A loud debate in Congress over the future of the U.S. Export-Import Bank (Ex-Im) is underway. Without congressional action, Ex-Im will be unable to provide new loans or guarantees to American exporters after its charter expires on September 30, according to uschamber.com.
“In other words, Ex-Im will be forced to close its doors if Congress doesn’t act. The result will be lost sales and lost jobs here at home,” announced uschamber.com.
The Bayou State is the nation’s sixth largest exporter and leads the nation in export revenues per capita. Over the last seven years, Ex-Im has helped Louisiana companies export more than $2 billion worth of goods and services to markets in Mexico, Brazil, and Colombia, and has supported nearly 10,000 jobs in the state.
Ex-Im’s critics don’t seem to grasp that the bank’s support is indispensable to small business exporters. Without Ex-Im guarantees, commercial banks won’t allow small businesses to use foreign receivables or inventory as collateral. Far from crowding out the private sector, Ex-Im guarantees let private banks extend loans and guarantees that they wouldn’t be able to make otherwise.
As Congressman Charles Boustany Jr. warned in a recent op-ed in The Hill: “Failure to reauthorize the bank would put millions of dollars in export contracts at risk, potentially threatening these businesses and Louisiana jobs.” Boustany recently spoke with Jonathan Mann, owner of 360 International, an industrial generator manufacturing company in Duson. “He told me he was worried about losing a multimillion-dollar contract if the bank’s charter is allowed to expire,” said the congressman.
Another company that relies on Ex-Im is DSC Dredge, a dredging equipment manufacturer in Reserve, Louisiana. DSC employs around 150 people, and its exports top $20 million annually, accounting for about half of its business. Since 2006, DSC has used Ex-Im to help win overseas contracts.
CEO Bob Wetta describes the impact losing Ex-Im would have on DSC: “Without Ex-Im, we would basically cut our revenues and our workforce in half. That’s 75 people. Ex-Im helps level the playing field between us and our foreign competitors.”
Omni Specialty Packaging in Shreveport is a manufacturer of lubricants and chemicals for automobiles. Omni uses Ex-Im credit insurance to backstop loans from its private bank.
CFO David Barber explained why Ex-Im is integral to Omni’s business: “If we don’t have insurance on foreign receivables, we can’t use that collateral to borrow working capital. We employ about 250 people, and most of those manufacturing jobs are in the Shreveport area. We wouldn’t have gotten our foreign business off the ground without Ex-Im in 1999. We’re proof that it works.”
“As Congress debates whether or not to authorize the Export-Import Bank, we have a stark choice. We can either export goods and services, or we can export jobs,” concluded Senator Mary Landrieu.
Source: uschamber, August 5, 2014