U.S. Eximbank ramping up to help exports

“I don't really like to forecast, but I can tell you the first three months of our year, we were triple last year's level (of authorizations). We think that trend will continue,” Eximbank President Fred Hochberg told Reuters in an interview.

As other sources of export financing dried up during the global financial crisis, the Eximbank authorized a record US$21 billion in direct loans, credit guarantees and insurance to support U.S. exports in fiscal 2009, which ended Sep 30.

Then, it authorized a record US$9.9 billion in loans, guarantees and insurance in October through December, more than three times the US$3.28 billion it authorized in the first three months of fiscal 2009.

“I think there's going to be a greater role in the global economy (for export credit agencies) for the foreseeable future,” Hochberg said, noting other national export-import banks have ramped up their operations as well.

Those from the 30 member countries of the Organization for Economic Cooperation and Development, which includes the United States, major European countries and Japan, abide by a strict set of rules that prohibit subsidies.

But others, such as China's export-import bank, have much freer rein to operate, Hochberg said.

“The China eximbank is huge,” Hochberg said, adding he has seen reports that it provides as much as US$20 billion a month in financing for Chinese exporters.

Two weeks ago, President Barack Obama set what some believe is an unobtainable goal by pledging to double U.S. exports to more than US$3 trillion by the end of 2014.

But the sharp drop in U.S. exports over the past year, combined with a strong rebound in demand for U.S. goods in many markets, puts the target within reach, Hochberg said.

“It's not like we're at the high water mark and we've got to double that. Doubling it from where we are now, where exports are down 20 percent, seems very achievable,” he said.

Final figures due out on Wednesday are expected to show U.S. exports of goods and services fell to around US$1.54 trillion dollars in calendar year 2009, from a record US$1.83 trillion in 2008.

Countries such as Brazil, Mexico, Colombia, South Africa, Nigeria, Turkey, Vietnam, India and Indonesia are seen as particularly promising for U.S. exports.

“What unites them is they are emerging economies. Their GDP is growing and they also have great infrastructure needs. And some of the things that we provide and sell most successfully are in the area of infrastructure,” Hochberg said.

“From transportation to power generation to renewable energy to medical equipment, farm equipment, construction equipment. Those are the things that America uniquely produces and has a competitive advantage in,” Hochberg said.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos
 Respond to this email