Trade agreements aid Chicago jobs and economy, U.S. Chamber official says

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President Obama’s trade agenda seeking Congress’ blessing for expanded free trade and continuation of the Export-Import Bank helps business by boosting Illinois jobs and sales, a U.S. Chamber of Commerce official told a Chicago audience on Tuesday.

The Export-Import Bank, a federal agency whose charter is set to expire June 30 without congressional reauthorization, has helped 369 Illinois companies export more than $6 billion in goods, and those sales have supported 45,000 jobs throughout the state, said Myron A. Brilliant, executive vice president and head of international affairs for the U.S. Chamber of Commerce. He spoke at the Illinois Chamber of Commerce headquarters, 300 S. Wacker Drive, to a group of local businesspeople.

The so-called Ex-Im Bank provides low-cost loans and loan guarantees to businesses so they can sell “made in USA” goods overseas.

In an advance copy of his prepared remarks, Brilliant said opponents of the Ex-Im Bank are spreading “false and cynical” stories “that threaten the 164,000 U.S. workers and $27.5 billion in exports that the Bank supports [nationwide].”

Contrary to opponents’ arguments, he said, more than 90 percent of the Ex-Im Bank’s transactions help small businesses such as Mathews Company in Crystal Lake. Mathews makes grain dryers, which are used to keep grain from spoiling while in storage.

“Shutting down the Ex-Im Bank would eliminate critical financing options for many small businesses,” Brilliant said in his prepared remarks. “Commercial banks generally won’t accept foreign receivables as collateral for small business loans. Without the Bank, companies like Mathews Company would have nowhere else to turn.”

That message resonates with Mary Howe, president of Howe Corp., 1650 N. Elston, who attended the speech. Howe, which employs 40, makes high-capacity ice machines for big users like grocery stores, food processors and zoos that use the ice for penguin and polar bear habitats.

Howe said her company depends on the Ex-Im Bank’s foreign receivables insurance program for roughly half of the company’s collateral that backs up its working line of credit.

“If Congress doesn’t renew the Ex-Im Bank, our company would lose its access to essential working capital,” Howe said.

John Gruber, chief financial officer at Itasca-based W.S. Darley & Co., said the bank’s loan guarantees are “our lifeline” without which the company’s sales of fire trucks and fire pumps to China and Africa “would probably just disappear” and lead to significant employee cuts.

He noted the loan guarantees to W.S. Darley’s customers are an essential part of doing business in certain countries, such as Nigeria, where commercial banks would find it difficult to evaluate collateral and any loss of short-term sales would likely cut off long-term business.

Last year, W.S. Darley’s overseas sales of fire trucks and pumps, including in China, Africa and South America, accounted for 30 percent of its $170 million in annual sales.

The 107-year-old W.S. Darley employs 230, including 75 at the Itasca headquarters.

Brilliant didn’t mention that big companies, such as Chicago-based Boeing, also benefit from the bank’s financing.

But Sharyn Bovat, a blogger/researcher/analyst who lives in Washington, D.C., and attended Tuesday’s event, believes the Ex-Im Bank is “toast.”

She said its reauthorization support is waning among African-American members of Congress because it hasn’t loaned enough money to minority-owned businesses and that progressive Congress members are getting “queasy” because of proposals to let the bank insure weapons.

“The GOP-controlled Congress and Rep. Brad Sherman, a Democrat from California and the second ranking Democrat on the House Foreign Affairs Committee, want America to insure weapons,” she said. “They believe it should be clearly stated that our troops should use our [American] weapons, and we don’t want arms randomly sold.”

But after his speech, Brilliant told the Sun-Times he doesn’t see those issues as major stumbling blocks.

Instead, he said, most opposition “is coming from Tea Party activists who want a scalp — who want to see the U.S. government shrink and see it (the Ex-Im Bank) as corporate welfare.”

In his speech, he also had noted that the Ex-Im Bank charges fees for its services, enabling it to send to the Treasury $7 billion more than it received in appropriations for program and administrative costs since 1990.

“And because Ex-Im financing is backed by the collateral of goods being exported, it exposes U.S. taxpayers to very little risk, boasting a default rate lower than commercial banks,” Brilliant had told the crowd.

He also touted a controversial bill that would give President Obama the authority to negotiate trade deals that Congress could not change by adding amendments.

The U.S. House of Representatives is expected to vote on the proposal soon, and political pundits say it will be one of the most important votes of Obama’s last two years in office.

The so-called Trade Promotion Authority bill passed the U.S. Senate in May after political deal-making let Democrats vote on a separate bill that would crack down on countries that manipulate their currencies in order to gain price advantages for their goods that are sold here.

Brilliant said the Trade Promotion Authority bill would require the Executive Branch to consult with Congress and the public during trade negotiations and give Congress final say on any trade agreement.

In answer to an audience member’s question, Brilliant said he believes the Ex-Im Bank will be reauthorized, but it will likely have to be attached to an unrelated piece of legislation like a highway authorization bill.

It’s likely, however, that the Ex-Im Bank’s extension won’t happen by the June 30 deadline, he said; instead, he predicted it could get done in July.

Brilliant praised two controversial trade deals that the Obama administration has put at the top of its agenda: The Trans-Pacific Partnership that involves 11 Asia-Pacific countries, and a Transatlantic Trade and Investment Partnership that the United States and the European Union are pursuing.

He argued that the U.S. House’s failure to approve the Trade Promotion Authority legislation would leave U.S. workers and companies at a “sharp disadvantage” and would “guarantee that foreign markets remain closed to U.S. exports” — and as a result, he said, Americans’ standard of living and “our standing in the world” would suffer.

Brilliant asked Illinois and Chicago Chamber members to lobby the House for the bill’s approval, including personalizing draft letters on the U.S. Chamber’s website at uschamber.com/tpa and uschamber.com/exim.

Brilliant acknowledged the “unusual situation” that the Obama administration faces with traditional political allies opposing the expanded trade authority while supporting the Ex-Im Bank.

Most Democrats strongly support the Ex-Im Bank’s reauthorization, while some Republicans have reservations about it, he said. Republicans have cited what they consider a lack of transparency and consistency in the bank’s lending standards, as well as Inspector General investigations into bribe-taking and other wrongdoing by some bank officials.

The opposite is true of expanded trade authority, with most Democrats opposed and Republicans strongly supporting it, Brilliant said.

Afterward, Brilliant told the Sun-Times that every president since Franklin Roosevelt has had fast-track negotiating authority.

“There are members in the Republican Party who oppose the president and don’t want to give him any victories,” Brilliant said.

“They are not realizing the role that Congress does have – they set objectives, consult with the president and ultimately pass the trade agreements. And when you play with trade, you’re playing with our economic and national security,” he said.

The vote on expanded trade authority “is going to come down to the wire,” he said. “We need everyone’s help.”

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