Reports in Reuters earlier this month said the U.S. Senate confirmed President Donald Trump’s picks to fill three vacancies on the EXIM Bank’s board, allowing the entity to regain the ability to approve of transactions above $10 million. The bank was unable to . do so because there were five spots vacant on its board; three are needed to be filled in order to allow it to approve such large deals, reports explained.
Kimberly Reed will be the new EXIM president and chairman, while Judith Pryor and former Alabama congressman Spencer Bachus were confirmed as board member. Reed and Pryor’s terms will expire in January, 2021, while Bachus’s will expire in January, 2023, reports said.
“Restoring the full functionality of the Export-Import Bank is critical to the equipment manufacturing industry and the American economy,” said AEM president Dennis Slater in a statement, who added that the appointments of Reed, Pryor and Bachus enable the bank “to reach a quorum and negotiate larger deals that benefit the thousands of U.S. businesses that rely on the bank.”
Reuters reported that some of the largest U.S. manufacturers, including General Electric Co and Boeing Co Caterpillar Inc., were unable to offer government-backed export financing to its customers across borders ordering high-value products like aircraft and large equipment.
According to EXIM Bank acting president Jeffrey Gerrish, the bank has an estimated $40 billion worth of export financing deals in the pipeline that it can now begin to fulfill as a result of the Senate’s vote, which, he said, “renew opportunities for U.S. exporters to compete on a level playing field in markets and industries where China and other nations are aggressively supporting their exporters.”
The Senate’s bipartisan vote reinstated the bank’s ability to facilitate trade financing for deals worth more than $10 billion, four years after Republicans began a battle to shutter the EXIM Bank altogether. They have dubbed the bank as a purveyor of “corporate welfare” and “crony capitalism,” Reuters reported.
And while the Senate’s vote allows EXIM to begin providing trade financing again, reports noted that republicans could halt the bank’s operations once again, as its charter must be renewed by the end of September.
Senate Republicans previously rejected President Trump’s first domination as EXIM Bank chair, Representative Scott Garrett from New Jersey, reports in The Hill said earlier this month. Opposition to the remaining three nominations was led by Pat Toomey of Pennsylvania, who reports said is likely to continue to oppose renewing the bank’s charter.
“EXIM has operated to benefit the wealthiest and the most politically connected businesses in America, as well as their overseas clients,” he said on the Senate floor earlier this month ahead of the confirmation vote, reports in Bloomberg said. “It’s no coincidence that EXIM has been nicknamed Boeing’s bank when EXIM financing was at its peak.”
But Senate Majority Leader Mitch McConnell said enabling EXIM to approve of such high-value deals allows the bank to “engage in the lending they’re designed to provide for American businesses trying to keep up around the world.”
“There is a clear ned for ECAs [export credit agencies] for transactions of all sizes, especially those above $10 million,” said JPMorgan global head of export finance and global trade executive for EMEA Jeremy Shaw in an earlier interview with Global Trade Review. “Not having U.S. EXIM operating at full capacity puts U.S. exporters at a disadvantage compared to those exporters who have a fully functioning ECA.”