: “…without a fully authorized EXIM, we are literally giving away hundreds of billions of dollars in business to foreign competitors. “  

4. This administration (and past administrations) support(ed) it.

Ex-Im Bank has been a favorite of U.S. presidents for decades.  

Here’s former President Ronald Reagan on the Bank:

"Exports create and sustain jobs for millions of American workers and contribute to the growth and strength of the United States economy. The Export-Import Bank contributes in a significant way to our nation's export sales."

And here are some thoughts from former President Bill Clinton:

"Export expansion obviously encourages our most advanced industries. I am committed to promoting these exports, and what's where the Ex-Im Bank plays an important role."

In fact, since its inception in 1934, Ex-Im has been supported by fourteen consecutive presidents — seven Republicans (if you include President Trump) and seven Democrats.

In 2017, President Trump joined them and made his commitment to Ex-Im clear:  

“It turns out that, first of all, lots of small companies are really helped, the vendor companies...But also, maybe more important, other countries give [assistance]. When other countries give it we lose a tremendous amount of business.”

5. Ex-Im Bank returns money to the U.S. Treasury.

Perhaps, the greatest thing about Ex-Im is that it returns money to the Treasury. You heard that right. Ex-Im is essentially a profitable bank. Due to shrewd investments, low default rates, and the collection of interest and fees — the bank turns a profit regularly and returns that profit to the Treasury to help reduce the deficit.

How much? It’s in the billions and keeps growing:

“Since 1992…EXIM has generated $9.6 billion in revenues above what the Bank has received after providing for all expenses, loan-loss reserves, and administrative costs.”

If there’s one thing we can agree on, it’s that more government agencies could do the same. Growing American jobs and exports — while returning money to the taxpayer? It’s hard to argue with that!

About the Author

About the Author

Senior Writer and Editor, Strategic Communications

Thaddeus is a senior writer and editor with the U.S. Chamber of Commerce's strategic communications team.