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SOURCE Export-Import Bank of the United States
Report Also Highlights the Importance of the U.S. Export-Import Bank To Ensure Competitiveness for American Businesses and Workers
WASHINGTON, June 25, 2014 /PRNewswire-USNewswire/ -- Today, Export-Import Bank (Ex-Im Bank) Chairman and President Fred P. Hochberg unveiled the Bank's Annual Competiveness Report to Congress, which underscores the need for continued Ex-Im support for American exporters to help level the playing field in an increasingly competitive global marketplace.
"There is no stronger brand in the world than 'Made in America,' but the increasingly aggressive approach by some foreign competitors in the export financing marketplace presents an ever-growing threat to U.S. jobs," said Export-Import Bank Chairman and President Fred P. Hochberg. "Our job at the Export-Import Bank is to back American workers and ensure that U.S. exporters, especially small businesses, remain competitive and have the support they need to export their products and create jobs here at home."
The Bank's competitiveness report for 2013 shows that while for decades, global export competition was governed by international standards put in place to ensure that companies could compete on free-market factors like price and quality rather than on aggressive government financing, today the global marketplace is changing. While 100 percent of official support for trade operated under these international rules 15 years ago, today that number has plummeted to 34 percent. Currently Russia, China and other countries offer subsidies and financing terms – including support of their state-sponsored companies – that threaten American jobs and export opportunities.
The report also highlights the rapid growth of export financing from three Asian competitors: Korea, Japan and China. These countries provided significantly more export-credit support to their respective domestic companies and industries than did the United States in 2013.
In addition, the report underscores two trends: unregulated competition is expanding and commercial banks have largely withdrawn from pockets of the export-finance arena, including providing support for small businesses. The United States faces more robust competition from export-credit agencies offering terms that are not regulated by the Organisation for Economic Co-operation and Development (OECD), which encourages global export competition based on free-market principles and mutually agreed-upon standards. For example, Ex-Im Bank support for all of its $15 billion in medium- and long-term financing was regulated by the OECD Arrangement, but other OECD member countries offered more than $60 billion alone of unregulated export financing support (on top of $83 billion in export financing governed by the OECD Arrangement).
Nations that are not subject to the OECD framework, including Brazil, Russia, India and China, provided $115 billion in trade-related financing. Unregulated support totaled substantially more than all OECD-regulated support, a trend the report expects to continue and one which is poised to place U.S. exporters at a competitive disadvantage absent the tools made available by Ex-Im Bank.
Moreover, the report found that the appetite of commercial banks for long-term projects continued to diminish since the implementation of Basel III and other banking reforms. As liquidity sources for certain projects remain scarce, export-credit agency support has become more necessary to fill gaps in the trade finance marketplace and ensure that American exporters remain competitive. Consequently, U.S. exporters will continue to rely upon Ex-Im Bank support as they seek to take advantage of emerging economies and the 95 percent of consumers that live abroad.
ABOUT EX-IM BANK:
Ex-Im Bank is an independent federal agency that creates and maintains U.S. jobs by filling gaps in private export financing at no cost to American taxpayers. The Bank provides a variety of financing mechanisms, including working-capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services. In the past fiscal year alone, Ex-Im Bank earned for U.S. taxpayers more than $1 billion above the cost of operations.
In FY 2013, Ex-Im Bank approved more than $27 billion in total authorizations to support an estimated $37.4 billion in U.S. export sales and approximately 205,000 American jobs in communities across the country. For the year, the Bank approved a record 3,413 transactions – or 89 percent – for small-businesses. Small business exporters can learn about how Ex-Im Bank products can help them increase foreign sales at http://exim.gov/smallbusiness. For other information about Ex-Im, visit www.exim.gov.
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