Due to inaction from Congress prior to its recess, America is now the only major developed nation without a fully functioning version of the Export-Import Bank.
That’s not a distinction wortwh bragging about. The loss of the Ex-Im Bank puts American companies at a competitive disadvantage and prospects for growth and jobs at risk.
The Ex-Im Bank provides direct loans, loan guarantees, credit insurance and other financing to help American companies sell their products abroad. Think of it as the Small Business Administration for exporters.
The bank has supported thousands of companies and about 1.3 million jobs in the last six years. With a strong U.S. dollar causing exports to fall, this is clearly not the time for eliminating export credit.
Honeywell is not dependent on the Ex-Im Bank, but its long-term absence will affect our customers and the overall economy. Many of Honeywell’s competitors have access to their own versions of the Ex-Im Bank. In fact, there are more than 60 foreign counterparts to the bank around the world, and many of them are growing.
• China’s export credit financing grew in 2014 by 40 percent, according to the Ex-Im Bank’s annual Competitiveness Report, delivered to Congress each June.
• According to the same report, just one of China’s export credit agencies has provided more financing to Chinese exports in the last two years than the U.S. Ex-Im Bank spent in its entire 80-year history.
• Korea’s official trade-related support was more than double that of the U.S. last year, despite its much smaller economy.
There are those who argue the Ex-Im Bank is just a form of corporate welfare that benefits only a few companies. If every other country were to stop this form of support for exports at the same time, it would be a different story. But we are competing in a new world with new global competitors, and those countries strongly support exports.
Twenty years ago, there were only about a billion people involved in the global economy — basically the U.S., Western Europe and Japan. Today, there are about 4 billion people participating in the global economy with the addition of China, India and former members of the Commonwealth of Independent States, plus numerous other countries that have recognized prosperity for their citizens comes from a robust private sector.
Standing alone on this issue will only hurt U.S. exports and our economy and jobs. To unilaterally disarm would be a huge mistake for all Americans. We are only about one-quarter of the global economy, and we need to trade with the other 75 percent.
America has a long history as a leader in the global business arena, with policies that reverberate throughout the world. Here is one instance where no one is following us. The minority in Congress that wants the agency eliminated is ignoring the realities of global competition. Instead of signaling leadership, letting Ex-Im lapse signals our willingness to unilaterally disarm.
Congress should focus on strengthening the accountability and transparency of the Ex-Im Bank. By focusing on reform, Congress can improve the bank and help preserve and create many American jobs. That would be true leadership.
Cote is chairman and CEO of Honeywell International Inc.