The Export-Import bank of the US (Ex-Im) is an official credit agency designed to aid the export of American goods. Through providing a variety of loans, guarantees and insurance for foreign companies wanting American manufactured items, the Ex-Im was designed to support the growth of American manufacturing and engineering jobs.
At this time however, American Congress is in the midst of debating whether or not to continue supporting the bank. Without support, the Ex-Im will go out of business by June 30 this year, and many US manufacturers will obviously be worried about the impact this decision will have on their business.
According to The Business Journals (US), the Ex-Im backed about $20.5 billion in export financing for American companies selling products overseas, last year alone. While small businesses were involved with 90 per cent of deals, 75 per cent of dollars were given to large, corporate businesses like Boeing (BA).
Critics of the Ex-Im argue the bank interferes with the free market and hurts domestic businesses because much of the funding is given to large companies.
“By paying foreign companies to buy American exports, the Export-Import Bank tilts the playing field away from mid-sized and small businesses in favour of large, politically connected corporations,” The Washington Times quoted from a coalition’s open letter.
On the other hand, supporters argue despite funding going into larger corporations, the bank helps small to medium businesses compete in a global market through a chain-like market benefit.
Austrade (the Australian Trade Commission) is a government organisation that assists in advancing Australian tourism, trade and investment. Primarily, Austrade assists Australian businesses through the administration of the Export Market Global Grant schemes and TradeStart program.
Setec was a recipient of Austrade’s Globe Ex grant last year and the funding was instrumental in launching their world-first BatteryCheck product overseas. However, CEO David Bayliss does point out that funding is just one aspect of helping a business achieve their goals, particularly if those goals involve international exposure.
“A business not only needs to understand the different market demands in each individual country, they need to have a very specific, focused plan to successfully implement a new product.”
Furthermore, Bayliss points out businesses need the resources in place to manage the application and reporting processes which are often time consuming. Therefore he suggests that in any case, funding has to be substantial for medium enterprises such as Setec, to ensure they do in fact benefit from these programs.