In Senate Speech, Cantwell Calls for Long-Term Extension of Export-Import Bank
Senator: Businesses need ‘certainty and predictability’ to close export deals and grow economy
WASHINGTON, D.C. – In a speech on the U.S. Senate floor, Senator Maria Cantwell (D-WA) today called on Congress to pass a long-term extension of the Export-Import Bank or risk harm to businesses in Washington state and elsewhere that use the agency’s services to grow exports and create jobs in the United States.
The Export-Import Bank is set to expire unless Congress renews its charter by Sept. 30. Cantwell urged Congress to pass a long-term renewal of the Bank’s charter to avoid harm to small businesses and a growing U.S. export economy.
“Today we’re here to make sure a long-term reauthorization of the Export-Import Bank is implemented,” Cantwell said. “We have 21 days left to get this right and to help our economy continue to grow, but we have to do something here in the United States Senate. We have too much of a supply chain in the United States of America -- with manufacturing in aerospace, in agriculture, and in automobiles -- to give it all away by simply not reauthorizing the Export-Import Bank in a timely fashion.”
Exports are a contributor to the nation’s economic growth, with the United States exporting $2.3 trillion of goods and services in 2013, according to a U.S. Joint Economic Committee report released Tuesday. Manufactured goods accounted for $1.2 trillion of all exports – an increase of 38 percent since 2009, according to the report.
Failing to reauthorize the Export-Import Bank would put U.S. companies at a “competitive disadvantage,” according to the report. About 60 other countries – including the world’s top 10 exporters – have similar export credit agencies.
The Ex-Im Bank authorized 3,413 small-business transactions in fiscal year 2013, an increase of 34 percent from 2009, according to the report.
“That’s a step in the right direction, but that is being threatened if Congress doesn't reauthorize this important credit agency to make sure that these deals get closed,” Cantwell said.
The Export-Import Bank is the export credit agency for the United States, helping to finance or insure the purchase of U.S. goods by foreign customers to help American companies expand. It has supported more than 180 exporters in Washington state, two-thirds of which are small businesses. About 85,000 jobs in Washington state are supported by sales involving Ex-Im Bank financing. Nationwide, it has supported $233 billion in exports since 2007.
In July, Cantwell cosponsored legislation that would renew the Bank’s charter for five years. Some members of Congress have called for a temporary extension to keep the agency open for a few months until a permanent solution is reached after the November mid-term elections. But Cantwell, Chairwoman of the Senate Small Business Committee, and Senator Amy Klobuchar, Vice Chairwoman of the Joint Economic Committee, cautioned today against that approach.
“It doesn't give any certainty and predictability to businesses who are trying to close deals,” Cantwell said. “With that many jobs and that much at stake, why would we suggest that we only want to reauthorize it for a couple of months?”
The 80-year-old Ex-Im Bank’s reauthorization has been backed by business groups around the country, including the U.S. Chamber of Commerce, the Association of Washington Business, the National Association of Manufacturers and the Business Roundtable.
The Export-Import Bank is self-supported through interest payments and fees, turning a profit for the U.S. taxpayer. In 2013, the bank transferred $1 billion to the U.S. Treasury.
Below is a transcript of Cantwell’s floor speech.
“Mr. President, I rise to congratulate my colleague, the Co-chair of the Joint Economic Committee, for her report on the importance of the contribution of exports to our economy and the Export-Import Bank.
This report that she is issuing today, which has a picture of cargo container ships leaving the Port of Miami – I could say this picture could be any number of ports around the United States of America, and certainly in my state where one in three jobs is related to trade.
I really appreciate the Joint Economic Committee highlighting at this point in time how important the export economy is to the U.S. economy. My colleague comes from a similar state, where we like to say that we make a lot of great manufactured products, and we're very proud that they are sold in the international marketplace.
But now is no time to curtail a credit agency's ability to help make those sales a reality, when we have fabulous U.S. made products. I very much appreciate the Joint Economic Committee's release on this report. Even though we faced a very disastrous financial collapse six years ago, the report shows that the trade deficit continues to decline. And a headline just recently said, the trade deficit is at a six-month low as exports climb.
It doesn't take a rocket scientist to figure out that a growing middle class around the globe is an excellent opportunity for us to sell U.S. manufactured products. In fact, the middle class is going to double over the next 15 years so that's a great opportunity for us to take American made products and get them into this marketplace.
In fact, last year American companies exported more goods and services totaling $2.3 trillion in value, 13.5% of our gross domestic product. That's a step in the right direction but that is being threatened if Congress doesn't reauthorize this important credit agency to make sure that these deals get closed.
