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Thursday, October 13, 2011

Reauthorization of the Export-Import Bank: Issues and Policy Options for Congress

Shayerah Ilias
Analyst in International Trade and Finance

The Export-Import Bank (Ex-Im Bank, EXIM Bank, or the Bank), a self-sustaining agency, is the official U.S. export credit agency (ECA). It operates under a renewable charter, the Export-Import Bank Act of 1945, as amended. Ex-Im Bank’s most recent reauthorization (P.L. 109-438) was in 2006, when Congress extended the Bank’s authority through FY2011. Since its inception, Ex-Im Bank programs have supported more than $400 billion in U.S. exports.

The Bank’s charter expires on September 30, 2011. Potential issues for the 112th Congress as it examines reauthorization of Ex-Im Bank include the following: 

          The economic rationale for the Bank, including the role of the federal government in export promotion and finance;
          Specific Bank policies, such as those relating to content, shipping, economic and environmental impact analysis, and tied aid, including how these policies balance U.S. export and other policy interests;
          Statutory requirements directing Ex-Im Bank to support certain types of exports, such as exports of small businesses and “green” technology, including the tension that such requirements can create between desiring to support specific economic sectors and allowing Ex-Im Bank flexibility to fulfill its mission to support U.S. exports and jobs; and 
          International developments that may affect the Bank’s work, such as the growing role of emerging economies’ ECAs and the sufficiency of the Organization for Economic Cooperation and Development (OECD) Arrangement on Officially Supported Export Credits to “level the playing field” for U.S. exporters. 
Potential options for Congress include, but are not limited to, the following areas: 
          Structure of the Bank. Congress could maintain Ex-Im Bank as an independent agency, reorganize or privatize the functions of the Bank, or terminate the Bank. 
          Length of reauthorization. Congress could extend the Bank’s authority for a few years at a time (as in previous reauthorizations), for a longer period of time, or permanently reauthorize the Bank. 
          Bank’s policies. Congress could maintain the status quo, or revise the Bank’s policies, such as those related to the requirements and limitations on Ex-Im Bank’s credit and insurance activities. 
          International ECA context. Congress could seek to enhance international regulation of official export credit activity through the OECD or other mechanisms, or enhance Ex-Im Bank’s understanding of international export credit activity and trends. 

In the 112th Congress, the House and Senate have introduced bills, H.R. 2072 and S. 1547 respectively, to reauthorize Ex-Im Bank through FY2015. Among other provisions, both bills would raise the Bank’s aggregate loan, guarantee, and insurance authority; require the Bank to review its national content policy; and prohibit it from supporting transactions with entities unless they certify that they are not engaged in sanctionable activities with respect to Iran.

Date of Report: September 26, 2011
Number of Pages: 28
Order Number: R41829
Price: $29.95

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