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For two years, the Export-Import Bank (Ex-Im) has been put in a tough position, and American exporters have paid the price.
Even though a supermajority in Congress expressed its will by reauthorizing Ex-Im in December 2015, the bank hasn’t had a quorum on its board to approve financing deals of more than $10 million.
Ex-Im isn’t just working with one hand tied behind its back. It’s more like having one hand and two feet tied together, hopping around trying to help American exporters. According to Ex-Im’s 2016 annual report, only $5 billion in financing was authorized, the lowest level in 40 years.
As a result, the U.S. has been put at a disadvantage.
The American Action Forum finds that since it has lacked a quorum, Ex-Im has been unable to authorize 7,768 financing deals worth $42.56 billion. What’s more, nearly 7,000 of those deals worth $10.59 billion would have gone to small businesses. And this doesn’t include all the small business suppliers that are helped when Ex-Im finances major purchases from larger companies like airplanes and construction equipment.
While Ex-Im has been on the sidelines, other countries continue to be active on the trade financing front, as I noted in July:
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.
The road to lifting this self-imposed barrier starts tomorrow when the Senate Banking Committee holds a hearing on Ex-Im board nominees.
Earlier this year, President Donald Trump nominated five nominees to the Ex-Im board. The U.S. Chamber strongly supports Kimberly Reed, Claudia Slacik, Judith Delzoppo Pryor, and Spencer Bachus because they have the experience and expertise to guide the bank in its mission to support American exports.
However, the U.S. Chamber opposes the nomination of former Rep. Scott Garrett as president of the Export-Import Bank.
As a member of Congress, Mr. Garrett was a vocal opponent of the Ex-Im Bank and actively worked to shut it down. Putting him in charge of the bank would give him extraordinary power to block trade financing deals that support American exports.
Earlier this year, President Trump explained the value of Ex-Im:
It turns out that, first of all, lots of small companies will really be 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.
It’s time to get the Ex-Im Bank up and running again. As was noted in a U.S. Chamber letter to the Senate Banking Committee in September, this means the Bachus, Pryor, Reed, and Slacik nominations should be allowed to stand on their own and receive confirmation votes before the Senate as soon as possible. With a quorum of the board, Ex-Im will be able to finance more job-supporting exports.
American exporters and their workers have been waiting long enough. It’s time to unshackle Ex-Im so it can once again promote American competitiveness all across the globe.