By Bill Owens
As I travel across Northern New York and speak with many business leaders, I hear repeatedly about the need for economic development policies that support sustainable, market-driven small business expansion. One such federal agency, the well-known, yet often under-utilized Export-Import Bank is particularly well equipped to implement such policies so that U.S. companies may grow by accessing new export markets.
The Ex-Im Bank is the official export credit agency of the federal government. In 2012, the Export-Import Bank supported more than $50 billion in U.S. exports and more than 225,000 American jobs. Companies across the region, including those in Plattsburgh, Watertown, Potsdam and Gloversville, have benefited from the bank's trade financing, which has supported more than $30 million in exports from New York Congressional District 21 over the past seven years. Already an important economic resource for our region, the Export-Import Bank has the potential to assist New York businesses in achieving even greater results in the future.
The Export-Import Bank facilitates American exports when a U.S. seller is unable to secure an adequate assurance of payment from a foreign buyer, which would support standard credit requirements. In the absence of available private sector mechanisms, the Export-Import Bank offers products like supply chain financing, working capital loan guarantees, and foreign buyer loans in order to facilitate U.S. exports and business expansion. These products also include loan guarantees to commercial lenders such as the community banks of Northern New York, which play a critical role in driving economic development in our towns. In its 79-year history, the Export-Import Bank's effectiveness in brokering these transactions is evidenced by the fact that its loss ratio has always remained below 2 percent, and the agency has never needed taxpayer dollars to operate. In fact, the bank has demonstrated sound management practices by returning billions of dollars to the U.S. Treasury, including more than $1 billion in surplus last fiscal year alone.
In our region, we should consider ways to expand the beneficial role that Export-Import Bank financing programs can have for north country businesses that are seeking assistance to export products to nearby Canadian markets as well as many other global destinations. Notably, Canadian companies that establish U.S. subsidiaries in Northern New York are also eligible to apply for financing. This eligibility creates an opportunity for economic developers to reach out to Canadian companies that may find Export-Import Bank financing among many attractive resources in opening a subsidiary in New York.
Exporters in Northern New York benefit from a strategic location, just south of large Canadian metropolitan marketplaces, with a number of road, rail and air transportation options to New England, New York City, Western New York and points farther west. Similarly, the St. Lawrence Seaway connects ports in New York's 21st District to those in Montreal and across the Great Lakes region. Domestic manufacturing exporters, in particular, are poised to benefit from America's emerging energy independence and affordable energy supplies. Many organizations in New York across the public and private sectors are working to ensure our K-12 educational system and post-secondary vocational training programs equip our workforce with skills needed to ensure businesses are competitive in the global economy. In 2010, Brazil and China provided 10 times more export assistance as a share of GDP than the U.S. The Export-Import Bank provides a number of support mechanisms needed to level the playing field for American exporters and, most importantly, to create jobs.
As we consider these opportunities, it is important to realize that many small companies have a preexisting, yet often unrealized capacity to export and conduct international trade. Competitive barriers to trade that have prevented small businesses from exporting in the past are coming down due to such factors as the rise of e-commerce, online marketing and communications technology and the increase in affordable shipping and transportation options. In 2012, of the 3,400 companies the Export-Import Bank supported, more than 85 percent were small businesses, the engines that drive our economy and employ half of the U.S. workforce. What's more, recognizing these trends, we must ensure that promoting small business exports is also a top priority in all of our international trade negotiations.
Much work remains to support the array of programs that similarly use market-based mechanisms to support small business exports. For example, in February, I co-sponsored a bill to permanently reauthorize the State Trade and Export Promotion program, which supports small businesses as they seek access to foreign markets through such activities as trade show participation and international marketing events. Since its creation in 2010, the program has yielded $75 in economic output for every $1 invested, a wise public investment indeed.
I recently invited the Export-Import Bank to the north country to organize a global access summit so local businesses can learn more about export support programs and their potential to spur economic development in Northern New York. I look forward to hosting this event and to continuing to advance practical support mechanisms for businesses so they can create well-paying jobs in our communities.