In Annual Competitiveness Report, Hochberg Describes Path to Success in Tough Global Market
WASHINGTON, July 30, 2013 /PRNewswire-USNewswire/ -- Today, Export-Import Bank Chairman Fred P. Hochberg outlined the unprecedented challenges facing our nation's exporters in a keynote address at the Center for American Progress. During his speech, Hochberg spoke about how U.S. companies are often forced to go head-to-head with foreign governments who offer attractive financing, provided a strong defense of Ex-Im Bank, and outlined how U.S. companies can succeed in an increasingly competitive global environment.
A full copy of Chairman Hochberg's competitiveness speech is available online.
In conjunction with his speech, Hochberg released Ex-Im Bank's 2012 Competitiveness Report. The Bank has produced these reports for Congress annually since 1972, and this year's report the challenging trends in trade finance driven by emerging economies.
Excerpts from Hochberg's speech
- "American products are the best in the world. And on a level playing field, they often come out on top. But, today more than ever, foreign governments are willing to do whatever it takes to close a sale – putting massive resources behind their chosen exporters, which are often state-owned enterprises."
- "In this year's competitiveness report, we found that China, Korea, Japan and others are ramping up government export support... Yet, here at home, Congress has required the Treasury Department to begin negotiations with our competitors to end export credits...To end export credits when our competitors are playing by a completely different set of rules...This would be a self-inflicted wound our economy cannot sustain."
- "Make no mistake, foreign governments would love to see Ex-Im go out of business and swoop in and snatch the $50 billion worth of exports we financed last year. They would love to have those 255,000 American jobs for themselves. Failing to reauthorize our charter next year is a particularly bad idea in light of the growth of the global middle class and the unprecedented competition America faces from Asia and Russia, among many others."
Key findings from Ex-Im Bank's Competitiveness Report
- Commercial bank capacity has declined and cost of funds has increased worldwide since the global financial crisis, shifting the volume of demand from commercial lenders to export credit agencies (ECAs).
- The global financial crisis has altered the landscape, affecting economic progress in Europe while manufacturing prowess has vastly improved in Asia. Many Asian countries have ambitious export plans to gain market share and the financing that goes along with it.
- U.S. exporters compete in many markets and sectors that other countries have targeted as a "national interest," either explicitly as part of their national policy, or implicitly by making available a range of official financing tools intended to maximize the flow of national benefits.
- More and more financing is being offered outside of OECD guidelines. But it's not just interest rates. It is open season on other inducements as non-OECD countries continue to use financing to sway purchase decisions.
About Ex-Im Bank
Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing at no cost to American taxpayers. In the past five years (from Fiscal Year 2008), Ex-Im Bank has earned for U.S. taxpayers nearly $1.6 billion above the cost of operations. The Bank provides a variety of financing mechanisms, including working capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services.
Ex-Im Bank approved nearly $35.8 billion in total authorizations in FY 2012 – an all-time Ex-Im record. This total includes more than $6.1 billion directly supporting small-business export sales – also an Ex-Im record. Ex-Im Bank's total authorizations are supporting an estimated $50 billion in U.S. export sales and approximately 255,000 American jobs in communities across the country. For more information, visit www.exim.gov.
SOURCE Export-Import Bank of the United States