Yes: Bank’s critics keep forgetting about jobs
Business owners often work nearly around the clock to ensure their companies survive and thrive in the global economy. They know more than anyone what works and what doesn’t. For 300 exporters in Illinois — most of them small businesses — thriving has meant working with the U.S. Export-Import Bank to boost sales overseas.
This small government agency is up for reauthorization on Sept. 30, and a few vocal interest groups are urging Congress to kill the bank. In doing so, they’re ignoring the consequences to the U.S. economy and, in particular, to small companies.
Don’t listen to them.
This debate is about jobs and manufacturing. Kill the Ex-Im Bank, and you kill jobs and undermine manufacturers. Support the Ex-Im Bank, and you end up supporting the thousands of manufacturing companies across the United States that rely on it to grow sales overseas and keep jobs local.
Since 2007, the Ex-Im Bank has supported $6 billion in export sales from Illinois, according to publicly available data. That means the Ex-Im Bank has supported approximately 38,000 jobs in the Land of Lincoln. That’s a lot of jobs.
The companies working with the Ex-Im Bank are in your backyard and employing members of your community.
Itasca-based fire hose and pump manufacturer W.S. Darley & Company and St. Charles-based gear and motor manufacturer Bison Gear & Engineering are just a few of the many companies in Illinois that have used the Ex-Im Bank to export their products abroad.
The Ex-Im Bank is the official export credit agency of the United States. It helps companies of all sizes compete abroad. With some $11 trillion in manufactured goods traded globally on an annual basis, manufacturers have a lot to gain if they can win more foreign sales. Yet, businesses in the United States face intense competition in the global marketplace where more than 60 foreign export credit agencies are being funded by foreign governments to help their companies win those same sales and try to beat out U.S. firms.
From 2009 to 2013, the Ex-Im Bank has supported 1.2 million U.S. jobs at no cost to taxpayers. The Ex-Im Bank takes in fees and interest that more than cover its annual operations. Since Ex-Im takes in more than it uses, it has been able to build up a loan loss reserve of $4 billion in the case of nonpayment.
Any company that exports and meets Ex-Im’s eligibility criteria can use the bank’s services. While not every exporter requires Ex-Im services, many companies need it to begin exporting or when private lenders are unable to provide the credit financing and other services required for overseas transactions. We remember all too well how difficult the Great Recession was. Small companies in particular suffered because financial institutions retreated and when it came time to provide loans small companies were the hardest hit. The Ex-Im Bank stepped up to the plate during the recession and expanded its financing and other services that were vital to small companies trying to ship products around the world, including into fast-growing Asian economies.
While the economy is improving and private credit is less constrained, the Ex-Im Bank continues to play an important role. Private lenders still find it hard to take on small business export sales (where the exported product cannot serve as collateral due to lending regulations) or finance long-term projects, particularly in emerging markets, where private lenders have fewer resources and lack the specialized knowledge to determine the appropriate risk. Working with the Ex-Im Bank is sometimes the only way that U.S. exporters can bid on certain foreign projects, particularly where the foreign purchaser is a government or state-owned enterprise.
The Ex-Im Bank needs to be reauthorized by Sept. 30. If it shuts down, it amounts to giving our foreign competitors an automatic win. We’ll be helping their economies and hurting our own.
Foreign countries aren’t having this debate. The Import-Export Bank of China, for example, grew to nearly $154 billion in 2013, more than five times Ex-Im’s lending cap of $27 billion in the same year. Canada’s comparable agency — Export Development Canada — is more than three times as large as the Ex-Im Bank.
If the Ex-Im Bank is not reauthorized, companies in every state in the country will lose export sales, and American manufacturing and jobs will be at risk.
Don’t let that happen. Support the Ex-Im Bank and support U.S. jobs and manufacturing in Illinois and throughout our country.
Linda Dempsey is vice president, International Economic Affairs, at the National Association of Manufacturers, which represents more than 12,000 manufacturers around the country.