Foreign Creditors are Already Benefitting from Ex-Im Closure

August 27, 2015

        Multiple supporters of the Export-Import Bank have continuously expressed fear regarding the implications likely to accompany the termination of the credit agency. Since the bank’s closure on June 30^th, these concerns have become a reality. The marketplace has recently shifted in favor of foreign export credit agencies. Competing nations are making moves to use the closure to their advantage.
            Canada, China, and the UK are greatly benefitting from the closure. “The world's 78 other official export credit agencies are continuing to do a brisk business — and they're not hesitating to leverage their financial advantages to take business from U.S. companies and workers when the opportunity arises,” said John Murphy, the Chamber of Commerce’s senior vice president for international policy. China has already taken several steps to keep their economic momentum moving forward. Along with devaluing the yuan, Beijing added $93 million into the Export-Import Bank of China and the China Development Bank. 
            Other countries, like Canada and the United Kingdom, have responded in a similar manner. For example, the Export Development Canada (EDC) has had 1,084 new financing deals in the last year, increasing their total financing by 17%. “For comparison, the Canadian economy is roughly one-tenth the size of that of the United States, but EDC provides approximately three times more support for Canadian exporters than Ex-Im does for U.S. exporters — or, proportionally, 30 times as much,.” stated John Murphy in a recent blog post. The UK Export Finance is also filling the void created by the bank’s closure, including potentially taking on U.S. clients. Recently, the Chairman of Boeing Co. said that the absence of the Export-Import Bank has led to considerations of moving portions of its business overseas -potentially to UK Export Finance.
            Many fear that these actions taken could leave U.S. exporters devastated. However, without the reauthorization of the Export-Import Bank, the trend of foreign creditors profiting from the closure will likely continue if the Export-Import Bank is not reauthorized this year. A Congressional vote is expected after August recess.


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