(CNSNews.com) – Between 1997 and 2013, the Export-Import Bank of the United States, which is an agency of the federal government, provided $1,946,035,918 in loans and long-term guarantees to banks in Communist China and Russia, according to the Ex-Im Bank’s annual reports.
The Ex-Im Bank, which was formed in 1934, has posted on its website its annual reports going back to 1997. They show that between 1997 and 2008 specifically, the Ex-Im Bank provided loans and long-term guarantees totaling over $1.9 billion to banks in China and Russia, including banks like the Bank of China, the Russian Agricultural Bank, China’s State Development Bank, and Gazprombank just to name a few.
The annual reports between 2009 and 2013 did not reveal any further loans or guarantees to banks in China and Russia.
The Ex-Im Bank’s annual reports show the date of the loan or the guarantee; what product the loan is for; how much the loan or guarantee is; and who the obligor is. According to Ex-Im, an “obligor” is the borrower that has the obligation to repay the loan, whether the financing is a direct loan from Ex-Im Bank or a commercially funded loan for which Ex-Im Bank is providing a loan guarantee of the repayment to the commercial lender. In layman’s terms, the obligor is simply the entity to whom the loan was made.
According to that definition, it means that Ex-Im helped banks in Communist China and in Russia by providing them with loans and long-term guarantees totaling $1.9 billion over a span of 12 years.
For example, in 2008, the Export-Import bank provided a long-term guarantee of $126,011,280 to the Industrial and Commercial Bank of China to purchase Harsco Corp. equipment for railroad track maintenance and inspection.
Harsco Corporation, although global in operations, is based in Camp Hill, Penn.
In 2003, the Export-Import bank provided a $22,627,540 long-term guarantee to the Russian bank, Gazprombank, for Superior Highwall Miners Inc.’s mining equipment. Superior Highwall is based in Beckley, W. Va.
Another example is in 2001, when the Ex-Im bank provided a $66,619,814 long-term guarantee to the China Construction Bank for a Boeing B767-300 aircraft. The multinational Boeing Company maintains its headquarters in Chicago, Ill.
According to Dan Ikenson, the director of the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, these loans do not benefit U.S. taxpayers.
“I don’t think Ex-Im subsidies to Chinese and Russian banks or State-Owned Enterprises constitute good uses of taxpayer resources,” Ikenson said. “But, believe it or not, Ex-Im does partner with foreign export credit agencies to fund export sales and infrastructure projects even though the primary rationalization for having Ex-Im in the first place is to counteract the advantages provided to foreign businesses by those export credit agencies. It’s a complete sham.”
In a report by Ikenson, The Export-Import Bank and Its Victims, he explains how the Export-Import Bank rewards some companies, but penalizes many other companies. “By trying to ‘level the playing field’ with foreign companies backed by their own governments, Ex-Im ‘unlevels’ the playing field for many more U.S. companies competing at home and abroad,” he said. “This adverse effect has been ignored, downplayed, or mischaracterized, but the collateral damage is substantial and should be a central part of the story.”
“When the Export-Import Bank provides financing to a U.S. company’s foreign customer on terms more favorable than he can secure elsewhere, it may be facilitating a transaction that would not otherwise occur,” explains Ikenson. “That is the basis for Ex-Im’s claim that it helps the U.S. economy by increasing exports and ‘supporting’ jobs.”
“But that claim is questionable because those resources might have created more value or more jobs if deployed in the private sector instead,” said Ikenson. “If that were the case, Ex-Im’s transaction imposes a net loss on the economy.”
Without congressional reauthorization, the charter of the Export-Import Bank of the United States is set to expire on September 30. President Obama has said he supports another 3-year re-authorization of the Export-Import Bank.
In 2008, as a Democratic presidential candidate, Barack Obama described the Ex-Im Bank as “little more than a fund for corporate welfare.”