about the fate of Ex-Im because all of the world’s major exporting nations have their own government export credit programs—60 nations in all. “If Congress eliminates Ex-Im, the United States will be the only country without this important competitive tool,” Keating said. “U.S. exporters will lose billions of dollars of international business annually, and thousands of American jobs will be in jeopardy. Unilateral disarmament is not a winning strategy for our country.” So why are some members of Congress opposed to Ex-Im? The reasons most often heard are that Ex-Im exists for the benefit of giant corporations that do not need such 18 Frontiers June 2014 airlines have been raising money in the U.S. bond market and enjoying some of the lowest financing costs in the world.” Titus Naikuni, chief executive of Kenya Airways, spoke of the importance of Ex-Im and of longstanding relationships when doing large financial transactions. “We’ve understood them (Ex-Im) and they’ve understood us. We’ve been able to have a smooth flow. The way that Ex-Im works is very professional.” Boeing Capital has supported Kenya’s transactions with the bank for more than 10 years—transactions that have enabled the airline to secure financing for 737s, 767s, 777s and now the 787. “It was a win for everyone concerned,” Allen, BCC’s president, said of the bank financing that allowed Kenya Airways to fly home to Nairobi its first 787 Dreamliner. “The airline got a new, moneymaking asset, Kenya got vital new commercial links to global markets, and Boeing closed a deal with a valued customer. And Ex-Im booked with the U.S. Treasury the significant fees Kenya Airways paid for its loan guarantees.” n tim.d.neale@boeing.com assistance; that Ex-Im loan guarantees distort commercial credit markets; that the bank’s portfolio of loans represents a risk that taxpayers should not have to bear; and the bank is putting U.S. airlines at a competitive disadvantage against foreign carriers. Keating addressed those concerns: || Almost 90 percent of Ex-Im’s transactions last year involved small business, he said. What’s more, the thousands of small U.S. businesses that supply parts and services to large exporters such as Boeing, Caterpillar and GE benefit from Ex-Im just as much as the big players. || As for allegations of market distortion, the bank’s charter specifically mandates that it not compete with commercial lenders but complement private-sector lending, Keating said. “Ex-Im steps in when commercial loans are too costly or in some cases unavailable.” || The bank’s default rate is less than 2 percent over its 80-year history, and last year its default rate was a miniscule one-quarter of 1 percent, according to Keating. “Ex-Im does an excellent job analyzing risk—arguably better than many commercial lenders.” || There is no evidence that Ex-Im disadvantages U.S. airlines against foreign carriers, Keating said. “The cost of government export credit financing has doubled and is now on par with commercial rates. In addition, U.S. 2% Over its 80-year history, Ex-Im Bank has had a DEFAULT RATE of less than 2 percent. 90% Almost 90 percent of Ex-Im’s transactions in 2013 involved SMALL BUSINESSES. “The way that Ex-Im works is very professional.” — Titus Naikuni, Kenya Airways CEO PHOTO: GAIL HANUSA/BOEING Source: Export-Import Bank of the U.S. To learn more about the Export-Import Bank visit www.exim.gov. You also will find a website dedicated to this issue at www.nam.org.
Frontiers June 2014 Issue
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