After the financial collapse of 2008, Wisconsin’s economy suffered along with the rest of the country. However, our relative strength in advanced manufacturing means we are well-positioned to take a lead in the present economic recovery. In order to do that, we need to reach a big untapped market for local manufacturers: the rest of the world.
Exports are a proven method for growing local businesses and creating good jobs. In the past seven years, Wisconsin manufacturing exports grew three times as fast as the rest of the economy. These exports aren’t just heavy equipment, but also include food, paper, and vehicles.
Private companies invest heavily and take risks to develop export markets, and this work is supported by government agencies at all levels. The Wisconsin Economic Development Corporation organizes trade ventures to help business-owners make connections in new markets. The Wisconsin Manufacturing Extension Partnership hosts the ExportTech workshop series that walks business-owners through the process of creating and implementing export plans. But knowledge only goes so far. Often, the lack of available financing is where export deals fall apart.
At the federal level, one of the most effective tools to promote exports is the Export-Import Bank. This institution exists to help finance private international trade deals. According to reporting from the Wall Street Journal, in 2013 the “Ex-Im Bank” as it is known authorized $27 billion to facilitate $37.4 billion in U.S. export sales, and returned more than $1 billion in profits (from interest and fees) to the U.S. Treasury. These funds supported 200,000 jobs at 3,400 employers around the country. This federal agency is growing the economy and turning a profit!
Despite that, some members in the House of Representatives want to put the Ex-Im Bank out of business. Critics are not claiming the bank is ineffective. Rather, many, such as Rep. Kevin McCarthy, soon to be House Majority Leader, feel the function of financing business deals should be left to the private sector. In a recent interview, he said the Ex-Im Bank is “something government does not have to be involved in.”
There are even some who claim that the benefit of the bank’s lending only goes to big corporations, and therefore amounts to “corporate welfare.” But don’t we all benefit when a local employer like Appvion leverages Ex-Im Bank support, and their growth brings more jobs to the Fox Cities?
Supporters of the bank point out that many other countries offer similar support for their exporters, and to eliminate America’s Ex-Im Bank would put American companies at a disadvantage. Our competitors like France, Korea, China, Germany, and Brazil pump subsidies into their exporting companies, because they know exporting leads to economic strength.
Congress has the responsibility to reauthorize the Ex-Im Bank before its charter expires on September 30. If they do not, this important part of our economic recovery could be shut down, and exporters could be left scrambling to find financing for their trade deals.
Removal of a key piece of support for exporters could significantly constrain any economic recovery. By tapping into consumer and business markets abroad, American companies can continue to grow their revenue and add good, family-supporting jobs. Reauthorization of the Export-Import Bank will ensure that exports will flow out and much-needed revenue will flow back in to American employers and workers.