Tuesday, April 17, 2012
Analyst in International Trade and Finance
The Export-Import Bank of the United States (Ex-Im Bank, EXIM Bank, or the Bank), an independent federal government agency, is the official export credit agency (ECA) of the United States. It helps finance U.S. exports of manufactured goods and services, with the objective of contributing to the employment of U.S. workers, primarily in circumstances when alternative financing is not available. The Ex-Im Bank also may assist U.S. exporters to meet foreign, officially sponsored, export credit competition. Its main programs are direct loans, loan guarantees, working capital guarantees, and export credit insurance. Ex-Im Bank transactions are backed by the full faith and credit of the U.S. government. The Ex-Im Bank is a participant in President Obama’s National Export Initiative (NEI), a plan to double exports by 2015 to support 2 million U.S. jobs.
The Bank operates under a renewable charter, the Export-Import Bank Act of 1945, as amended, and has been reauthorized through May 31, 2012 (P.L. 112-74). The charter requires that all of the Bank’s financing have a reasonable assurance of repayment and directs the Bank to supplement, and to not compete with, private capital.
In light of the international financial crisis, demand for Ex-Im Bank services has grown in recent years. In FY2011, the Bank approved more than 3,700 transactions of credit and insurance support, totaling about $33 billion—the highest level of authorizations in the history of the Bank. The Ex-Im Bank estimated that its credit and insurance activities supported about $41 billion in U.S. exports of goods and services, and were associated with 290,000 U.S. jobs, in FY2011.
The Ex-Im Bank has been “self-sustaining” for appropriations purposes since FY2008. It uses offsetting collections to cover its administrative expenses and program operations. Congress sets an upper limit on the level of the Bank’s financial activities as part of the annual appropriations process. For FY2012, Congress appropriated $4 million for the Ex-Im Bank’s Office of Inspector General (OIG), and authorized a limit of $58 million on the total amount that the Ex-Im Bank can spend on its credit and insurance programs and a limit of $89.9 million for the Bank’s administrative expenses (P.L. 112-74). For FY2013, the President requested an appropriation of $4.4 million for the OIG, a limit of $38 million on the Bank’s program activities, and a limit of $103.9 million for the Bank’s administrative expenses. Since 1990, the Ex-Im Bank has retuned to the U.S. Treasury $4.9 billion more than it received in appropriations.
The Organization for Economic Cooperation and Development (OECD) “Arrangement on Export Credits” sets forth export credit terms and conditions, including restrictions on tied aid, for the activities of the Ex-Im Bank and the ECAs of foreign countries that are OECD members. Other OECD agreements set forth sector-specific rules, guidelines on environmental procedures, and other terms and conditions.
The 112th Congress has introduced legislation to renew the Ex-Im Bank’s authority (H.R. 2072, S. 1547, S.Amdt. 1836, and H.R. 4302). Members of Congress may examine issues related to the Ex-Im Bank that center on the economic rationale for the Bank; the impact of the Bank on the federal budget and U.S. taxpayers; the Bank’s support for specific types of business or industries; the current balance between the Bank’s advancement of U.S. commercial interests and other U.S. policy goals; the competitive position of the Bank compared to foreign ECAs; and the Bank’s organizational structure.
Date of Report: April 3, 2012
Number of Pages: 27
Order Number: R42474
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