Today, the President will visit the Boeing assembly facility in Everett, Washington, to announce new steps aimed at promoting American manufacturing and increasing U.S. exports. Manufacturing represents nearly 60% of total U.S. exports, and Boeing is one of the country’s leading exporters of manufactured goods with more than $34 billion in total exports in 2011, up over 45% since 2006. Today’s announcement will follow through on the President’s commitment to provide sufficient export financing to put American manufacturers on an even footing with our foreign competitors, provide expanded support for small business exporters and take the next step in the President’s proposal to reorganize the trade and competitiveness agencies by expanding the responsibilities of the Export Promotion Cabinet.This is the most recent of a series of executive actions the President has announced to put Americans back to work and strengthen the U.S. economy.
“Two years ago, I set a goal of doubling U.S. exports over five years.” said President Obama. “Today, we’re on track to meet that goal – ahead of schedule. But we need to do more, which is why I’m pleased to announce several steps that will help more American businesses sell their products around the world, create jobs right here at home, and help us build an economy that lasts.”
In this year’s State of the Union Address, the President laid out a Blueprint for an America Built to Last, a blueprint that starts with American manufacturing. During the past two years, we have begun to see positive signs in American manufacturing – with the manufacturing sector adding more than 400,000 jobs, the first period of sustained job growth in manufacturing since the 1990s. The President recognizes the vital role manufacturing plays in our economy, and that is why the President’s plan encourages investment in manufacturing, supports U.S. innovation and the growth of U.S. exports. In his 2010 State of the Union Address, the President launched the National Export Initiative with the goal of doubling our nation’s exports in five years. After two years, we are on pace to meet the President’s goal. Exports are up nearly 34% over the level of exports in 2009, exceeding $2.1 trillion in total value in 2011.
Today’s announcements build on the Administration’s past efforts to open up markets for American goods and level the playing field for American companies. Over the past year, the President has signed into law a series of trade agreements that will provide a major boost to our exports by making it easier for American companies to sell their products in South Korea, Colombia, and Panama. In addition, record-setting efforts at the Export-Import Bank – through direct loans, credit guarantees, and credit insurance – have helped U.S. exports remain on target to meet the President’s goal. Building on these existing efforts, the Export-Import Bank is continuing to expand its offerings to help support business exporting.
The Administration has provided important support to Boeing’s export success. Currently, Boeing is building the world’s most advanced commercial airplane, the 787 Dreamliner, directly employing nearly 8,000 people across the country to do so. The company is also working with nearly 11,000 small, medium and large supplier businesses, spending $28 billion. Boeing has suppliers in all 50 states, providing goods and services like the airplane’s ground-breaking carbon fiber composite aircraft structure from Kansas, advanced jet engines from Ohio, wing components from Oklahoma, and revolutionary electrochromic windows from Alabama. Boeing has already received orders for 870 Dreamliners with over 80% of the current orders to be shipped around the world to at least 25 countries like Japan, Australia, China, France and Singapore. Over the past three years, financing from the Export-Import Bank has supported export sales of more than 460 U.S. manufactured Boeing commercial aircraft worth approximately $60 billion to qualified customers. Just this month, Boeing finalized the largest single order in aviation history with Lion Air, the largest airline in Indonesia, for 230 Boeing 737 aircraft, valued at over $21 billion. The Export-Import Bank played a critical role to support that deal coming together. Ethiopian Airlines, one of the strongest airlines in Africa, will take delivery of some of the first Boeing 787 aircraft later this year, made possible in part by support from the Administration.
Nationally, the Export Import Bank has had a tremendous impact. In FY 2011, the Bank set export financing records for the third-straight year, including overall financing exceeding $32 billion, a nearly 34% increase since 2010, and the highest level of financing in the Bank’s 77-year history. This financing has supported $41 billion in U.S. exports from over 3,600 U.S. companies and almost 290,000 export-related American jobs. In particular, the Bank is important for small and medium exporters, and its financing for smaller exporters has risen over 70% over the last three years, comprising more than 85% of the Bank’s transactions. And these programs come at no cost to U.S. taxpayers, as the Bank not only operates on a self-sustaining basis, but it has returned well over $3 billion to the U.S. Treasury since 2005.
Today the President will announce:
Financing to Put American Companies on an Even Footing: Right now, China and other global competitors often provide unfair advantages to help their companies win business overseas. In his State of the Union address, the President stated that the Administration would take action to level the playing field for U.S. companies and workers when our competitors don’t play by global export financing rules. Today, the President will announce that the Administration will actively employ its existing authorities so that the Export-Import Bank can provide U.S. firms competing for domestic or third-country sales with matching financing support to counter foreign non-competitive official financing that fails to observe international disciplines. The President will not allow U.S. companies and workers to lose out on valuable business due to unfair export financing – and will use the Administration’s full powers to ensure that they are competing on an even footing.
