Ex-Im Bank Damages US Industry by Boosting Foreign Competitors, Says Cato Analyst
The Export-Import (Ex-Im) Bank facilitates increased U.S. exports, but simultaneously damages U.S. industry by allowing foreign companies access to U.S. products on more favorable terms than domestic companies can get, said CATO Institute director of Herbert A. Stiefel Center for…
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Trade Policy Studies Dan Ikenson in a June 19 op-ed in The Hill. The credit agency provides financing for foreign companies to buy exported U.S. products. But that financing goes to competitors of U.S. companies, such as Air India and the mining company Cliffs Natural Resources, and U.S. financial institutions are unable to offer the same terms to domestic industry. Therefore, U.S. industry often suffers from growth of foreign competitor industry, said Ikenson. “This adverse downstream effect is not exceptional. It is the rule. Consider that Ex-Im subsidized $168 billion of exports sales between 2007 and 2013, through loans, loan guarantees, and the provision of insurance and working capital,” said Ikenson. “Nearly two-thirds ($107 billion) of those expenditures were for the purpose of facilitating exports of manufactured products.” The House Financial Services Committee will hold a June 25 hearing on the bank's reauthorization.