Ex-Im Ready to Step In With Long-Term, Fixed Rate Support for U.S. Exports, Says Report
Against the backdrop of the European debt crisis and tight liquidity constraints, The Export-Import Bank has shown it’s ready and able to step in with its long-term, fixed rate support for U.S. exports when the private sector had withdrawn from export finance, according to Ex-Im Bank’s 2011 Competitiveness report to Congress. But as the recovery continues and liquidity gradually returns to commercial markets, different competitive challenges are emerging, the report said.
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Significant volumes of unregulated Organization for Economic Cooperation and Development (OECD) export credit programs that fall outside the purview of the OECD rules and non-OECD export programs, such as those offered by Brazil, India, and, most prominently, China, are being “deployed strategically around the globe, in favor of foreign exporters and national champions,” the report said. A conservative estimate shows that, collectively, these forms of government financing exceed all official export finance activity of the G-7 nations’ export credit agencies combined.
Ex-Im Bank estimates that in 2011 there was roughly $100 billion in unregulated OECD export financing and an additional $60 billion from Brazil, India, and China. The Bank has produced the annual report for Congress since 1972 and this year’s report deals with the “challenging trends import finance driven by both OECD and non-OECD economies, “ Ex-Im said.
Separately, Ex-Im Bank Chairman Fred Hochberg said American companies' ability to win foreign sales is being challenged by a “dramatic rise in official export credit financing.” Speaking at the Center for American Progress, he said that “for the foreseeable future, our economic competitors will strongly support their companies, and industries that serve their national strategic interests.” They will “continue creating their own national champions.” How the U.S. responds to this trend will “determine if we can create the millions of middle class jobs our nation needs today and in the years ahead."
"American companies have what it takes to win in the global economy,” he said.. They can go head-to-head with any company in the world, but “they can't go head-to-head with the government of another country.,” he said.