The U.S. Export-Import Bank recently approved a nearly $3 billion loan guarantee to a Colombian oil refinery, one of many recent moves by the bank. In an email interview, Gary Hufbauer, Reginald Jones Senior Fellow at the Peterson Institute for International Economics, discussed the operations of the U.S. Export-Import Bank.
WPR: What is the core mission of the U.S. Export-Import Bank and what are its principal activities?
Gary Hufbauer: The core mission of the U.S. Export-Import Bank should be to promote U.S. exports of goods and services in circumstances where financing conditions make a difference. The bank carries out its mission by providing direct credits to U.S. suppliers and foreign buyers and by guaranteeing bank loans that finance export transactions. In what circumstances is support by the Export-Import Bank likely to make a difference? In my opinion, these are transactions that exhibit one or more of the following characteristics: first, expensive capital goods, such as airplanes or power plants, that have useful lives of a decade or more, and require financing to match their useful lives; second, export sales to unstable countries that have a record of abrupt change in government or economic policy; third, export sales of services such as utility management or educational testing or large construction projects; and fourth, circumstances where a U.S. exporter is competing with a subsidized third-country exporter.