AEROSPACE INDUSTRIES ASSOCIATION
AMERICAN BUSINESS COUNCIL OF THE GULF COUNTRIES
AMT – THE ASSOCIATION FOR MANUFACTURING TECHNOLOGY
BANKERS ASSOCIATION FOR FINANCE AND TRADE
COALITION FOR EMPLOYMENT THROUGH EXPORTS
EMERGENCY COMMITTEE FOR AMERICAN TRADE
INTERNATIONAL ENERGY DEVELOPMENT COUNCIL
NATIONAL ASSOCIATION OF MANUFACTURERS
NATIONAL FOREIGN TRADE COUNCIL
SMALL BUSINESS EXPORTERS ASSOCIATION
U.S. CHAMBER OF COMMERCE
U.S.-CHINA BUSINESS COUNCIL
April 16, 2002
The Honorable Dennis Hastert
Speaker of The House
House of Representatives
Washington, D.C. 20515
Dear Mr. Speaker:
As the House Republican leadership considers scheduling floor action on H.R. 2871, to reauthorize the Export-Import Bank, we write to reiterate our strong support for the Bank. Our collective members include many of the U.S. exporters and financial institutions that rely on the Bank as the lender of last resort in meeting the fierce competition for export opportunities in world markets. In FY 2001 alone, the Bank financed some 2,300 export transactions, 90 percent of which were for small and medium-sized firms.
Ex-Im Bank plays a crucial role in supporting the export of American-made goods and American-provided services in markets where commercial financing is difficult to obtain and when foreign competitors have the active support of their governments’ export credit agencies. In 2000 alone, the most-active export credit agencies worldwide financed more than $500 billion in exports. Ex-Im Bank financed $15.5 billion in U.S. exports that year.
To deal with this increasingly aggressive foreign competition, H.R. 2871 would authorize the Bank to respond to new export financing programs offered by foreign governments, including so-called “market windows”. The bill also provides the Bank with clear authority to use the tied-aid war chest to respond aggressively to foreign governments’ use of foreign assistance to supplement their export credit activities (so-called “tied-aid”).
It is important to note that Ex-Im charges risk-based interest, premiums and other fees for its loans, loan guarantees and insurance. These fees are paid by exporters, banks and overseas customers. Last year, the Bank’s revenues generated a $1 billion net income for the U.S. government. Moreover, the Bank maintains some $10 billion in reserves to protect against the risk of loss. The Bank’s conservative lending policies and aggressive loss-recovery efforts have resulted in a very low 1.9 percent historical loss
Amendments of Concern
Two amendments may be offered which, in our judgment, would impede the ability of U.S. exporters to effectively utilize the Bank, thus weakening the Bank’s programs and causing a loss of U.S. exports and the jobs of American workers. We urge you to oppose these amendments if offered during House floor action:
1) Rep. Sanders may offer an amendment to deny Ex-Im Bank financing for U.S. companies that are growing internationally. It would make the Bank completely unusable for any U.S. exporter that is succeeding in world markets. The proposal runs contrary to U.S. trade policy and market-based economic growth. It would make no sense for the Congress to seek open world markets, but then deny U.S. firms access to one of the key tools to take advantage of these new opportunities. Since Ex-Im Bank only finances U.S.-origin goods and services, shutting off the Bank would only result in making the Bank less effective in creating and keeping U.S. jobs here at home.
2) Rep. Schakowsky may offer an amendment to require a human rights assessment of about 600 export transactions supported by the Bank annually. This proposal is unnecessary because the Export-Import Bank Act already includes a procedure under which the Bank relies on the U.S. State Department for human rights analysis. The amendment would require the Bank to establish an unnecessary new bureaucracy that would duplicate the long-established State Department human rights office. The amendment would require U.S. exporters to submit any proposed transaction over $10 million to a costly and time-consuming notice and comment period, which inevitably would lead to the loss of export sales to our foreign competitors. The current, long-established, process works well to ensure that human rights issues are analyzed by the State Department’s experts and included in the Bank’s consideration of export transactions.
We urge the House to approve H.R. 2871 and to oppose amendments that would weaken the Bank and impede U.S. exports.
Don Carlson, President, AMT-The Association For Manufacturing Technology
Calman J. Cohen, President, Emergency Committee For American Trade
Timothy E. Deal, Senior Vice President, U.S. Council For International Business
John W. Douglass, President and CEO, Aerospace Industries Association
John Hardy, Chairman, Standing Committee, International Energy Development Council
Robert Kapp, President, U.S.-China Business Council
James Morrison, President, Small Business Exporters Association
John Pratt, Chairman, American Business Council of the Gulf Countries
William Reinsch, President, National Foreign Trade Council
Edmund B. Rice, President, Coalition For Employment Through Exports
Consider W. Ross, Executive Director, Bankers Association for Finance and Trade
Franklin J. Vargo, Vice President, National Association of Manufacturers
Willard A. Workman, Senior Vice President, U.S. Chamber of Commerce