60 export credit reporting agencies operate worldwide. – progressive economy

THE Figures: Export credit, tied aid, & other export financing worldwide, 2013 –

World* ~$300 billion
U.S. Ex-Im Bank $14.5 billion

* Ex-Im Competitiveness Report 2013 $286 billion total for OECD people, China, India, Russia, and South america no estimates readily available for export credit reporting agencies in 25 smaller sized countries outdoors the OECD. Doesn’t include all types of public credit.

The Things They MEAN:

Presenting the 2013 Annual Report of Germany’s export legal action, Euler Hermes Gesellschaft, Economic Minister Sigmar Gabriel provides context for ProgressiveEconomy’s newest paper – a glance by Executive Director Erectile dysfunction Gresser in the Congressional debate on whether or not to ‘reauthorize’ the Export-Import Bank from the U . s . States. Here’s Herr Gabriel:

“Exporting strength and competitiveness are central support beams from the German economy and guarantors of high employment. Using its export credit plan, the us government offers an important contribution to safeguarding the prosperity of Germany as an origin of productivity and innovation.”

Gabriel’s Annual Report finds Hermes supplying 28 billion euros in loans, insurance, along with other types of export credit – roughly $35 billion – in 2013 to aid 866 transactions, including shipments of three petrochemical plants to Central Asia and also the Middle East, four aluminum moving mills to China, 96 airplanes, 12 luxury cruise ships, a wind farm in Ireland, and far else. Hermes consequently is just one of 60 public export credit reporting agencies all over the world – every major economy runs one, just like Sri Lanka, Ecuador, Slovenia, Luxembourg, and so forth more – which together provide $300 – $400 billion in export credit, tied aid, and investment financing each year. The Ex-Im Bank of China outdid Hermes with $45 billion Japan’s rather different program supported $2.1 billion in credit with $33 billion in tied aid and investment finance France’s program did $9.5 billion, and also the U.S. Ex-Im Bank did $14.5 billion.

Gabriel is definitely an advocate of higher worldwide rules to limit and regularize these agencies. (The OECD export-credit contracts, signing up to Europe, Japan, Canada, Australia, Korea, and so forth, will not pay for the companies operated by China, India, South america, along with other emerging economies). But he strictly rules out any German withdrawal in the field:

“The export guarantee plan of the us government is among the primary cornerstones within the promotion of trade through the Federal Republic of Germany.”

From this crowded and sophisticated backdrop, Congress is deciding the fate from the American Ex-Im Bank. An 80-year-old agency launched together with Franklin Roosevelt’s “Reciprocal Trade Contracts Act” in 1934, Ex-Im employs 412 people making 3,900 grants of loans, guarantees, and insurance this past year, for projects varying from the $400 textbook purchase to Nigeria to multibillion dollar transactions in power, aviation, and subway systems similar to (and frequently rivaling) the German program. Its charter must periodically be restored by Congress, using the next deadline arriving October. Whether it doesn’t happen, Ex-Im ceases operations.

Gresser’s paper observes this debate is actually less about whether an open role in export credit is a great factor by itself, than if the U.S. must give up while other nations continue their programs. This noted, it argues for renewal from the charter on four grounds, viewing Ex-Im as:

(a) A helpful support for export-based development in the immediate future, using the U.S. economy ongoing to tap foreign demand within the lengthy recovery in the 2008-2009 economic crisis

(b) An essential way to support large-scale sales of power equipment, urban infrastructure, aviation, along with other lengthy-term contracts for developing countries where private credit is less readily available, in addition to a method to help introduce new exporters and smaller sized companies to conveying – that’s, under Ex-Im’s charter, “filling market gaps the private sector isn’t willing or capable of meeting, for example volumes or period of repayment past the scope of business loan provider capacity and reasonable risks the private sector is not able to pay for.Inches

(c) An invaluable loan provider-of-last-resort tool to become stored in reserve in case of future economic crisis and sudden collapses of non-public credit and

(d) Dependent on legitimate national self-interest, making certain that in an enormous amount of $300 billion or even more in annual public credit, the companies operated by other governments don’t place U.S.-based companies as well as their workers at impossible disadvantages.

FURTHER Studying:

Gresser on Ex-Im Bank renewal: http://progressive-economy.globalworksfoundation.org/2014/09/16/reauthorize-the-export-import-bank

Data –

Ex-Im Bank’s policy and financial budget when compared with institutions abroad (see pp. 17 and 107 from the 2013 Competitiveness Report for figures): http://www.exim.gov/about/library/reports/competitivenessreports/

Considering tied aid, investment promotion, along with other types of export credit, the Competitiveness Report estimates $286 billion for that OECD countries’ agencies plus individuals operated by China, India, South america, and Russia. A fast table attracted in the report, restricted to a really strict meaning of export credit (i.e. without market window, untied loans, or investment support, and noting that Japan, Germany yet others provide a lot of their support during these forms) finds $149 billion worldwide in new medium- and lengthy-term credit from the 31 OECD people plus China, India, Russia, and South america in 2013. Ex-Im provides about 10 % of the total:

Total OECD + BRIC $149 billion
China $45.5 billion
Germany $22.6 billion
Korea $14.8 billion
U.S. Ex-Im Bank $14.5 billion = 10%
France $9.5 billion
Italia $8.6 billion
India $5.1 billion
Norway $4.2 billion
South america $4.1 billion
U.K. $3.9 billion
Denmark $3.8 billion
Netherlands $3.2 billion
Norwegian $2.8 billion
Japan $2.1 billion
Canada $1.9 billion

Perspectives –

Repetition. Denny Heck (D-WA) suggests a bigger credit authorization: http://dennyheck.house.gov/media-center/press-releases/democrat-proposes-lending-increase-for-export-import-bank-to-support-us

Repetition. Jeb Hensarling (R-Texas) proposes abolishing the financial institution: http://hensarling.house.gov/media-center/press-releases/a-time-for-selecting-the-primary-street-economy-versus-the-washington-crony

And Ex-Im President Fred Hochberg using the administration perspective: http://www.exim.gov/newsandevents/occasions/speechesandtestimony/2014-Export-Import-Bank-Annual-Conference.cfm

Comparisons –

Minister Gabriel introduces Germany’s annual export legal action report: http://www.agaportal.de/en/aga/downloads/jahresberichte.html

Japan’s Nippon Export and Investment Insurance Company: http://www.nexi.go.jp/topics/en/

China’s Export-Import Bank: http://british.eximbank.gov.cn/tm/en-TCN/index_617.html

Brazil’s BNDES: http://www.bndes.gov.br/SiteBNDES/bndes/bndes_en/Institucional/The_BNDES_Abroad/internationalization.html

And also the worldwide context –

The OECD’s export credit rules: http://ww w.oecd.org/tad/xcred/eca.htm

Resourse: http://progressive-economy.org/trade_details/60-export-credit-agencies-operate-worldwide/

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