THE AFRICA BAZAAR Staff Writer
December 7, 2015
The United States Export Import Bank is open for business once again after five months of waiting for reapproval from the U.S. Congress.
The news was announced late Friday by EXIM Bank Chairman and President, Fred Hochberg, after President Obama signed the “Fixing America’s Surface Transportation Act,” law, which include budgetary resources and funding that reauthorized the reopening of Export-Import Bank through September 30, 2019.
“Beginning today, EXIM will be able to restart the work needed to meet its mission of supporting American jobs and equipping American businesses with the tools necessary to complete for global sales… All of us at EXIM are ready to receive application for new transactions,” Mr. Hochberg wrote in a letter addressed to customers and stakeholders.
The news followed several months of negotiations and political wranglings among members of U.S. Congressional caucus and Senate which resulted in the five-month lapse of the EXIM Bank operation.
The bill, H.R. 22, which was overwhelmingly passed in both the Senate and the House of Representatives in bipartisan votes, will allow the 81-year old independent federal agency to start providing commercial capital and loan guarantees to the private sector to allow U.S. companies to compete competitively for businesses abroad.
Following the Congress’ approval, President Obama in a statement said that although “the bill is not perfect, it is a commonsense compromise, and an important first step in the right direction. I look forward to signing this bill right away so that we can put Americans to work, rebuilding our crumbling roads, bridges and transit systems, reauthorize the Export-Import Bank that helps our companies compete around the world, and give local and state governments and employers the certainty they need to invest and hire for the long term.”
Two major industry business leaders from the private sector, Boeing and General Electric – who have campaigned vigorously and fiercely for the reauthorization of the EXIM Bank issued statements, respectively, applauding the final resolution.
Boeing President and CEO Dennis Muilenburg said “By reopening the Export-Import Bank, Congress has taken strong action enabling American exporters and the skilled workers they employ to compete successfully in tough global market…including the 1.5 million workers at nearly 15,000 US companies that help Boeing design, make and support America’s aerospace exports.”
GE Chairman and CEO Jeff Immelt said “Congress did the right thing when it voted to reauthorize the U.S. Export Import Bank. On behalf of our employees and suppliers across the country, we applaud the leaders in both the house and senate who made it possible. It is excellent news for workers and businesses large and small who can now confidently compete and win deals globally.”
Mr. Hochberg said he expects the Bank to be operational once again on Tuesday, Dec. 8, but cautioned that there may be some delays to quickly resuming operations given the five months in which the Bank was inactive and the Bank is still awaiting the Senate confirmation of the quorum Board of Director its needs to approve transaction that are above $10 million US dollar.
“We expect online application systems and exim.gov to be fully operational no later than Tuesday Dec. 8. In addition, while we are accepting and processing applications for all levels of financing, please keep in mind that all transaction totaling more than $10m require approval by EXIM’s Board of Directors. Those transaction will need to await Senate confirmation of members sufficient to reconstitute a quorum.”
The Bank is critical to the U.S.’s export business. In 2015, the bank approved $12.5 billion for business. American manufacturers like GE, Boeing and Caterpillar, depend upon it to compete in the global marketplace, where majority of the buyers are foreign companies.
These two industry giants, and Caterpillar were among several businesses that have lost pending contracts with businesses abroad after Congress allowed the Bank to lapse since June 30.
GE threatened to move some of its business abroad and signed an export finance with Britain worth $12 billion.
Since it ceased operation, some African companies have looked elsewhere for support from other export credit agencies, including in Canada. Whether or not those contracts under negotiation will be revived are to be seen.
American exports contribute to the overall economy and export focused businesses bring a host of benefits to their communities and local economies, including generally paying higher wages to their employees than non-export businesses.
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