Ex-Im Bank Round-up
The Export-Import Bank of the U.S. (Ex-Im Bank) has had a very busy month. They recently reported increased finance authorizations for U.S. exporters and an important benchmark in their Global Access for Small Business program, and also recently released a report outlining their global competitiveness.
For the first seven months in FY 2011, Ex-Im Bank authorized $14.8 billion in export financing, a slight increase over the same time last year. Long-term loan guarantees have also increased nearly 34 percent to $7.6 billion; medium-term guarantees were up about 27 percent to almost $612 million; and working capital guarantees increased almost 12 percent to $834 million.
This underscores the recent numbers released from the Department of Commerce’s Bureau of Economic Analysis (BEA) showing April’s exports of U.S. goods and services totaled $175.6 billion—the largest monthly total ever recorded. The growth amounts to a 15.9 percent increase over the 2010 April export total.
Global Access Program
Ex-Im Bank recently announced that their Global Access for Small Business program had met an important benchmark: helping 1,000 first-time small-business owners with Ex-Im’s finanice products. Although providing service and products to far more than 1,000 small businesses overall, Ex-Im Bank’s Global Access Program was launched in Jan. 2011 as part of President Barack Obama’s National Export Initiative (NEI).
This new benchmark brings the Global Access program closer to its goal of adding 5,000 new small-business customers by 2015, and is another positive step toward the NEI’s goal of doubling U.S. exports by 2015. Since the Global Access program began, there have been 16 public forums across the country which have attracted over 2,000 small-business owners.
On June 15, Ex-Im Bank released their 2011 Competitiveness Report which includes an in-depth look at the expansive export credit practices being used by emerging markets, such as Brazil, India, and China.
In his comments responding to the study, Ex-Im Bank Chairman Fred P. Hochberg stated that “… the rise of these emerging economies, and their growing influence in export markets, also means the rules of the game have changed … foreign state-owned enterprises and state-owned banks are playing a growing, more influential role in the global economy. When we look at export financing, China, India and Brazil provide more support to their exporters than the G7 nations [Canada, France, Germany, Italy, Japan, the UK, and the U.S.] combined. And this trend has hit a tipping point.”
Hochberg went on to state that, “in order for the nation to lead the world in exports, the U.S. must address market distortions, find additional ways to capitalize on global market opportunities, and tackle domestic issues that hinder our global competitiveness.” His comments underscored the need for the U.S. to utilize export financing, trade policy and international enforcement mechanisms to offset such market distortions.
Among the key findings of Ex-Im’s Competitiveness Report:
Although Ex-Im Bank programs are competitive with those of its G-7 counterparts, innovative, unregulated programs as well as new programs in the field now represent a significant – if not majority share – of export credit financing.
While most export credit activities of emerging markets China, India and Brazil operate similar to Ex-Im Bank, some—namely in China—operate operate with a financial edge over standard export financing programs.
China and its ECAs have shown the most dramatic increase in terms of activity levels, and it operates under its own guidelines for export credits.
China works with myriad financial institutions doing vast amounts of short-term and medium- and long-term export finance (MLT) – including massive amounts directly to exporters and multi-billion-dollar concessional activity. In total, institutions’ activity could total over $100 billion a year.
Ex Im Bank is currently in the middle of their reauthorization process as well. Please click here to learn more.