- - Wednesday, September 10, 2014

I spent much of the summer traveling across the United States meeting with manufacturers who are driving this country’s economic growth. It was — and always is — enlightening to be outside the D.C. Beltway, where manufacturers grapple not only with increasing and sustaining sales, but with the real-world implications of Washington’s latest action or inaction. Whether it was oil-rig makers in Texas or construction-equipment builders in Iowa, the question I heard most frequently was the same: What’s going to happen with the Export-Import Bank?

Ex-Im Bank is a small, little-known agency that you probably wouldn’t have heard of if it weren’t caught in another Washington-created crisis. You can go elsewhere for the arguments against the bank, but remember this: The men and women reviving America’s manufacturing sector with their sweat and grit want and need Ex-Im Bank to keep its doors open.

Are we going to listen?

The 80-year-old Ex-Im Bank’s mission is a simple one — to grow jobs in America by helping companies of all sizes export U.S. products abroad. The bank does this by providing loans, loan guarantees and insurance to help American businesses trying to grow sales overseas. Ex-Im Bank provides financing that is critical to fill gaps when private-sector financing for small and large manufacturers is not available. In fulfilling this mission, Ex-Im Bank has supported 1.2 million jobs in the past five years.

For instance, Applied Machinery Corp. of Houston uses Ex-Im Bank to support sales of its land-based drilling rigs to overseas customers in places such as Argentina, Colombia, Nigeria, the Philippines and Saudi Arabia. Without Ex-Im Bank supporting its exports, the company could shrink — that would mean an impact that could affect a few hundred jobs as well as ripple effects to its suppliers across Texas, Oklahoma and elsewhere. The help that Applied Machinery and other companies receive isn’t free. They’re charged fees to get assistance from Ex-Im Bank, and customers overseas pay interest on their loans. That’s why Ex-Im Bank operates without taxpayer assistance, has developed its own risk-reserve account and still returns funds to the U.S. Treasury.



Thousands of companies — the majority of them small ones — use Ex-Im Bank when they have no other options in terms of lending, guarantees and insurance. Ask any of them, and they’ll tell you that they prefer to work directly with the private sector to sell their products abroad and do so as much as possible.

Foreign competitors are stepping up their game. In fact, China provides at least five times the assistance that Ex-Im Bank does. If the United States fails to back up its exporters, our exporters and hundreds of thousands of jobs are at risk. It is in our national interest to stand alongside our job creators and work to ensure that the global playing field is level.

For many companies, particularly small- and medium-sized businesses, Ex-Im Bank services are the only pathway to completing transactions in foreign markets, for long-term transactions and for expensive capital goods, especially in fast-growing emerging markets. Regaining the lost foothold will be extremely difficult. Simply put, a failure to reauthorize the bank for the long term puts thousands of U.S. exporters at substantial risk.

Let’s clear up a common misunderstanding right now. Ex-Im Bank does not create demand for new airplanes, mining equipment or other products overseas. Foreign customers are already demanding those products. Ex-Im Bank is critical in helping determine whether those foreign purchasers will buy products made in the United States by American workers or choose foreign-made products.

Make no mistake — this debate is already harming manufacturers. Many of them build products that are years in the making and can’t afford to start manufacturing a multimillion-dollar piece of equipment if they don’t know whether Ex-Im Bank will be around. Similarly, foreign customers want to ensure that their source of supply will be reliable and certain.

While Congress is currently considering a short-term, kick-the-can-type approach that will keep the lights on at the bank for a few months, U.S. exporters — and their foreign customers — require the long-term certainty in the bank’s operations that their own business plans demand. If the United States fails to seize the opportunity, other nations will not remain idle. They will provide their industries with every possible advantage to sell to the markets that want U.S. goods.

Opponents are quick to point out that Ex-Im Bank directly supports just 2 percent of all U.S. exports. That’s a fact. The bank is a targeted tool and a last resort, helping businesses gain a foothold in a competitive global market and ensuring manufacturers can compete on a level playing field. For manufacturers trying to claw their way out of the recession and gain market share overseas — a daunting task considering today’s tough regulatory and tax environment — we should be opening doors and opportunities, not threatening to slam them shut.

Jay Timmons is the president and CEO of the National Association of Manufacturers.

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