That’s why today we're here to make sure that a long-term reauthorization of the Export-Import Bank gets implemented. Now, I know that we already have about 240 members of the House of Representatives who are on record saying they support a long-term extension of the Export-Import Bank, and I know there are many Senators here in the U.S. Senate who support that.
So why is this taking so long? Some people are even suggesting that we can do just a two-month extension, or three-month extension. Well, I can tell you how ridiculous that idea is, because it doesn't give any certainty and predictability to businesses who are trying to close deals.
One business exporter from Texas said -- quote -- "The Export-Import Bank is absolutely essential to maintain and grow our businesses, and recent reports of the Bank's future have already impacted our bottom line. Our customers need certainty to continue many of their sales abroad.”
This individual Texas company is a reflection of the fact that exports are U.S. jobs. In fact, its $2.3 trillion in goods and services and 11.3 million jobs in the United States that are related to exports, many of those in manufactured products. Why would we risk these kinds of numbers with the uncertainty of a credit agency that helps close these deals?
Why would we even suggest, with that many jobs and that much economic at stake, why would we suggest that we only want to reauthorize it for a couple of months?
I think that's a very wrongheaded approach.
We’ve heard from many other companies, one from Georgia, which was able to increase its annual sales from roughly $500,000 to over $20 million in just a few years, and was able to do so with the Export-Import Bank.
We have 21 days left to get this right and to help our economy continue to grow, but we have to do something here in the United States Senate and that is pass the reauthorization of the Export-Import Bank.
While we were home in August, we heard many, many people talk about this. In fact I'd like to put up a few newspaper headlines that we heard around the country. One from The Roanoke Times, which was an editorial that said, "In our view, small businesses need this" and called for the reauthorization of the Export-Import Bank.
Another newspaper, The Wichita Eagle editorialized in support: "Reauthorize the Ex-Im Bank" and The Columbus Dispatch: "Ohioans benefit from the Export-Import Bank."
These are just three editorials heard around the country that are asking us to reauthorize this important credit agency and make sure that we're giving small businesses and manufacturers the tools that it takes to export.
But my colleague, who is the Joint Economic Committee Chair, brought up an even more specific point which is, where are we going to be in competition as it relates to China when they're chasing economic opportunity all around the globe?
In fact, an editorial that was in The Chicago Tribune on August 15 said -- quote -- "Sub-Saharan Africa's economy is growing about 5.4% a year, outpacing the global rate of 3.6%." Here's Africa with lots of economic opportunity and it was home to many very fast-growing economies in Angola, Nigeria, and Ethiopia.
They go on to say that -- quote -- "The Export-Import Bank plays a small but vital niche role in the U.S. economy as a backstop because commercial banks and other financial firms often find ways to say ‘no’ to deals in developing countries.”
That's from The Chicago Tribune. So newspapers around America get it. This is a key tool for us to access new opportunities that are emerging in developing countries. And the question is, China is already there, they're selling product and they're using their credit agency to help close deals.
Why? Because a lot of banks are uncomfortable either with the size of the deal, the lack of financial players in those emerging markets, and the inability to get these deals closed without the Export-Import Bank and its assistance.
Another editorial that was in The Boston Globe actually talked about a U.S. company that lost a deal because our inability to make a decision here -- quote-- A California company “lost a $57 million contract this year because of ideological posturing in Washington….It's a self-inflicted economic wound".
They are talking about a firm that -- quote -- "Lost its bid to sell technology” that was going to be used in the Philippines only because the Korean competitor could guarantee that their Export-Import Bank would be there.
That's another example of not even waiting to have the negative impact -- we're already having the negative impact because we're not getting this done. So it's very important that we make sure that we reauthorize the Export-Import Bank.
As one company in my state – the Norwest Ingredients company – said, "A short-term extension of the Export-Import Bank does not provide the certainty that we need” to finance these deals.
I think that this is so much what we need to be focusing on, Mr. President. I appreciate my colleague and the Joint Economic Committee's contribution to this report. And she talked, again, about the specifics of what other countries are doing.
This chart shows you the percentage of credit agency resources against the country's GDP; how much they're investing in selling their products around the globe. So we can see what India, China, France, and Germany are doing to basically dwarf what we're doing as far as making sure that our products are sold around the globe.
Mr. President, I wish the financial market was there to help close these contributions, but just as we have a Small Business Administration that helps get financial backers to back small businesses, the Export-Import Bank helps U.S. manufacturers sell their products overseas.
We have too much of a supply chain in the United States of America with manufacturing in aerospace, in agriculture, and in automobiles, to give it all away by simply not reauthorizing the Export-Import Bank in a timely fashion.
So again, I appreciate the Co-chair of the Joint Economic Committee in the release of a report focusing on why exports are so important to our economy, and I yield the floor.”
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