When exporters and politicians defend the Export-Import Bank — a federal agency that subsidizes U.S. exports by extending U.S.-taxpayer-backed financing to foreign companies buying American goods — they often take on a strangely jingoistic tone.
It’s us-versus-them. Ex-Im President Fred Hochberg portrays international trade as a sailboat race between countries, and Ex-Im is the “wind in [the] sails” of U.S. exporters.
Conservativish advocates of the agency say, “Sure, in a perfect world we wouldn’t subsidize our exports, but we have to because the other guys are doing it.”
This is all pro-wrestling stuff. They are friends, pretending to compete, and all getting paid at the end of the day.
U.S. Ex-Im, as I’ve reported in the past, gives guarantees to Chinese state-owned banks, and even gives direct multimillion-dollar loans to China’s Export-Import Bank.
U.S. Ex-Im has partnerships with Korea’s Ex-Im and Brazil’s national development bank, which has it’s own Ex-Im.
All the world’s Ex-Im banks cooperate in a club called the Berne Union.
I bring this up today because I came across an op-ed urging the U.S. to reauthorize Ex-Im. The op-ed is written by the CEO of Nigeria’s Export-Import Bank — exactly the sort of agency whose existence is supposed to justify putting U.S. taxpayer money on the hook to help Boeing and GE sell stuff overseas. “NEXIM Bank is in a collaborative relationship with U.S. Ex-Im and several other [Export Credit Agencies],” the CEO writes.
So the most convincing defense of Ex-Im — we need to subsidize exports because other countries are doing it — is based not only on bad economics, but on the false pretense of competition, where in reality there is cooperation.
