Ex-Im Bank, Exporting Round-UpMay 1, 2012
U.S. exporting continues to garner attention inside the Beltway. Two developments of great interest to small- and mid-sized exporters: House Majority Leader Eric Cantor (R-Va.) and Minority Whip Steny Hoyer (D-Md.) are working on a deal to reauthorize U.S. Export-Import Bank (Ex-Im Bank); and the U.S. Small Business Administration (SBA) has opened its second-year grant process under the State Trade and Export Promotion (STEP) Program. Additionally, the U.S.-Colombia free trade agreement (FTA) is set to take effect May 15 which is likely to add to recent, positive data from the Department of Commerce which showed a decrease in the U.S. trade deficit for the month of February.
With the expiration of current authorization of Ex-Im Bank looming, Congress appears to be working toward a compromise to overcome some challenges posed by some of the more conservative lawmakers in the House who have questioned the need for the Ex-Im Bank and its mission of providing credit financing to U.S. exporters. NSBA and its international trade arm–the Small Business Exporters Association–has played an integral role on pushing both for a long-term reauthorization and an appropriate increase in the Bank’s lending authority.
The Bank has bipartisan support and last September the Senate Banking Committee unanimously passed a bill to renew the Bank’s charter to 2015 and raise its lending authority to $140 billion, from the current $100 billion level. Typically reauthorized every four years, the Bank is fast approaching its lending cap of $100 billion under its current authorization. At issue are the length of the Ex-Im’s charter and how high to raise the cap. Proposed lending limits have ranged from $113 billion to $140 billion, with talk of a compromise in the $130 billion range.
Leadership realizes the urgency and on the House side, Majority Leader Cantor and Minority Whip Hoyer have diligently been working together to strike a bipartisan deal that could garner enough votes to bypass some of the opposition raised. Aside from working out the particulars of length of time and amount of money in loan authority, they also are looking at including other needed reforms and accountability measures. It is expected that leadership will release compromise language in the coming days.
And then there is the issue of the legislative vehicle appropriate for moving Ex-Im reauthorization forward. Senate leaders oppose bringing it up as a stand-alone measure and would prefer it be attached to another bill—one that could easily pass the House. Cantor and Hoyer are discussing what it could be attached to that guarantees it would pass.
Please click here for more on NSBA and SBEA advocacy efforts on Ex-Im Bank.
Please click here for more on Ex-Im Bank.
The SBA is launching its second year of awarding funds to states through the STEP Program, which is a three-year program to disburse a total of $90 million to states and U.S. territories through 2013. The underlying goal is to increase the number of small businesses that are exporting and to increase the value of exports for those small businesses already exporting.
SBA Administrator Karen Mills announced SBA would begin accepting applications March 27 for the purposes of funding foreign trade missions, foreign market sales trips, subscriptions to services provided by the Department of Commerce, website translations fees, design of international marketing media, trade show exhibitions, participation in training workshops, and other critical export initiatives.
Small businesses that want to receive assistance under the STEP program should contact the organizations serving the states in which they are located.
For more information on the STEP program, please click here.
On April 15, U.S. Trade Representative Ron Kirk announced that the U.S. and Colombia will enter into their trade agreement on May 15. The FTA, which had taken several years to complete before Congress passed it last year, will remove duties on more than 80 percent of U.S. industrial and commercial exports, and about half of the duties on agriculture exports. With average tariffs on U.S. industrial exports ranging from 7.4 to 14.6 percent, this will substantially increase U.S. exports.
The International Trade Commission (ITC) has estimated that the tariff reductions in the agreement will expand exports of U.S. goods alone by more than $1.1 billion, supporting thousands of additional American jobs. The ITC also estimated that the agreement will increase U.S. GDP by $2.5 billion.
Please click here for more information.
U.S. Trade Deficit
The U.S. Department of Commerce’s Census Bureau and the Bureau of Economic Analysis (BEA) recently announced that exports in February 2012 increased to $181.2 billion from January’s total exports of $180.9 billion. Additionally, imports were down $6.3 billion from January which resulted in a notable decrease in the goods and services deficit from $52.5 billion in January, revised, to $46 billion in February.
Please click here for more details from BEA.