Ex-Im Bank: Medium- and Long-Term Content Review
The Export Import Bank of the United States (Ex-Im) Reauthorization Act of 2012 requires the Bank to consider and report back to Congress on whether the Bank’s current domestic content policy for Medium- and Long-Term (MLT) transactions sufficiently and accurately captures the direct and indirect costs of goods and services exports. Given historical Congressional intent, Ex-Im Bank has created programs, policies, processes and practices that focus on the Bank’s U.S. employment impact. The content policy is the proxy/tool the Bank uses to connect its activity to jobs.
As part of the law, the Bank has been required by Congress to highlight the (i) obstacles/challenges exporters face in accessing Ex-Im support, (ii) competitive landscape, (iii) specific changes/flexibilities the Bank should consider, and (iv) if the changes were to be adopted, what would be the likely effect on U.S. employment and exports.
The Bank last made substantive policy changes to its MLT content policy in 1987; and in 2001, the Bank approved procedural changes to the MLT policy that introduced flexibility into the implementation process (aggregation and streamlined documentation). For most of the past 20 years, the exporting community has maintained that the content policy is the most important issue affecting Ex-Im’s competiveness and is now considered out of date with the ever growing globalization of the supply chain.
In order to capture and identify actions that could increase U.S. jobs associated with Ex-Im support, senior staff of the Ex-Im Bank’s Policy Analysis Division met with nine members of the Small Business Exporters Association (SBEA) on Feb. 20.
During the discussion, the small exporters addressed the content policy in ways that included expanding the utility of Ex-Im support to sectors/transactions that are not currently eligible for which there is a possibility to make policy changes that could realistically be expected to result in a significant increase in U.S. exports and jobs. They also mentioned ways to adjust the content policy that encourages an incentive for U.S. exporters to increase its use of small business sub-suppliers and facilitate small business activity.
The goal for developing answers to the Congressional mandated questions and meeting Ex-Im’s objectives is to match exporter concerns with the impact of potential changes that could make a measurable difference in U.S. employment levels. The Ex-Im Content Review has been developing the required information through a variety of sector explorations, focus groups and public comment.