Export-Import Bank lending is an important trade tool that can help U.S. exporters gain a foothold in foreign markets amid growing global competition, according to new research released Wednesday.
The American Action Forum (AAF) found that the 80-year-old Ex-Im Bank helps U.S. companies compete abroad because of a lack of private financing options.
“Ex-Im is a way to level the playing field for U.S. exporters as they face market realities like competition from foreign export credit agencies,” the report said.
As a reauthorization for Ex-Im is considered, the AAF’s research outlines reforms on top of those approved in 2012 designed to better protect taxpayers and provide for more transparency at the Bank.
The report said that the export credit agencies in emerging countries have "enhanced the role of the Export-Import Bank in helping U.S. companies competitively export."
The overall mission of the Bank is to create jobs by financing the purchase of U.S. exports to foreign buyers.
The Bank's reauthorization is facing opposition from some congressional Republicans and conservative groups with its charter set to expire Sept. 30.
On Tuesday, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) called on House Republicans to scrap the Bank, calling it a “poster child” for corporate cronyism.
"Its demise would clearly be one of the few achievable victories for the Main Street competitive economy left in this Congress,” Hensarling said.
Earlier this month, Heritage Action joined 30 groups in saying that the Bank’s elimination “would level the playing field and allow U.S. companies to compete for business on their merits rather than the strength of their political ties to the bank.”
But a broad range of business groups, including the National Association of Manufacturers (NAM), argue the Ex-Im Bank is what helps level that playing field, especially for smaller businesses trying to break into new export markets.
Linda Dempsey, NAM vice president of international economic affairs, said critics ignore that nearly 90 percent of all Ex-Im transactions — 3,413 — directly supported small businesses in 2013.
She argued that the Ex-Im Bank can help U.S. companies get first crack at selling their products to foreign buyers as financing agencies in other countries such as China push their own companies into the global economy.
The White House recently sent a five-year reauthorization request to Capitol Hill that would increase the Bank’s lending cap by $5 billion each fiscal year from 2015 through 2018, with the limit capped at $160 billion up from $140 billion.
The Bank, headed by Fred Hochberg, went through a tough reauthorization fight two years ago.
But, in the end, the House and the Senate provided broad support for the reauthorization bill.