CONSERVATIVE US lawmakers seek to
stop the reauthorisation of the Export-Import Bank in September, because it
usurps the role of the private sector, Reuters reports.
The controversy over the status of the US Export-Import Bank has been taken up by the House Financial Services Committee to decide whether the bank's charter will be renewed.
Ex-Im's lending increased 70 per cent between 2008 and 2010 as the bank joined other public sector export credit agencies around the globe to lend when commercial banks would not.
The US Export-Import Bank (Ex-Im), an 80-year-old federal agency, provides government-backed loans to foreign buyers, to assist them in purchasing US products, reports the Daily Caller, of Washington, DC.
This issue dates back to 2012, when the then-house majority leader, Republican Congressman Eric Cantor, blocked attempts by fellow Republicans to turn down the bank's reauthorisation request.
Committee chairman Texas Republican Congressman Jeb Hensarling opposed reauthorisation, saying Ex-Im's financing of Boeing and Caterpillar counts as market interference and corporate welfare.
But businesses support reauthorisation of the Ex-Im bank, calling the abolition of the bank, "Sunilateral trade disarmament". Among supporters are the Chamber of Commerce and the National Association of Manufacturers.
Reports of kickbacks and cronyism have heightened the controversy. Four Ex-Im officials have recently been removed after investigations revealed corruption.
In particular, Johnny Gutierrez, an Ex-Im official, accepted cash payments from a Florida-based company which exports construction materials to Latin America.
But Massachusetts Democratic Congressman Stephen Lynch warned: "We cannot exit the battlefield. This will drastically tip the balance in favour of foreign companies. No other country will voluntarily disarm."
Christine Harbin, the national issue campaign manager for Americans For Prosperity, has been at the forefront of the issue in recent months. "We have been leading a coalition of conservative organisations in opposing Ex-Im," Harbin told The Daily Caller.
Solid Republican has not yet been achieved, with 41 GOP men warning of the economic consequences of failing to renew Ex-Im's charter. Texas Gov Rick Perry also wrote urging reauthorisation.
While many big companies could likely organise financing elsewhere, albeit on less favourable terms, small firms with fewer options worry they might not be so lucky.
Global exports and trade finance have bounced and are at record highs, data from export insurance association Berne Union suggests public agencies, like the Ex-Im Bank, still provide much of the support, said Reuters.
About one-tenth of world trade is protected by policies provided by Berne Union members, both public and private. The private sector share of Berne Union-insured exports and investments shrank from about two-thirds in 2008 to just under half in 2013.
Banks, which are estimated to finance about one-third of global trade, are crimped by tighter financial regulation.
"In the wake of the crisis, banks are wary of longer-term commitments," said Peterson Institute for International Economics senior fellow Gary Hufbauer. "Those loans are hard to get outside of the official export credit agencies, like Ex-Im."
The controversy over the status of the US Export-Import Bank has been taken up by the House Financial Services Committee to decide whether the bank's charter will be renewed.
Ex-Im's lending increased 70 per cent between 2008 and 2010 as the bank joined other public sector export credit agencies around the globe to lend when commercial banks would not.
The US Export-Import Bank (Ex-Im), an 80-year-old federal agency, provides government-backed loans to foreign buyers, to assist them in purchasing US products, reports the Daily Caller, of Washington, DC.
This issue dates back to 2012, when the then-house majority leader, Republican Congressman Eric Cantor, blocked attempts by fellow Republicans to turn down the bank's reauthorisation request.
Committee chairman Texas Republican Congressman Jeb Hensarling opposed reauthorisation, saying Ex-Im's financing of Boeing and Caterpillar counts as market interference and corporate welfare.
But businesses support reauthorisation of the Ex-Im bank, calling the abolition of the bank, "Sunilateral trade disarmament". Among supporters are the Chamber of Commerce and the National Association of Manufacturers.
Reports of kickbacks and cronyism have heightened the controversy. Four Ex-Im officials have recently been removed after investigations revealed corruption.
In particular, Johnny Gutierrez, an Ex-Im official, accepted cash payments from a Florida-based company which exports construction materials to Latin America.
But Massachusetts Democratic Congressman Stephen Lynch warned: "We cannot exit the battlefield. This will drastically tip the balance in favour of foreign companies. No other country will voluntarily disarm."
Christine Harbin, the national issue campaign manager for Americans For Prosperity, has been at the forefront of the issue in recent months. "We have been leading a coalition of conservative organisations in opposing Ex-Im," Harbin told The Daily Caller.
Solid Republican has not yet been achieved, with 41 GOP men warning of the economic consequences of failing to renew Ex-Im's charter. Texas Gov Rick Perry also wrote urging reauthorisation.
While many big companies could likely organise financing elsewhere, albeit on less favourable terms, small firms with fewer options worry they might not be so lucky.
Global exports and trade finance have bounced and are at record highs, data from export insurance association Berne Union suggests public agencies, like the Ex-Im Bank, still provide much of the support, said Reuters.
About one-tenth of world trade is protected by policies provided by Berne Union members, both public and private. The private sector share of Berne Union-insured exports and investments shrank from about two-thirds in 2008 to just under half in 2013.
Banks, which are estimated to finance about one-third of global trade, are crimped by tighter financial regulation.
"In the wake of the crisis, banks are wary of longer-term commitments," said Peterson Institute for International Economics senior fellow Gary Hufbauer. "Those loans are hard to get outside of the official export credit agencies, like Ex-Im."
Source : HKSG.
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