When created in 1934 as an independent federal agency, the Export-Import Bank was, and still is, chartered to (a) provide guarantees of working capital to U.S. exporters, (b) make loans to foreign buyers of U.S.-made good and services and (c) provide insurance against foreign buyers' non-payment due to risks of political or commercial nature. Ex-Im Congressional reauthorization was delayed since 1 October as bank operations under Continuing Resolution are under scrutiny. At this time (late May), a Bush Administration recommended reduction to $541 million (down 25%) for non-administrative subsidy is still pending. Many think that to provide any level of taxpayer support to Ex-Im Bank is not justified, that Mr. Bush is making another wimpy compromise (like the steel tariff) and agree with General Accounting Office assessments that "Export promotion programs cannot produce a substantial change in the U.S. trade balance nor in the level of employment." Bank resources come from taxes; there is no evidence to suggest that the Ex-Im bureaucrats know better how to deploy these funds than a private bank, customers, investors or businesses from whom the taxes are taken or that subsidized export credit changes the net balance of imports and exports.

Ex-Im backed trade affects about 1% of U.S. exports and is shrinking-from $17 billion in 1999, to $15.5 B in 2000, to $12.5 B in 2001 and projected at $10.4 B this year. While Ex-Im claims it "provides services when the private sector is unwilling or unable," history shows that the bank provides financing in countries that do not have trouble obtaining credit and experiences a default rate of only 1.4%, better than most commercial banks. Just six countries received 43% and ten nations 59% of Ex-Im benefits as of 30 September 2001, of the total $53.498 B in outstanding commitments. It is unfortunate that among the forty-one heavily indebted poor nations of the world, export agencies account for a high proportion of their external debt.

What is most disturbing about Ex-Im Bank activities is the fact that ten U.S. big businesses are beneficiaries of 85.9% or $6.735 B of loan and guarantee commitments outstanding at the start of fiscal 2001, over 43% to benefit one company which views Ex-Im as the firm's personal banker. The Top-10 list and percentage of largess includes Boeing (43.1%), Bechtel International (18.8%), Varian Associates (8.6%), United Technologies (4.3%), Wilbros Engineers (2.5%), Halliburton (2.2%), Raytheon (1.9%), ENRON (1.7%), General Electric (1.6%) and Schlumberger (1.1%).

There are good reasons to question the need for and efficacy of Ex-Im Bank with its cost to American taxpayers. Other countries use credit agencies to support export trade (Japan 32%, France 18%, Germany 9%), but the U.S. and Canada among industrial nations use government assistance for only 2% of exports. Further, WTO (World Trade Organization) is critically evaluating this form of subsidy because it displaces private bank and insurance providers, shows bias toward large business and institutionalizes a policy tool of government to favored export sectors. Other than the obvious that exports support employment, there is zero evidence that it spurs job creation in any sector other than in government. Ex-Im points to 2,124 small business transactions performed in 2001 but only when studying the annual report is it clear that only four loans amounting to $13 M were placed for small business in 2001 and two loans for $7 M in 2000. Credit insurance for small businesses included 1,723 transactions last year for which the insured paid (subsidized) premiums. Yet another question about the need for Ex-Im Bank arises when considering the fact that forty unilateral U.S. trade sanctions on foreign countries since 1993 has cost American business about $18 B, which has destroyed many more export related jobs than Ex-Im claims to have created.

It is my suggestion that we all call our favorite politicians and tell them to retire the Export-Import Bank. Neither American taxpayers nor businesses need them.