With some 95 percent of today’s consumers beyond our borders, it’s difficult not to acknowledge that the United States needs to increase its exports to thrive economically. As consumer strength grows across the globe, the U.S. must ensure that it’s pursuing every possible course of action to get its exports into the expanding marketplace. One such method is through the use of the Export Import (Ex-Im) Bank.
The bank serves as America’s export credit agency, with a mission to assist “financing the export of U.S. goods and services to international markets.” Over the last eight decades, the Ex-Im Bank has stepped in and helped businesses when other private financing tools were lacking. The Bank’s success is exemplified in its overall loan default rate of less than 2 percent, and in the last fiscal year, only 0.25 percent. In 2013, it generated $1 billion for the U.S. Treasury.
The bank supports small businesses and large companies across New England as they look to export goods and services to foreign markets. Indeed, in the six states, the bank has agreed to finance $3.73 billion in exports since 2007, including $1.012 billion in Massachusetts. Meanwhile, there were $2.5 billion in disbursements for the exports that were financed, supporting some $6.45 billion in exports related to the Ex-Im Bank authorized amount. Nationally, the bank last year enabled more than $37 billion in exports from thousands of companies, supporting over 200,000 American jobs.
Despite this success, the charter of the Export Import Bank is set to expire Sept. 30. Recently, The New England Council joined more than 850 other businesses and business groups from all 50 states in urging members of Congress to reauthorize the bank’s charter. While there have been questions about the need for continuing the Ex-Im Bank, one only has to view the practices of our main economic competitors, many of which have an equivalent to the Ex-Im Bank to support their nations’ businesses. If we hope to compete with the likes of China, India and Brazil, the United States should not unilaterally remove this proven export driver.
A number of representatives and senators see the merit in reauthorizing the Ex-Im Bank’s charter; however, Congress has only weeks to act. It’s imperative for the continued growth of New England exporters that they have access to this supplemental financing capability to remain on a competitive footing with the rest of the world. Congress should expeditiously take up and pass legislation that will continue this vital entity. The clock is ticking.
James T. Brett is president and CEO of The New England Council, an alliance of businesses, academic and health institutions, and public and private organizations that promotes economic growth throughout New England.