Ensuring fair competition for South Carolina exports
Fairness is essential to our system of global trade. Rules of the road, both formal and informal, exist to help ensure that competitions are fair and others don't tilt the field against American and South Carolina businesses and workers. The U.S. Export-Import Bank (Ex-Im) is a little-known yet important part of this global trading system. Ex-Im costs the U.S. taxpayer nothing, and assists U.S. exporters like Boeing whose sales support hundreds of thousands of American jobs, including more than 6,000 jobs in South Carolina.
Boeing's new final assembly and delivery facility in South Carolina supports growing global demand for the innovative 787 Dreamliner. Approximately 80 percent of Dreamliner sales are for customers in other countries. Sales like these are what Ex-Im supports across the state. According to Ex-Im, last year alone the bank supported nearly $125 million in South Carolina export sales, primarily to Mexico, the United Kingdom, and Australia.
Yet we now risk losing Ex-Im, along with thousands of jobs and a safeguard against hungry foreign competitors and their governments. To avoid this and other negative economic consequences, Congress must reauthorize Ex-Im before its charter runs out on June 1 and provide the bank with the authority it needs to fully support America's surging export growth.
Every major industrial nation has an export credit agency (or agencies!) to support its exports through loan guarantees that help customers secure affordable financing from commercial banks.
Last year Ex-Im supported nearly $40 billion in U.S. exports and 290,000 American jobs. About 80 percent of those transactions involved small businesses, which increasingly rely on exports to grow their revenues. Congress should applaud this fact in the interest of aiding small, medium, and large businesses sell their goods and services to the hundreds of millions of new middle class consumers around the world.
What was the cost to the U.S. taxpayer for these services?
Nothing. In fact, Ex-Im last year turned over $800 million to the U.S. Treasury from the fees it charges foreign customers for its loan guarantees. In total, it has returned $3.4 billion to the taxpayer over the past five years.
By law, Ex-Im may only provide loan guarantees to parties it determines to be a good credit risk, and Ex-Im's track record in assessing risk is excellent, with a default rate of less than two percent.
These facts should make Ex-Im reauthorization a no-brainer. Yet, a handful of members of Congress are slow-walking the reauthorization in hopes of dismantling one of the few current success stories of public-private partnership. They argue that market forces alone should dictate trade flows, with no role for governments or politicians.
If only the world worked that way. The reality is that U.S. competitors in countries like China, India, Brazil, Canada and Western Europe enjoy substantial, aggressive support from their countries' export credit agencies.
And the agencies that support those U.S. competitors are looking for ways to expand their support, not do away with it. Failure to reauthorize Ex-Im would amount to unilateral disarmament and would equate to an unconditional surrender of U.S. jobs and billions of dollars in sales to foreign competitors.
Ex-Im has long enjoyed bipartisan support, and for good reason. It helps American companies large and small to compete effectively in global markets. In doing so it boosts U.S. exports, and it helps create and sustain American jobs. It also helps with deficit reduction.
So let's get on with reauthorizing the bank. It's one government program that works -- especially in South Carolina.
Ray Conner is senior vice president, Sales and Customer Support, of Boeing Commercial Airplanes.