October employment numbers show Utah’s economy still soaring—an unemployment rate of only 2.5 percent, with 51,200 jobs added since October 2018. Utah’s private sector industry groups such as professional and business services, and information lead the way. To help keep our economic engine humming, I recently voted to renew the U.S. export credit agency to ensure ongoing support for exports and Utah small businesses’ connections with global customers.
At a time of divisiveness in Washington DC, renewal of the Export-Import Bank brought a broad coalition together, including Republicans and Democrats, and business and labor groups. I was an early supporter of the U.S. Export Finance Agency Act of 2019, which renames the Export-Import Bank, renews it through 2029 and improves the finance agency’s ability to provide short-term credit when the private sector is unwilling or unable to finance businesses’ efforts to expand into global markets.
The U.S. export credit agency received its general charter through the Export-Import Bank Act of 1945, originally created in 1934 as part of the Roosevelt Administration’s New Deal response to the Great Depression, with support from Federal Reserve Board Chair and Utahn Marriner Eccles. In the period after World War II, the Export-Import Bank participated in reconstruction efforts. By the early 1980s, small projects and capital goods and services grew into an increasingly larger share of its business. The finance agency is demand-driven, fee-based and is backed by the U.S. government’s full faith and credit. Its products include: 1) direct loans to foreign buyers of U.S. exports; 2) insurance to protect U.S. exporters or financial institutions against certain risks of exporting; and 3) short-term, secured working capital loans and guarantees, usually to small business. It is prohibited from extending credit and insurance to certain countries including those that are in armed conflict with the U.S. or those that are subject to U.S. sanctions.
Its charter was routinely renewed, until 2015. After its authority was allowed to expire from July 1, 2015 until December 4, 2015, Congress reauthorized it through September 30, 2019. In fiscal year 2014 (the last fiscal year the bank was fully operational), the bank authorized loans of $20.5 billion for 3,746 transactions, to support an estimated $27.5 billion in U.S. exports and more than 164,000 U.S. jobs. The fees it charges for its services have generated an additional $9.6 billion in returns for the U.S. Treasury since 1992 after the loans were repaid.
As an increasingly important exporting state, Utah’s economic growth and international competitiveness benefit from the credit agency’s role. It has bolstered Utah companies’ ability to compete with countries such as China, Brazil, the United Kingdom, and Germany. Miles Hansen, President and CEO of World Trade Center Utah, says “International trade is vital to Utah’s economy. The state’s $14.5 billion in exports adds 7 percent to Utah’s GDP annually and close to 1 in 4 Utah jobs are supported by international trade and investment.” Utah’s advanced industries, such as aerospace and technology, are among those helped by the finance agency. Those businesses offer some of the state’s highest paying jobs –jobs that cannot be outsourced overseas.
Several amendments were added during floor debate with strong bipartisan support. I offered an amendment to the bill, ensuring we don’t do business with bad actors overseas. My amendment blocks the Export Finance Agency from supporting any transactions to people involved with illegal trafficking of synthetic opioids, highlighting concerns about China’s fentanyl violations. It was approved 414 to 1.
The U.S. Export Finance Agency, reauthorized through 2029 under the bill, enables U.S. companies large and small to turn export opportunities into real sales that support jobs and contribute to a strong economy. That is good news for Utah businesses, Utah families and Utah’s future.
Congressman Ben McAdams is represents Utah’s 4th Congressional District.