Digital Edition

January 20 2020

Issue link: https://jocdigital.uberflip.com/i/1198854

Contents of this Issue

Navigation

Page 31 of 47

32 The Journal of Commerce | Januar y 20 2020 www.joc.com Government Overseas, told The Journal of Com- merce. Poisler added that he hopes the lengthy authorization period will boost confidence in the bank. EXIM, which provides loans to foreign companies purchasing US-made goods as well as financing and insurance on receivables for US exporters, had been without a full quorum from July 2015 until the confirmation of three board members in May 2019, leaving it unable to approve financing of more than $10 million. As a result, owners of major industrial projects say they had no choice but to seek financ- ing from other countries' export credit agencies, which then required those project owners to follow local content requirements, procuring services from the export credit agen- cies' preferred (non-US) vendors. The long slump sent ripples throughout US project cargo supply chains, which had previously utilized direct loans from the bank to move multibillion-dollar global industrial projects forward, prompt- ing lawmakers to include a provision in the new appropriations act that describes alternative procedures if the bank lacks a quorum. THE EXPORT-IMPORT BANK of the United States (EXIM) has cleared a significant hurdle, as the 2020 feder- al appropriations bill signed into law Dec. 20 reauthorizes the bank and extends its authorization period to seven years, ensuring that wrangling over funding will not be necessary again until 2026. "We had hoped and pushed for 10 [years], but we are very pleased that we got seven," Marco Poisler, chair- man of the Exporters Competitive Maritime Council and COO of global energy and capital projects at UTC Per the bank's reauthorization, if EXIM has an insufficient number of directors to constitute a quorum for 120 consecutive days, temporary board members will fill the gaps. The temporary board members will include the US trade representative, the secretary of the treasury, and the secretary of commerce. There is a 2026 sunset clause for this provision. "We're very pleased that some of the obstacles we've had in the past couple of years have been resolved," said Poisler. Chinese competition The appropriations act directly addresses competition with China, a focal point for supporters of the bank, who have argued that China's aggressive financing in developing markets has afforded it outsized global influence. The appropriations act calls for the establishment of a "Program on China and Transformational Exports" to encourage the creation of loans, guarantees, and insurance that "are fully competitive with rates, terms, and other conditions established by the People's Republic of China." It also lays out requirements for directing loans or guarantees greater than $25 million to the Chinese government. Before such a loan can be authorized, the bank must pres- ent to Congressional committees a report assessing any potential risks to the United States. Both provisions concerning China have expirations dates of 2026 or sooner. The act also says the EXIM Bank should set a goal to put aside at least 5 percent of its annual funds to finance renewable energy, energy efficiency, and energy storage tech- nology exports. JOC email: catherine.dorrough@gmail.com With a full quorum and a fresh seven-year reauthorization, US EXIM can finally get back to its mission of financing US exports. Shutterstock.com International | Washington | Customs | Security | Regulation Lucky seven New US EXIM Bank reauthorization closes quorum loophole By Catherine Dorrough "We had hoped and pushed for 10 [years], but we are very pleased that we got seven."

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - January 20 2020