(Editor’s Note: Many Virginia businesses are involved in international trade. This article deals with an issue directly impacting Virginia’s economy.)
Today, exports are more important than ever to American businesses, manufacturers, and the overall strength of our nation’s economy. With 95 percent of the world’s consumers living outside the United States, many companies can be more successful if they are able to expand and thrive in the global marketplace.
With that in mind, it seems like an easy call to support reauthorization of the Export-Import Bank — one of the hottest topics in Washington right now.
The Ex-Im Bank is an independent federal organization that has historically enjoyed bipartisan support, as it has been highly successful in helping American companies export goods since 1934. In fact, just last year the bank facilitated $37 billion of exports, thereby bolstering about 205,000 U.S. jobs.
However, some Republican members of Congress have expressed hesitation in supporting this proven booster for private-sector U.S. jobs. While it has become easy to make a habit of criticizing policies of the current administration, this is an organization that is to be commended, not condemned. After all, what’s more Republican than an entity that spurs American business and jobs, while helping to reduce the federal deficit at no cost to taxpayers? That’s exactly what the Ex-Im Bank does, and American companies rely on it to survive in hypercompetitive foreign markets in which governments unfairly prop up and heavily subsidize their own nation’s companies.
I believe it’s important to remember that President Ronald Reagan supported the Ex-Im Bank. When Reagan signed the reauthorization in 1986, extending the bank’s charter for six years, he noted that it “sends an important signal to both our exporting community and foreign suppliers that American exporters will continue to be able to compete vigorously for business throughout the world.”
Reagan’s message still rings true today.
Small businesses and manufacturers, the engines that drive job creation in the American economy, rely on the bank the most for support in the global marketplace. In fact, nearly 90 percent of the bank’s transactions are with small businesses.
Ex-Im Bank has helped small manufacturers like BLS Enterprises in Illinois expand their exports to China and Australia, among other places. BLS is a small, family-owned company that produces track pads for the road-building industry and sells them worldwide. When their foreign customers would prefer to finance purchases, rather than paying cash up front, Ex-Im Bank helps guarantee that payment. Ex-Im Bank has never had to step in to cover a customer’s lack of payment for BLS, but having their support gives Barry Stoughton, the company’s president and founder, peace of mind and helps him pursue new customers abroad.
Our nation’s long-term prosperity depends on continuous and healthy export growth, and, fortunately, the superior quality of American-made goods and services are in high demand across the globe. As
developing economies continue to grow and free trade deals are negotiated to eliminate barriers, American businesses and manufacturers have the opportunity to seize upon valuable market share. Without the Ex-Im Bank, our home-grown businesses will face a strategic disadvantage in the global marketplace. With more than 60 official export credit agencies around the world supporting their own domestic industries, it’s vital that American companies be able to turn to Ex-Im Bank when they need financing support.
As the “lender of last resort,” Ex-Im Bank steps in to cover market gaps when commercial banks and other private-sector lenders are unable or unwilling to provide export credit, even with a reasonable assurance of repayment. American companies aren’t receiving a handout from the government through the Ex-Im Bank. In fact, U.S. companies pay a fee for the export credit insurance and foreign customers pay their loans back with interest. The agency not only pays for itself, but generates a profit to taxpayers. Last year, the bank sent $1 billion in surplus funds to the U.S. Treasury.
The Ex-Im Bank continues to show its worth by helping to reduce the federal deficit, while enhancing businesses’ competitiveness and supporting thousands of high-paying jobs for Americans. With the Ex-Im Bank’s charter set to expire just weeks before the November election, Republicans have an opportunity to show voters their allegiance to the party’s founding principles and help U.S. companies compete on their merits, on a level global playing field, by supporting reauthorization.
The reauthorization of the Ex-Im Bank should be a no-brainer for members on both sides of the political aisle. An organization that encourages economic growth and job creation, while returning billions to the United States without costing taxpayers a dime, is one to be cherished.
(This article first ran in the Washington Examiner on April 25, 2014)
George Allen was Republican governor of Virginia from 1994-98 and represented the state in the U.S. Senate from 2001-07.
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