Export-Import Bank is a Vital Tool for Trade

San Diego Business Journal - 9/15/14

Rep. Scott Peters, Rep. Juan Vargas, Jerry Sanders:

Economic growth, job creation, and maintaining global competitiveness have to be at the top of any Congressional priority list. The Export-Import Bank is a key component in our country’s competitiveness strategy, supporting hundreds of thousands of jobs while promoting economic growth. Congress must act as soon as possible to preserve the services the Bank provides to businesses around the country.

The Export-Import Bank works by facilitating American exports through direct loans and loan guarantees, export credit insurance, and working capital finance. The bank provided export credit insurance to cover a sale by Davex Labs to a European company. The bank provided a letter of credit that allowed Ceilings Plus to bid on an overseas contract. Davex Labs and Ceilings Plus are California companies.

By law, the bank expires at the end of this month, on September 30. If our Export-Import Bank is closed, potential American exporters will be at a competitive disadvantage in facing foreign competitors that have the backing of their governments.

It is difficult to overstate the economic impact the Export-Import Bank has had and continues to have on the United States economy. The Export-Import Bank was created 80 years ago by President Franklin Roosevelt as a key component of his New Deal trade policy to reinvigorate exports during the Great Depression.

Today, as we continue the recovery from the 2008 recession, getting rid of the Export-Import Bank would hamstring the growth of the United States export economy and threaten our global competitiveness. According to its 2013 annual report, the bank supported $34.7 billion in U.S. exports, over 200,000 jobs, and returned over $1 billion to the Treasury for deficit reduction. In a global economy where there are 59 foreign export credit agencies operating abroad to assist competitors to US businesses with nearly $1 trillion in financing, contemplating the Bank’s elimination is akin to waving the white flag in the battle for a stronghold on international consumer markets. 

Nine-five percent of the world’s consumers live outside of the United States. For our businesses to be successful, they need to be able to access these markets. However, many small businesses who are ready to begin exporting don’t know where to start. More than 75% of small businesses expressed concern over receiving payments from foreign customers, according to the Small Business Exporters Association. The Export-Import Bank fills that void of confidence and lends its expertise and experience to these businesses, breaking down the barriers they face to exporting their product sales abroad.

The San Diego Regional Chamber of Commerce recently led a delegation of more than 100 business executives and elected officials on an advocacy mission to Washington, D.C. Delegates met with key legislators to advocate for the bank’s reauthorization and underscored its importance to the region’s business community. In San Diego County’s five Congressional districts, the Bank has supported $2.8 billion in exports spread over 107 exporters. Eighty percent of exporters supported in San Diego County are small businesses.

Whether a business produces innovative medical technologies, cutting edge golf equipment, transportation equipment, or manufacturing products – areas where San Diego companies are leading the way – investment and insurance from the Export-Import Bank can make the difference in selling a product across borders.

To get our economy back on track we should be figuring out more ways to help businesses as effectively as this Bank does instead of contemplating getting rid of an agency that creates jobs, grows businesses, contributes to deficit reduction, and supports our global competitiveness. It is imperative that Congress reauthorize the Export-Import Bank.

Scott Peters represents California's 52nd Congressional District. Juan Vargas represents California's 51st Congressional District. Jerry Sanders is the CEO of the San Diego Regional Chamber of Commerce.


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