From Dyke Messinger, president of Power Curbers, Inc. in Salisbury, in response to Donald Bryson’s “Export-Import Bank: indefensible corporate cronyism” (July 13 For the Record):
Donald Bryson argues that Americans would be better off without the U.S. Export-Import Bank. This could not be further from the truth. In fact, Ex-Im is a critical tool that helps thousands of manufacturers throughout the United States access foreign markets.
“Who are the winners?” Mr. Bryson asks. The winners are thousands of small businesses in every state that benefited from one of the 3,413 small business authorizations in 2013 – nearly 90 percent of the bank’s total transactions. The winners are manufacturing companies like Power Curbers, which uses Ex-Im to sell concrete paving equipment overseas and employ 80 people in North Carolina. And while big businesses also use Ex-Im services, the benefits also flow to the hundreds of thousands of small- and medium-sized manufacturers that are in these companies’ supply chain.
The fact is that Ex-Im generates money for the Treasury in the fees and interest it collects from its customers – over $1 billion in 2013 alone. That’s after covering all of Ex-Im’s operating costs and maintaining a $4 billion loan-loss reserve for any future claims or defaults.
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Mr. Bryson says that Ex-Im finances “business deals that most private investors wouldn’t be willing to touch.” The reality is that Ex-Im Bank provides critical services – from working capital loans to export insurance – that can make or break a sale for thousands of small businesses seeking to grow through exports where private-sector lending alone is not available on a competitive, market-based rate. If Ex-Im doesn’t step in, foreign manufacturers, supported by their own export credit agencies, will step in to the detriment of manufacturers and workers in the United States. Furthermore, banks in the U.S. face regulatory and legal prohibitions against asset-based lending in many overseas markets or find it too costly to administer such loans to small businesses whose loan size doesn’t generate the required profit. Ex-Im Bank fills these gaps and ensures competitive financing for U.S. exporters.
As the official export credit agency (ECA) of the United States, Ex-Im Bank assists in financing the export of U.S. goods and services to customers abroad. Failure to reauthorize Ex-Im means the only alternative for many foreign customers is one of the nearly 60 ECAs around the world that are willing to back their domestic manufacturers. In those cases, a U.S. company will lose that sale to a foreign competitor.
Mr. Bryson says that Americans are the losers. Americans will be the losers if Congress fails to reauthorize the Ex-Im Bank this fall.
By the way, Ex-Im never provided financing to Enron. It did provide financing to foreign customers of Enron, all loans were paid in full, and the bank collected more than $119 million for U.S. taxpayers.