The repositioning of Ex-Im bank

Abstract

In recent years, U.S. government policy has shifted in favor of government export support similar to that provided by other G-7 nations. In a major initiative in 1993, the Clinton administration devised a national strategy to reposition Ex-Im Bank to respond to the long-standing needs of U.S. exporters. Today, there are several hundred million dollars at Ex-Im Bank's disposal to meet or match the subsidies offered by U.S. trade rivals, and there is a determination to use such resources to help U.S. exporters compete. Yet attempts by Congress during 1995 to trim Ex-Im Bank's capacity in the name of budget cutting have reawakened the debate over export subsidies. The author asks whether it is possible that Washington will forget the adverse consequences of the two-decade failure to keep Ex-Im Bank's loan program competitive with support agencies in Japan and Europe? The article uses the 1992 OECD arrangement, with its restrictions on foreign loan programs tied to the purchase of donor exports, to examine the United States' recurring confrontations with foreign export-subsidy programs and the prospects for U.S. government export support in coming years.