The global economy remains soft, but consumers across the world continue to purchase goods and services from Idaho manufacturers. Newly released figures show that in 2014, local firms shipped $5.1 billion in merchandise to foreign markets. That’s one of the highest annual totals on record.
Unfortunately, a critical agency that has helped enable our state’s robust export base just closed its doors. The congressional charter for the Export-Import Bank just expired, even though it has helped Idaho’s business community establish a global footprint, creating local jobs and growing our economy.
Unless Congress acts quickly to reauthorize the bank’s charter, the local businesses that depend on it will suffer.
Founded in 1934, the Export-Import Bank of the United States — or Ex-Im — provides financing to foreign customers interested in buying American-made products and services. The bank’s loans allow companies abroad to afford our goods. The bank also provides insurance to American businesses to protect against losses driven by global markets.
Ex-Im remains vitally important for thousands of small and medium-sized businesses, including many right here in Idaho. In the past five years alone, the bank financed over $155 million in Idaho-based transactions.
Consider Pickett Equipment in Burley. The firm is small, with just 35 employees. But Pickett Equipment is a giant in the market for bean harvest equipment. And by ramping up sales to Mexico, India, and other developing countries high in bean production, the company hopes to double its exports by 2018.
But that depends on Ex-Im, since Pickett Equipment relies on the bank to insure its receivables from purchasers and to secure the short-term financing it provides to some foreign customers.
My company, Hess Pumice, has also seen the benefits of Ex-Im. We’ve been mining, processing and distributing pumice in Idaho for almost 60 years. And with the bank’s insurance, we’ve been expanding our business abroad. Our products are now distributed in 23 countries across six continents. Since 2009 alone, the bank has helped Hess Pumice generate more than $16 million in sales. That new revenue enabled us to hire more employees and further support the local economy.
Taxpayers also benefit from Ex-Im. Since 2009, the bank has generated about $2.7 billion in foreign loan repayments for the U.S. Treasury. This income stream helps reduce our national debt and shore up the federal budget.
Despite the bank’s obvious benefits, some critics want to keep it shut down. Sens. Jim Risch and Mike Crapo, along with Rep. Raul Labrador, are in this camp, contending that Ex-Im represents an unnecessary government intrusion into the private sector.
This is a serious mischaracterization of the bank’s function. It fuels — not hinders — free and open commerce. It’s an important source of financing for global consumers who otherwise might not be able to afford American goods.
What’s more, without Ex-Im , American firms will be put at a distinct disadvantage on the global stage. Nearly 60 other countries, including China, South Korea and Germany, have their own version of Ex-Im. Like the United States, these countries use bank financing to lure potential customers to their local industries. Without a financing organ of our own, American products and services will become much less appealing.
The Export-Import Bank is critical to job and business growth in Idaho. With its charter now expired, our representatives must work quickly to bring the bank — and all the Idaho jobs it supports — back to life.
Michael Hess is the CEO of Hess Pumice Products in Malad City.
Editor’s Note: There are discussions in Congress to attach Ex-Im reauthorization legislation to a highway bill soon to be considered.