The United States is falling behind in global economic competition, with the result being lost jobs and a rising trade deficit. One reason for this fall is that international trade has become much more competitive. U.S. enterprises are up against formidable competitors, many of them are receiving significant support from their governments as they seek to win in the race for economic advantage and the jobs that go with it.
One key factor in this competitive race is export financing. Foreign competitors enjoy substantial and growing support from their countries’ export credit agencies (ECAs). Indeed, many of the United States’ strongest international trade competitors invest significantly more in export credit assistance as a share of both GDP and exports than the United States does. With the temporary reauthorization of the U.S. Export-Import (Ex-Im) Bank set to expire on May 31, 2012 and as the U.S. Congress looks to reauthorize the Bank for a new five-year term, some free-market or libertarian organizations (e.g., Cato Institute, Club for Growth, Citizens for Limited Government, etc.) have been arguing against reauthorization, making a number of claims about why Ex-Im is not needed. Most of these arguments are not grounded in analysis, but rather are ideological in nature, based on faulty theories and assumptions about markets, globalization, competitiveness and trade. Here is a brief list of the common arguments made by Ex-Im opponents and why they are wrong.