America today continues to confront a competitiveness challenge of too few jobs and too little economic growth. The good news is there is a future in which America can create millions of good jobs connected to the world via international trade and investment. Doing so will require thoughtful U.S. policies that are based on a sound understanding of how American companies succeed in today’s dynamic global economy. In particular, U.S.-government support for its exporting companies via the Export-Import Bank of the United States should be based on a sound understanding of how companies in America produce their goods and services for export and how they compete with companies based in other countries to win foreign contracts. Unfortunately, current Ex-Im Bank policies fail in both respects. They do not adequately reflect the role that global supply networks play in global U.S. companies. And they do not match the broader viewof support for exporters that virtually all other major Export Credit Agencies have adopted. Drawing on the latest academic and policy research, the current state of ECA policies around the world, and case studies ofindividual companies, this white paper makes two central messages.
- To succeed amidst keen global competition, U.S. exporters today are increasingly integrated into global supply networks to produce their goods and services in America for sale around the world. Increasingly, companies must produce within elaborateglobal supply networks in which final products are made by many companies in many stages spanning many countries, linked together by knowledge, trade, and investment.
- Competitive Ex-Im Bank financing should, but currently does not, adequately reflect the extent to which “Made in America”today involves the rest of the world. In particular, the Ex-Im Bank rule of providing maximum export financing only to products with at least 85% domestic U.S. content is increasingly an anachronism. With policies more in tune with today’s globalmarketplace, Ex-Im Bank could better support American workers.