Unless Congress acts by September 30, the Export-Import Bank (Ex-Im) will cease to exist and American exporters will find it just that much harder to compete in global markets. The bank was last reauthorized in May 2012; NPES strongly supports its reauthorization again now.
Ex-Imâ€™s critics label it â€œwelfare for corporationsâ€ or â€œcrony capitalism,â€ but the facts say otherwise. Ex-Im is the official export credit agency of the United States that assists in financing the export of U.S. goods and services for thousands of American companies. It operates at no cost to taxpayers, and has a track record of returning money to the U.S. Treasury, over $1 billion in 2013 alone. Ex-Im assumes credit and country risks that the private sector is unable or unwilling to accept. It also helps to level the playing field for U.S. exporters by matching the financing that other governments provide to their exporters.
According to the National Association of Manufacturers (NAM), over the past decade exports grew more than five times as fast as the domestic market. And the U.S. Trade Promotion Coordinating Committee calculates that Ex-Im supports over six thousand jobs per $1 billion of U.S. exports. Moreover, exports to rapidly growing foreign markets are imperative to sustain this job growth, and wonâ€™t be possible without support from Ex-Im.
Additionally, Ex-Im fills critical gaps in private-sector financing for small and large companies alike. More specifically, NAM reports that nearly 90% of Ex-Im transactions directly benefitted small businesses in FY2013, and those sales supported an estimated 205,000 jobs at more than 3,400 companies. But Ex-Im does not provide subsidies or grants, rather companies must pay application and exposure fees for Ex-Im loans, credit insurance and loan guarantees as well as interest on direct loans, which cover Ex-Imâ€™s ex-penses and go into a loan-loss account that would cover any defaults.
Bringing the critical need for Ex-Im closer to NPESâ€™ membership,Â Ron Rose, President of Nova Pressroom Products, NPES Board member and NPES Government Affairs Chairman, reports that his Jacksonville, FL-based company insures its export receivables through Ex-Im. He says the insurance is important in Latin America where longer credit terms are the norm. The Ex-Im insurance program has allowed his company to take a more aggressive sales posture in some key markets. In 2008, export sales were less than 7% of Novaâ€™s total revenue. This number steadily increased to 23% in 2012 when Nova was named the SBA Southeastern Exporter of the Year. The Ex-Im insurance program has given Nova a needed comfort level (at a relatively low cost) that allows it to successfully compete in Asia and Latin America.
On behalf of NPESâ€™ over 600 member companies, President Ralph Nappi commends Ex-Im for its vital role in helping U.S. exporters remain competitive in international markets, stating that â€œ[U.S.] international competitors are aggressively promoting exports and capturing markets, and to stay competitive we can ill afford to eliminate a vital tool for export promotion, finance and job creation such as Ex-Im Bankâ€”in short, we need exports to grow jobs and the economy, and Ex-Im plays a key role in that effort.â€