Manufacturers argued on Tuesday that the failure of Congress to reauthorize the Export-Import Bank puts U.S. firms even further behind in an increasingly competitive global export credit financing market.
A new report from the National Association of Manufacturers (NAM) concluded that amid the massive size and growth of foreign export credit activity around the world, eliminating Ex-Im would make it much more difficult for U.S. manufacturers to compete in rapidly growing sectors such as infrastructure and transportation.
{mosads}“The size and scope of the Ex-Im Bank pales in comparison to the official export credit agencies of our top competitors,” NAM President and CEO Jay Timmons.
“If Congress eliminates the Ex-Im Bank, these other nations will jump in and fill the void, and manufacturers in the United States stand to lose tens of billions of dollars in business.”
The export financing arms of nine of the nation’s top trading partners — Brazil, Canada, China, France, Germany, Japan, Mexico, South Korea and the United Kingdom — provided nearly half a trillion dollars in export credit assistance to their exporters in 2013.
That amount is more than 18 times greater than the $27 billion provided by the Ex-Im Bank last year.
While the U.S. Ex-Im Bank supported about 2.42 percent of all U.S. exports, Germany (3.63 percent), China (12.50 percent) and Canada (20.29 percent) supported a larger share of their countries’ exports.
China dominates the export credit financing landscape, with Beijing’s bank authorizing more than $153 billion in 2013, helping to grow exports by nearly 57 percent from 2012.
Without Ex-Im, tens of billions of dollars in U.S. exports will be put at risk annually and foreign manufacturers will win foreign sales, the report said.
Plus, the growth of U.S. small-business manufacturers will be stunted.
The bank’s charter expires Sept. 30. House conservatives are aiming to eliminate the bank because they say it is a form of corporate cronyism.
A House Oversight and Government Reform subcommittee will look at problems at the bank at a Tuesday morning hearing. Bank President Fred Hochberg is set to testify.
The NAM report said that Ex-Im financing has become even more important given growing constraints on private-lending options for certain types of exports, including small business transactions and exports related to long-term projects and emerging markets where foreign financing is much more active.
Most developed countries and many developing countries have official export credit agencies with more than 60 operating worldwide.