As topics for conversation go, the Export-Import Bank of the United States is only slightly sexier than solid waste disposal. But it’s almost as important – especially for a state like Washington that is so dependent on trade.
“Ex-Im,” as the bank is familiarly called, is an 80-year-old federally chartered agency that offers loans, credit insurance and guarantees to help facilitate foreign purchases of goods manufactured in the United States.
No state benefits more from Ex-Im than Washington, where 40 percent of jobs are tied to international trade. According to The News Tribune’s Rob Hotakainen, of the $232 billion in financing the bank provided since 2007, nearly half – $111 billion – was lined up by Washington companies. Ex-Im supporters say thousands of jobs in this state would be lost if the bank’s charter is not renewed when it expires Sept. 30.
But a growing movement in Congress, primarily conservative members who see it as an example of government overreach, is trying to kill Ex-Im. That would be shortsighted, especially when it could mean that the U.S. would be ceding foreign business to Europe and China, whose export-import bank is four times bigger than ours.
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If Ex-Im isn’t able to help U.S. businesses export their products, other countries’ export-import banks will gladly pick up the slack to help their businesses grab U.S. market share.
The biggest beneficiary in this state of Ex-Im’s financing has been the Boeing Co., and it’s enabled foreign airlines to borrow money to buy the company’s jets. As Congressman Denny Heck put it, “Who’s going to finance Uganda purchasing a $300 million airplane?”
Ex-Im steps in where commercial banks fear to tread. Even with loans that appear to be risky, the bank’s default rate last year was 0.25 percent and less than 2 percent since its inception.
While some critics call Ex-Im “The Bank of Boeing,” it’s not just about big-ticket items like airplanes. In fact, 133 of the 183 exporters in Washington that use Ex-Im are small- and medium-sized businesses, mostly in manufacturing and agriculture, says the Association of Washington Business.
Ex-Im has been helpful to companies like Ste. Michelle in selling its wines abroad and Pexco, a 150-employee business in Fife that manufactures plastic traffic poles and sells them in 28 countries. For Pexco, Ex-Im is important because it provides federal insurance in case a foreign purchaser fails to pay up.
The members of Washington’s congressional delegation don’t see eye to eye on a lot of issues, but preserving Ex-Im is one of them. Congress should recognize the bank’s value in supporting U.S. businesses and reauthorize Ex-Im’s charter.