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.