Cantwell in Speech: Letting Ex-Im Bank Expire Could ‘Hobble’ U.S. Manufacturers
Cantwell calls on colleagues to reauthorize key export tool
WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA) called on Congress to reauthorize the Export-Import Bank or risk hurting American exporters and costing thousands of jobs.
“Without the Export-Import Bank, we are going to be hobbling businesses across the United States of America and not giving them these tools,” Cantwell said. “Let’s not hobble U.S. manufacturers. Let’s get the Export-Import Bank out of committee and reauthorized.”
The “Ex-Im Bank” is a financing tool that helps American companies sell their products or services to foreign customers. The Ex-Im Bank’s charter is set to expire in 100 days, and unless Congress acts, it will be forced to end its assistance to American companies. In 2013, the Ex-Im Bank supported $37 billion in export sales and 205,000 jobs, of which 85,000 are in Washington state.
“There has been a lot written in the last 24 and 48 hours about this,” Cantwell said. “There has been a lot of discussion about people who have previously supported the program – maybe voted for it five or six times – and now all of a sudden have either amnesia, or have forgotten what is so important about this program. I’m here this morning to talk about this because I believe it is so vital to the U.S. economy and to the economic opportunities and challenges we face.”
Cantwell pointed to Manhasset Specialty Company in Yakima, Washington, which sells music stands and uses Ex-Im services. The stands are especially popular in China. Cantwell said she is proud that the company has figured out how “to sell a U.S. manufactured product in China, and that they are continuing to compete with the Chinese every day and winning that battle.”
“With 95 percent of consumers outside of the United States of America, the global middle class is going to double in the next 20 years,” Cantwell said. “That means more people with more disposable income to buy products and to use services that are so critical. Take aviation, for example. Because there is a rising middle class around the globe, and a lot more people want to travel, 35,000 new airplanes are in demand. That's how many we're going to have to build over the next 20 years: 35,000 new airplanes.
“That could be really good news for the United States of America and U.S. manufacturing, because those are great middle-class manufacturing jobs. But guess what? Those jobs are not secure. The Brazilians want to build airplanes, the Europeans already build airplanes, the Chinese want to build airplanes; and they are all competing for that rising middle class market that is demanding new airplanes.”
Cantwell has led the charge on the bank’s reauthorization and been among its most vocal supporters. In 2012, Cantwell introduced a bipartisan amendment to reauthorize the Export-Import Bank, and joined local businesses in Spokane, Yakima, Moses Lake and Everett to call for reauthorization.
Below Below is a transcript of her remarks on the floor today. Video available here.
“Madam President, I come to the floor today to talk about the Export-Import Bank: the program that is a vital tool of U.S. manufacturers and small businesses across the United States of America, to help them grow jobs and gain access to international markets.
There has been a lot written in the last 24 and 48 hours about this, because there has been a lot of discussion about people who have previously supported the program – maybe voted for it five or six times – and now all of a sudden have either amnesia, or have forgotten what is so important about this program.
I'm here this morning to talk about this because I believe it is so vital to the U.S. economy and to the economic opportunities and challenges we face. The Export-Import Bank basically gives assistance in the forms of securitizing loans that are sought by the private sector when a U.S. company tries to sell a product overseas.
You can imagine that if you are a U.S. manufacturer – and you could be involved in lots of different things; in our state, there is everything from aviation, to grain silos, to music stands, and agricultural products – and you want to sell to Ethiopia, or to a South American or Asian country.
So this small business person in the state of Washington says okay, I have found a customer in one of those countries for my product, grain silos. I will just use that as an example because there is a company in our state that now sells grain silos to 82 different countries around the globe.
That customer in that country says, “Well, how am I going to finance this deal?” It's not exactly like the sophistication is present in every one of these developing countries. And yet, we want U.S. products to be sold into these developing countries. I guess we could sit back on our laurels and just think that it's all going to happen on its own and let the Europeans sell into that market, or let the Chinese sell products into the market.
Or we could hustle – which is what the United States of America does – and we can figure out a way to secure those deals when those customers have a challenge of financing within their country. Now, it doesn't mean that the Export-Import Bank finances all of those deals. It means that it provides, in a lot of cases, security so that when a private bank does finance the sale of that deal, there is certainty and predictability.
Now, why is that important? Well, as one vice president of a bank that operates in 19 different states and in the District of Columbia told us, “Most banks, even those as large as – in this case P.N.C. – can’t alone take risks for helping a U.S. company sell in countries with governments that may be less stable than the United States of America.”
It makes sense, right? Look at what we are seeing around the globe. We are seeing lots of change. You can't count on a deal and account for the capricious nature of governments. So if someone stiffs me in Pittsburgh, I will just go to a court in Pittsburgh and win a judgment against these individuals.
You can't practically expand that to a government in Africa or Asia. You can't go to a court system here in the United States and say hey, that government failed to pay on that particular customer deal that was enacted.
But you can with the help of the Export-Import Bank, secure those loans and make sure that payment is received. And that's why so many small businesses across the state of Washington like and have used this program in conjunction with the private banking industry.
For example, there is a company, Manhasset music stands. I love that company because it makes music stands – somewhat like this podium I am speaking in front of – that are used for the placement of music, and they sell all over the globe. In fact, China has some of their best customers. I love that there is a place in Yakima, Washington that is figuring out how to sell a U.S. manufactured product in China, and that they are continuing to compete with the Chinese every day and winning that battle.
I am so proud that that company uses the Export-Import Bank to reduce their risk to those customers, because those customers live in a place where the banking and security might not be there.
Now, why is this so important? Well, first of all, 95 percent of consumers in the world live outside of the United States of America. Unless we just want to sell to people in the United States of America, we better have a pretty good strategy of how we're going to sell to people outside the United States of America.
With 95 percent of consumers outside of the United States of America, the global middle class is going to double in the next 20 years. They are going to double. That means more people with more disposable income to buy products and to use services that are so critical.
Take aviation, for example. Because there is a rising middle class around the globe, and a lot more people want to travel, 35,000 new airplanes are in demand. That's how many we're going to have to build over the next 20 years: 35,000 new airplanes.
Well, that could be really good news for the United States of America and U.S. manufacturing, because those are great middle-class manufacturing jobs. But guess what? Those jobs are not secure. The Brazilians want to build airplanes, the Europeans already build airplanes, the Chinese want to build airplanes; and they are all competing for that rising middle class market that is demanding new airplanes.
They all want to get on the action of having manufacturing jobs in their state. So we need to make sure that we implement the Export-Import Bank, which is about to expire on September 30 of this year. Without the Export-Import Bank, we are going to be hobbling businesses across the United States of America and not giving them these tools.
The Export-Import Bank has created thousands of jobs in the United States of America, and it has supported $37 billion in exports, helped small businesses, and created jobs. It also helps us pay down the federal deficit. It has generated over $1.057 billion that was returned to the U.S. Treasury, so it has actually helped us pay down the federal debt.
So my colleagues – who are now all of a sudden either having amnesia about why they supported the Ex-Im Bank, or not coming forward to support it now – need to remember what a vital tool this is to the U.S. economy.
Madam President, I just want to close by saying other countries use these same financial tools. So a lot of my colleagues can see that other countries – for the same reason – when the marketplace doesn't provide a private-sector financial tool to securitize these products, it is important that the United States stay competitive with everybody chasing global market opportunities.
Let's not hobble U.S. Manufacturers. Let's get the Export-Import Bank out of committee and reauthorized. I thank the President, I yield the floor.”
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