With some 95 percent of today’s consumers beyond our borders, it is difficult not to acknowledge that the United States needs to increase its exports in order to thrive economically. As consumer strength grows across the globe in the years ahead, the U.S. must ensure that it is pursuing every course of action possible to get American exports into the world’s expanding marketplace. One such method is through the use of the Export-Import Bank of the United States.
The Ex-Im Bank serves as the United States’ export credit agency, with a mission of assisting in “financing the export of U.S. goods and services to international markets.” Over the last eight decades, the Ex-Im Bank has stepped in and helped businesses when other private financing tools were lacking. The bank’s success is exemplified in its overall loan default rate of less than 2 percent, and in the last fiscal year, only 0.25 percent. In 2013, the Ex-Im Bank generated $1 billion for the U.S. Treasury.
The Ex-Im Bank supports small businesses and large companies across New England as they look to export goods and services to foreign markets. Indeed, in the six New England states, the total amount of exports that the Ex-Im Bank agreed to finance since 2007 has been $3.73 billion, including $49.8 million in Rhode Island alone. In that same time, there were $2.5 billion in disbursements for the exports that corresponded with that financed amount, supporting some $6.45 billion in exports related to the Ex-Im Bank authorized amount. Nationally, the Ex-Im Bank last year enabled more than $37 billion in exports from thousands of companies, supporting more than 200,000 American jobs.
Despite this success, the charter of the Export-Import Bank is set to expire on Sept. 30. Recently, The New England Council joined more than 850 other businesses and business groups from all 50 states in urging members of Congress to reauthorize the charter of the Ex-Im Bank. The council also has weighed in with key House Financial Services Committee members as well as congressional leaders from our region urging them to support the reauthorization of the Ex-Im Bank charter.
While there have been some questions about the need for continuing the Ex-Im Bank, one only has to view the practices of our main economic competitors, many of whom have an equivalent to the Ex-Im Bank to support their nations’ businesses. If we hope to compete with the likes of China, India, Brazil and others, the United States should not unilaterally remove this proven export driver.
A number of representatives and senators see the merit in reauthorizing the Ex-Im Bank’s charter. However, Congress has only weeks to act before it will expire. It is imperative for the continued growth of New England exporters that they have access to this supplemental financing capability in order to remain on a competitive footing with the nations of the world. The New England Council believes that Congress should expeditiously take up and pass legislation that will continue this vital entity. The clock is ticking. •
James T. Brett is the president and CEO of the New England Council.