During the first decade of the new millennium, America’s share of global exports of manufactured goods fell from 13.8 percent to 9.6 percent. Not coincidentally, its share of global output dropped rapidly too, and an average of over 40,000 U.S. manufacturing jobs disappeared every month for ten straight years. Having struggled for generations to tear down the barriers to free trade, America found itself losing out in a globalized economy.
One reason for this disappointing performance was the chronic efforts of other countries to subsidize exports. Despite signing trade agreements in which they committed themselves to abandoning measures that distort the free interplay of market forces, countries like China and France continued to give their exporters tax breaks, subsidized loans and any number of other unfair advantages. Because the United States has been less inclined to provide such aid, its exporters have lost market share even when their products were world-class.
The U.S. Export-Import Bank has proven to be a powerful tool in leveling the playing field with unfair competitors. As the official export credit agency of the federal government, it is empowered to extend loans, loan guarantees and credit insurance to companies like Boeing, Caterpillar, United Technologies and other exporters that might have difficulty matching the financing terms of foreign competitors. Ex-Im Bank assistance exists mainly to counter the subsidies given to foreign companies, and its programs do not cost taxpayers any money. In fact, over the last five years it has generated $3.4 billion beyond its cost of operations that was returned to the Treasury.
Those facts are especially pertinent today, because Ex-Im Bank’s charter expires on September 30 and must be renewed by Congress if the agency is to continue assisting U.S. exporters. If the agency is not reauthorized, hundreds of lesser enterprises will suffer along with the nation’s leading exporters, because 80 percent of all Ex-Im Bank transactions support small business. Without the agency’s help, Boeing would have been hard-pressed to export many of the airliners it sold overseas last year, Oshkosh would have been unable to sell fire trucks in Africa, and rail equipment made in Illinois never would have found its way to Brazil.
Reauthorization of Ex-Im Bank is vital to U.S. export competitiveness. Our economy cannot stand to lose more jobs, and needs to raise its share of global exports rather than suffer further erosion. The fact that this can be accomplished with no new burden to taxpayers, and that it is done mainly to counter the unfair trading practices of other nations, should be enough to win support for an agency that has helped America compete since 1945.
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