Allowing the U.S. Export-Import Bank to close would put American businesses at a disadvantage, former New York Mayor Michael Bloomberg said, as the government holds a summit with African leaders aimed at spurring investment in the continent.
“This is not a political thing -- this is something that every other country does,” said Bloomberg, speaking in an interview with Bloomberg Television’s Hans Nichols, alongside U.S. Commerce Secretary Penny Pritzker. “If we’re going to be competitive, we have to do it.”
Without congressional action, the charter for the 80-year-old bank, which helps foreign companies buy U.S. goods, will expire at the end of September. Congress has begun a five-week recess, leaving limited time to act.
Bloomberg and Pritzker spoke about the importance of increasing U.S. investment in Africa, the main topic of the three-day U.S.-Africa Leaders Summit, which ends tomorrow in Washington.
They spoke before today’s day-long U.S.-Africa Business Forum, hosted by Bloomberg Philanthropies and the Commerce Department. Bloomberg Philanthropies is led by the former New York mayor, who is founder and majority owner of Bloomberg LP, the parent of Bloomberg News.
“American companies are really losing out on opportunities to grow and to create jobs, both here and in Africa,” as China is “delving into Africa head first,” Bloomberg said in a separate phone call yesterday with reporters.
“This is a continent with enormous potential but we’ve got to take the plunge as well, and that’s what this conference is all about,” he said of the summit, which includes more than 40 African leaders.
As it tries to boost U.S. trade, the Obama administration is “100 percent committed” to achieving renewal for the Export-Import Bank, Pritzker said. The body helps to finance the export of U.S. goods and services to international markets.
Republican opponents, including House Financial Services Committee Chairman Jeb Hensarling of Texas, have sought to abolish the bank, saying it benefits large corporations that don’t need the support.
“If you think that we shouldn’t do it and you can get all countries to stop, then we’ll have a level playing field,” Bloomberg said. “We won’t have as much business,” he said, saying the bank is a “catalyst and gives people the ability to buy now and pay later. But nevertheless it’s the competitive aspect that I worry about.”
Export-Import Bank Chairman Fred Hochberg and Angola’s Minister of Finance Armando Manuel announced a memorandum of understanding to explore ways to develop sectors including energy, mining and telecommunications in the African nation, according to a bank statement today.
The Export-Import Bank has a mandate from Congress to focus on projects in sub-Saharan Africa. The lender in fiscal year 2013 approved a record 188 deals worth $604 million to support exports including fire trucks, railroad equipment and gear for oil rigs as part of this mission, according to its annual report.
Those figures represent about 5 percent of the bank’s total deals and 2 percent of the dollar value of its total transactions last year. The bank is also responsible for $5 billion of the $7 billion in U.S. commitments through 2018 to the Obama administration’s Power Africa initiative, an effort to double electricity use in sub-Saharan Africa.
If Congress doesn’t renew the bank’s charter, “we would suddenly have to pull back one of the tools that we would offer Power Africa,” Andrew Herscowitz, the program’s coordinator, said in a phone interview.
About 89 percent of the bank’s 3,842 deals during the past fiscal year benefited small businesses, according to the lender’s annual report. The bank provided $27.3 billion in new financing in 2013. Of long-term loan guarantees, 65 percent of the dollar value involved sales of Boeing Co. (BA) aircraft, according to a June 30 report by the independent Congressional Research Service.
“We’ll be successful on Capitol Hill because I think every district in this country has a company that’s selling something around the world, that if it isn’t their company that’s getting Ex-Im financing, they’re supplying to a product that’s getting Ex-Im financing,” Pritzker said “We’ll get there.”
The National Association of Manufacturers said in a study published last week that other nations offer more support for their exporters than the U.S. does with its Ex-Im Bank. The top U.S. trading partners -- including China, France, Japan, South Korea and Brazil -- provided almost half a trillion dollars in credit aid last year. China’s Ex-Im Bank authorized the most at more than $153 billion in 2013, the report said.
To contact the editors responsible for this story: Chris Wellisz at email@example.com Kevin Costelloe, Jon Morgan