America needs the Export-Import bank and it should be reauthorized quickly
Swift reauthorization would create thousands of U.S. jobs
July 9, 2014 12:00 AM
By DANNY RODERICK
The global marketplace is not a level playing field.
Thousands of American manufacturing jobs hang in the balance when U.S. companies — large and small — seek to do business internationally against competitors who are subsidized by their governments.
That’s why the Export-Import Bank is essential for American business.
The Export-Import Bank is the export credit agency of the United States. Since it was established in 1934, the Ex-Im has helped American companies compete with government-supported competitors overseas on the basis of price, performance and service.
Throughout its history, the Ex-Im has financed global projects that have created hundreds of thousands of U.S. jobs. Beyond that, Ex-Im returned over $1 billion to the U.S. Treasury in 2013 alone, a return on investment unsurpassed in any federal financing program.
However, the Ex-Im Bank’s authorization expires in September and requires congressional renewal.
At Westinghouse, the need for Ex-Im reauthorization is real to thousands of American workers. Four Westinghouse AP1000 nuclear power plants now under construction outside of the United States are creating more than 20,000 American jobs in no less than 20 states, a number that will surely increase as we pursue other nuclear plant projects in Brazil, the United Kingdom, Bulgaria, Poland and Asia. This global market is valued in excess of $740 billion over the next decade, according to the U.S. Department of Commerce.
Like other U.S.-based companies, Westinghouse is the world leader in its technology. Nonetheless, without Ex-Im financing in emerging economies around the world, we would be at a severe competitive disadvantage.
Why? Because Westinghouse and the U.S. nuclear power industry compete in the world of multi-billion-dollar infrastructure projects and in an industry where most of our competitors are owned or subsidized by their governments. Nations such as Russia, the Republic of Korea and France provide their national nuclear energy suppliers with multiple forms of support, including strong trade finance.
To put this in perspective, the Organization for Economic Cooperation and Development reports that 60 foreign export banks worldwide have extended more than $1 trillion in trade finance in recent years. This dwarfs the U.S. Ex-Im Bank, which provided less than 4 percent of the global total.
Failure to reauthorize the Ex-Im Bank, therefore, would be unilateral U.S. trade disarmament. Without it, companies like Westinghouse would not be able to compete against our government-subsidized competitors for multi-billion-dollar projects that create hundreds of thousands of well-paying U.S. jobs.
It’s important to distinguish between the various types of financing required to underwrite a major capital project, such as a nuclear power plant, in many countries around the world. Commercial banks certainly play a significant role in such projects and assume the safest, secured positions in the financing package. But the construction of a nuclear plant is unlike building a house, so it’s understandable that most commercial banks have little or no experience in our industry. By their nature, they are also unconcerned with the strategic geopolitical priority of reducing global dependence on foreign sources of oil and reducing global climate change.
The Ex-Im bank fills the gaps, offering loans, loan guarantees and insurance that leverage private finance in pursuit of U.S. commercial and strategic interests.
The Nuclear Energy Institute and 15 other U.S. industry and business organizations, including Westinghouse, have called on Congress to reauthorize without delay funding for the Ex-Im Bank before its current authorization expires in September.
Losing the Ex-Im bank would cost thousands of U.S. jobs in the short term. Long-term, the economic consequences would be far greater.
Danny Roderick is the president and CEO of Westinghouse Electric Co., headquartered in Cranberry.
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