ECAs: To Be or Not To Be

(TXF News, 21 January 2016) In the century of their existence, export credit agencies (ECAs) have rarely been subjected to the level of public scrutiny they find themselves under today... Their advocates claim export credits allow impoverished importers to purchase goods that might otherwise be unaffordable, thereby promoting private sector development in poorer countries while forming an important part of the exporting nation’s trade policy. ECAs’ opponents have accused them of soaking up aid money for developing countries for the primary benefit of rich nations’ industry, supporting investments in projects with detrimental human and environmental impacts, and serving as a thinly-veiled guise for export subsidies and corporate welfare... At the end of June last year, [US] Exim adversaries saw their lobbying efforts come to fruition: the bank shut its doors to any new business and went into maintenance mode. But after five lengthy months of bi-partisan counter-lobbying, the bank experienced a Lazarus-like resurrection at the beginning of December – having its charter reauthorised until the end of 2019. Unfortunately for US Ex-Im though, that was not all she wrote. Although reauthorised, the bank is prohibited from approving transactions of over $10 million until a quorum is achieved at board level – there are currently three vacant spaces on the five-strong board. And Senate Banking Committee chairman Richard Shelby, a staunch Exim opponent, has made it clear he’s “in no hurry” to hold a vote, potentially delaying the process for months.