New Credit for Small Business Exporters: Today, the President will announce that the Export Import Bank will launch a pilot program, Global Credit Express, to help small business exporters access hard-to-find short term working capital lines of credit. Working with their existing lenders, small businesses will be able to apply directly to the Export-Import Bank for 6-12 month loans of up to $500,000. This year, the program could help small exporters access up to $100 million in much needed capital. At the same time, today Boeing committed to joining the Export-Import bank’s Supply Chain Financing Program, which helps firms, including Caterpillar and Case New Holland advance funds against export-related contracts, providing liquidity and working capital more quickly and on better terms. Through this partnership Boeing’s small business suppliers will be able to access over $700 million in short-term credit this year.
A Call to Reauthorize the Export-Import Bank: In December 2011, Congress extended the Bank’s authorization through the end of May 2012, at its current lending ceiling of $100 billion. However, due to unprecedented demands for export financing in recent years, the Bank estimates it will hit this lending ceiling at the end of March. Unless the Bank’s authorization is renewed, and its lending cap is raised to an appropriate level, the Bank will be forced into the unprecedented position of having to halt all new transactions. Re-authorization of the Bank is critical for U.S. exporters, particularly manufacturers, which account for almost 60% of all U.S. exports, so that they can compete with foreign companies that enjoy far more aggressive support from their countries’ export credit agencies. The U.S. trails countries like Brazil, Canada, China, Germany, France, India, and Italy in official export credit financing as a share of Gross Domestic Product – many times over. Failure to re-authorize the Bank will give competitors, like China, an unfair edge in global trade, with the costs of decreases in U.S. exports and good American jobs.
A Simplified Process for Foreign Trade Zones: Today, the Department of Commerce will announce simplified processes and paperwork for Foreign Trade Zones, designated locations where companies can use special procedures to delay or reduce duty payments on foreign merchandise. There are over 250 zones and 500 subzones that help encourage manufacturing and investment in the US, in industries including automotive machinery and equipment and pharmaceuticals. The rule change will provide a streamlined, shorter and more effective process for manufacturers and exporters seeking FTZ authority that will help expedite decision making and reduce paperwork burdens. These simplifications will contribute to the National Export Initiative goal to double exports by the end of 2014 and the Administration’s goal of attracting and retaining manufacturing activity and manufacturing jobs in the United States.
Legislation to Make it Easier for America’s Businesses to Export: On Thursday, the Obama Administration sent Congress the Consolidating and Reforming Government Act of 2012, to reinstate the authority Presidents held for decades to reorganize and consolidate the Federal government, adding, for the first time, a requirement that any reorganization plan must save money or reduce the size of government. Earlier this year, the President announced that, if Congress gives him consolidation authority, his first action would be to make it easier for America’s job creators to access the services they need to grow and export. The President laid out a plan to bring together six agencies and a handful of other related programs into a single more efficient and effective department with a laser-like focus on promoting American business, exports and competitiveness, while saving taxpayers $3 billion dollars. Until Congress acts, however, we need to do everything we can administratively to enhance our trade and competitiveness programs.
A Presidential Memorandum to Strengthen the Export Promotion Cabinet: Today, the President will issue a Presidential Memorandum, Maximizing the Effectiveness of Federal Trade Investment and Functions, which directs the Export Promotion Cabinet to work across agencies to maximize combined effectiveness of their programs and initiatives in support of the Administration’s strategic trade and investment goals and priorities. The Memorandum gives the Export Promotion Cabinet stronger authority to align interagency efforts and directs the Assistant to the President for International Economic Affairs, Michael Froman, to coordinate its activities. The Memorandum also directs the Export Promotion Cabinet, in consultation with the Trade Promotion Coordinating Committee, to evaluate resource allocations, make recommendations for streamlining overlapping or duplicative programs, and create a unified Federal trade budget. The Presidential Memorandum also directs the Cabinet to take steps to ensure we are most efficiently using federal agencies’ domestic and foreign offices and distribution networks. Finally, the Presidential Memorandum directs the Cabinet to work with the National Economic Council to coordinate administrative initiatives to enhance programs that support American businesses, particularly small businesses, in order to help them innovate, grow, and increase exports. The Export Promotion Cabinet was established via executive order on March 11, 2010.
The Launch of BusinessUSA: Today, the Administration will officially launch BusinessUSA (http://business.usa.gov), a virtual one stop shop that makes it easier for America’s businesses to access the services and information they need to help them grow, hire and export. To strengthen America’s competitiveness in the global economy, the President believes businesses need to be equipped with the best tools and information available to support innovation and job growth in the 21st century. That’s why he directed his Administration to create BusinessUSA as the front door to all the government has to offer. BusinessUSA implements a “no wrong door” policy for small businesses and exporters by using technology to quickly connect businesses to the services and information relevant to them, regardless of where the information is located or which agency’s website, call center, or office they go to for help. To ensure that it is oriented towards the needs of the customer, BusinessUSA has been developed with the active feedback of U.S. businesses.