Ex-Im Bank Needs Strong and Supportive Leadership
The Aerospace Industries Association (AIA) on July 14 announced its opposition to the nomination of former Congressman Scott Garrett (R-N.J.) as Chairman and President of the U.S. Export Import Bank (Ex-Im). This decision was not made lightly and was the first-time AIA has opposed a Presidential nominee in recent memory. This is because AIA and its member companies at every tier of the aerospace supply chain support President Trump’s “Made in America” push and because Ex-Im plays an important role in accomplishing this goal.
Ex-Im supports all levels of American manufacturing either directly or by creating substantial aftermarket opportunities after an initial export takes place at no cost to the U.S. taxpayer. In the aerospace industry, where 56% of the value of exports come from the supply chain, Ex-Im helps support 2.4 million jobs. AIA believes that Ex-Im deserves a leader who is fully committed to the success of the Bank and will work to remove barriers to its full functionality so that U.S. companies can win against foreign competitors.
Since the reauthorization of Ex-Im in 2015, AIA has continually stressed the need to establish a quorum on the five member Ex-Im Board of Directors capable of reviewing and approving support for transactions worth more than $10 million. Ex-Im’s quorum is extremely important to the American aerospace industry, as most of our Bank-supported transactions are worth more than $10 million.
While we initially met the announcement of Board member nominees with great optimism, Mr. Garrett’s track record of opposing the Bank and the extensive authorities he would have to frustrate the Bank’s mission as Chairman led directly to our decision to oppose him. Mr. Garrett’s confirmation as Board Chairman would result in an Ex-Im that fails to fulfill the mission of supporting the U.S. economy.
AIA agrees with Secretary of Commerce Wilbur Ross, who recently said that Ex-Im is part of the U.S. Government’s “trade toolbox” to boost exports. Ex-Im has a long history of benefitting American companies while returning funds to the U.S Treasury after paying for its own operations. However, opponents of Ex-Im argue it is unnecessary and exports will continue without the Bank. They are right in one regard – trade will continue without Ex-Im. The problem is that without Ex-Im, the exports will come from foreign competitors of U.S. companies.
These opponents rarely mention that there are currently 96 foreign government-backed export credit agencies which allow foreign competitors to aggressively pursue export sales to potential U.S. customers in the international market. Without Ex-Im, American companies will not compete on a level playing field and our international competitors will have the upper hand. In fact, right now there are approximately $30 billion of potential U.S. exports waiting on Ex-Im approved financing. Unfortunately the lack of a quorum on the Ex-Im Board is holding these deals in limbo. These exports not only would support existing U.S. manufacturing jobs, but could also lead to the creation of new jobs.
Some opponents also argue that Ex-Im needs reform, but fail to mention the 2015 Ex-Im reauthorization included reforms to tighten requirements on fraud control, establish an ethics office at Ex-Im, and assign a Chief Risk Officer to manage exposure so the bank does not incur costs to the taxpayers. These policies would improve Ex-Im’s effectiveness and transparency, but cannot be implemented in the absence of a quorum.
Aerospace companies — small, medium and large — need a fully functional Ex-Im that will bolster American export sales opportunities that lead to job growth here at home. Our companies, workforce and nation deserve an Ex-Im Bank with leaders who are fully committed to the success of Ex-Im and to removing any barriers to its full functionality.