Morgan: Exporting Challenges (Journal Record Monthly Column - August 2014)

American exporters face an uphill battle when trying to sell their goods overseas. Many of their foreign competitors benefit from either significant subsidies or, in some cases, direct ownership and financial interest by their governments. Leveling the playing field isn’t easy, and will be harder if the Export-Import, or Ex-Im, Bank is not reauthorized by Congress by the end of September. It provides loan guarantees and credit assistance to exporters, including nearly 100 Oklahoma companies in 2013 alone, allowing them to compete against foreign-subsidized companies.

These aren’t just major corporations, either. Two-thirds of the Oklahoma companies receiving help from the Ex-Im Bank are small businesses. Plus there are subcontractors and vendors that depend on exporters large and small. Any action making it harder to export American goods would ripple through Oklahoma’s economy.

Why would an entity that supported more than $37 billion in exports and 205,000 jobs last year alone be in jeopardy? One argument is that the Ex-Im Bank is government interference in the free market. However, the whole point of the Ex-Im Bank is to fill a gap where free markets don’t exist. It lets American companies compete based on the quality of their products rather than face prices distorted by government intrusion.

Others argue that the Ex-Im Bank helps foreign companies by allowing American manufacturers to sell them cheaper components, which allow the foreign company to compete with American ones. This fails, however, to take into account that 59 other countries have direct or indirect financing for their companies. Ending Ex-Im won’t stop foreign competition.

The final important point is that the Ex-Im Bank does all this with no cost to the taxpayer. In fact, the Ex-Im Bank contributed a billion dollars to the U.S. Treasury last year.

If America is to continue its manufacturing renaissance, the Ex-Im Bank must be reauthorized. Eliminating it now would only serve to tip the balance away from American companies, costing us jobs and sending the economy down the path towards recession and increased unemployment once again. Tell your elected officials that Congress needs to act soon to keep the Ex-Im Bank open or else other countries will pick up the slack and the only losers will be American manufacturers and the jobs they provide.

Fred Morgan is president and CEO of The State Chamber of Oklahoma.