More often than not, business is a competition. It’s a competition for new customers, new investment, and new markets – and now more than ever, the competition is global.
Since 95% of the world’s consumers live outside of the U.S., it can take more than just a hard day’s work for a company to find new customers, sell to them, and win them over for the long term. This is especially true for small- and medium-sized enterprises that rely on exporting as a means of sustaining and expanding their business. In fact, American farmers have been vocal in recent weeks about how valuable it is to be able to sell goods in new overseas markets, and that sentiment is widely shared across the U.S. business community.
The problem, though, is this: As the U.S. competes against the rest of the world for access and advantage in global markets, the Export-Import Bank has been pushed to the ropes.
For decades, the Ex-Im Bank has been a steadfast partner for American companies taking on new global markets, providing financing and other support that helps businesses compete for new opportunities abroad. But today, the Ex-Im Bank is completely stifled. The bank doesn’t have a permanent, confirmed chairman, and its board of directors lacks the quorum it needs to issue loans and guarantees of more than $10 million. Consequently, more than $30 billion in deals have accumulated in bank’s pipeline.
Jeffrey Gerrish, the acting president and chairman of the Export-Import Bank, outlined this week how the agency steps up to help American companies do business in markets like the Indo-Pacific, one of the fastest growing and economically significant regions of the world.
Gerrish shared the story of Classic American Hardwoods, a small business based in Memphis, TN, that bounced back from the financial crisis with the support of the Ex-Im Bank. After securing credit insurance from the bank and regaining access to financing, the company was able to rehire 60 employees who had been laid off, and it added another 15 jobs to boot. Thanks to increased export sales, the company’s revenue increased 67%, and today, Classic American Hardwoods exports to 27 countries, including several new markets in the Indo-Pacific.
The Indo-Pacific region holds huge promise for American businesses, and it’s one of many budding global markets that can open doors to economic growth here at home. But with a functioning Ex-Im Bank, the U.S. could start knocking those doors down.
Gerrish put it this way at the Indo-Pacific forum:
If Ex-Im is not there for American businesses, exporters will have to make the difficult decision of whether to take production offshore, get financing from another country’s export credit agency, or lose the sale. None of these options benefit the U.S. economy. … At a time when global economic competition has never been more intense, American businesses and American workers need Ex-Im fighting in their corner.
And John Murphy, the U.S. Chamber’s senior vice president for International Policy, said this of the impact of the Ex-Im Bank stalemate:
In today’s highly competitive global markets, it’s unacceptable to saddle American workers and companies with the unique disadvantage of being the only exporters in the world without the support of an official export credit agency.
This week, the Senate Banking Committee is considering Kimberly Reed for president of the Ex-Im Bank, and the U.S. business community will be pushing for an expeditious nomination process and a favorable report from the committee. Her appointment would break a longstanding logjam over the bank’s leadership that has effectively shackled the agency, even though it was roundly reauthorized in 2015 by supermajorities in the House and Senate.
Quickly confirming strong nominees to lead the Ex-Im Bank and reestablishing its quorum should remain a top priority for policymakers who want to see the U.S. come out on top when it comes to trade. To help American businesses win opportunities in new markets around the globe, the Ex-Im Bank needs to be back in the ring.