US Needs a Fully Committed and Operational Export-Import Bank
The United States Export-Import Bank provides loan financing and insurance to foreign buyers of US products, for over 80 years supporting export transactions that wouldn’t otherwise occur when commercial lenders are unable to accept the political or commercial risks inherent in certain deals. Businesses in the United States, small and large alike—as well as their employees—depend on the EXIM Bank, which since 2008 has supported over 1.4 million private-sector US jobs, including 52,000 in fiscal year 2016. In addition to supporting US jobs, EXIM also benefits US taxpayers, contributing nearly $4 billion to public coffers since 2009.
EXIM’s role in supporting high-value-added US exports is more important now than ever, especially as international export competition continues to grow unabated, with other countries hungry to export their products and services to international markets and willing to provide extremely generous financial assistance to facilitate those transactions when necessary. Ninety-six export credit agencies are active worldwide today, and the most significant ones—those of America’s most important economic competitors—are significantly out-investing the United States. In fact, in 2016, the United States accounted for just 0.56 percent of the world’s new short-term official export credit and working capital volumes. America’s $3.7 billion of new short-term export credit was essentially 1/100th of China’s $375 billion, and a fraction of the $119 billion Korea invested, the $52.9 billion from Japan, or Canada’s $47.6 billion. In other words, despite the fact that the US economy is 12.1 times larger than Canada’s, Canada invests 12.8 times as much in export credit as the United States. As a share of GDP, in 2016, Canada invested a remarkable 155 times more in short-term export credit than did the United States.
For its part, China invested more in short-term export credit in 2016 than the rest of the world combined. Likewise, considering other forms of trade-related investment support (e.g., medium and long-term (MLT) credits as well), China continued to provide more support than the rest of the world combined. China’s $34 billion of medium- and longer-term credit in 2016 led the world. In fact, China accounted for an estimated 55 percent of total global trade-related investment support in 2016, much of this to support exports of products manufactured as part of the country’s Made in China 2025 strategy and as the spear of its one-belt, one-road initiative that seeks to deepen trade linkages throughout Central Asia, the Middle East, and Africa.
Source:- Globaltrademag.com
