Loss of 'Ex-Im' puts Illinois jobs, economy at risk

As we head into the midterm elections, you won't hear any politicians touting their plans to kill American jobs or making stump speeches arguing that foreign companies should have an easier time competing against U.S. companies. But that's what some in Congress are pushing for as they propose to kill the Export-Import Bank, a government agency that supports American exports by financing sales overseas when commercial credit isn't available.

Ex-Im is now threatened with cancellation for the first time in its eight-decade history, despite its track record of creating jobs and returning money to the U.S. Treasury. To their credit, nearly all of Illinois' representatives and senators - Democrats and Republicans - support Ex-Im, and for good reason. Exports support more than a quarter of our manufacturing jobs, which employ one out of every 10 workers in the state.

Ex-Im has helped Illinois companies finance roughly $5 billion in exports since 2010, with $1 billion in exports already this year. Illinois companies of all sizes have used Ex-Im, from small mom-and-pop shops to major employers like Boeing and Caterpillar. Each Illinois-made product sold overseas not only supports thousands of Illinois jobs at those companies, but also creates hundreds more at small independent suppliers in our state.

Small business exporters use Ex-Im financing to create new revenue streams and diversify their customer base, strengthening them against changes in the market.

For example, Ex-Im has helped St. Charles manufacturer Bison Gear and Engineering compete on a global scale, growing its export business selling electric motors and gear motor drives to 32 customers in 17 countries - and counting.

Schaumburg's Quality Float Works (QFW) is working with Ex-Im to secure an export for the largest order in its history, which would enable it to grow its workforce by 20 percent and employ dozens more workers at QFW's local suppliers. But without Ex-Im, they'll likely lose the deal, along with the potential jobs for Illinois workers.

What's more, supporting these exports doesn't cost taxpayers a dime: Ex-Im funds its operations entirely through fees charged to users. It follows stringent lending rules and submits quarterly reports to Congress on its default rate, which stands at less than one-quarter of one percent (significantly better than private commercial banks). Over the last five years, Ex-Im has returned $2 billion to the Treasury after covering all its costs.

Despite Ex-Im's proven record creating jobs and reducing deficits, its opponents dismiss it as corporate welfare supposedly standing in the way of a truly free market. Yet 90 percent of Ex-Im transactions benefit small businesses, not corporate behemoths. Moreover, getting rid of the Ex-Im Bank would be the real distortion, skewing international trade in favor of foreign companies that receive ample support - including export credit assistance - from their own governments.

As any economist can tell you, U.S. export credit pales in comparison to what countries like France, Germany, Brazil, China provide to give their own companies a leg-up in the global market. Korea, for example, offers its own exporters 10 times as much government credit as the U.S., measured as a share of GDP.

Ex-Im doesn't distort the global market; it allows U.S. companies to compete on the value of their goods and services, rather than financing mechanisms.

Until our trading partners agree to drop their own export credit programs, we shouldn't get rid of ours. Doing so would amount to unilateral disarmament of U.S. trade policy, effectively outsourcing hundreds of thousands of American jobs to countries that have no intent of ending support for their domestic industries.

In fact, ending Ex-Im would actually punish companies that keep production and jobs in this country, rather than moving to another country that would provide export credit assistance. At a time when Illinois is fighting for every last job, the last thing we need is for Congress to green-light the outsourcing of American manufacturing.

Illinois' leaders in Congress deserve praise for standing up for an agency that is supporting our economic recovery and lowering our federal deficit. As the end-of-September deadline approaches to reauthorize the bank, we're counting on them to continue to fight for the interests of Illinois manufacturers by supporting Ex-Im reauthorization.

Mark Denzler is the Vice President and COO of the Illinois Manufacturers' Association. He was assisted in producing this commentary by Ron Bullock, chairman of Bison Gear & Engineering in St. Charles, and Jason Speer, president of Quality Float Works in Schaumburg.