Ex-Im bank is crucial to U.S. strength

A fight is raging in Congress over the future of the Export-Import Bank.

Not many are familiar with this small federal agency that provides loans and insurance to help U.S. companies sell their products overseas, but it is vital to our economy and also supports the industries, technologies and services that are important to our defense.

My company, Ventech Engineers International, for example, designs and builds small oil refineries at our plant in Pasadena, near Houston. We then export these largely pre-built facilities all over the world, supplying desperately needed fuel to some of the most impoverished and remote areas of the globe.

Right now, our refineries are at work at three locations in the Kurdish area of northern Iraq, processing almost 400,000 barrels of crude oil a day to fuel America’s most reliable ally in the region.

It is no understatement to say that this oil is one of the foundations of the Kurds’ fight against ISIS.

The U.S. Consulate at the Kurdish capital, Erbil, told us a few years ago that Ventech does more business in Iraq than any other private firm.

Most of the discussion of the Ex-Im Bank deals with economic issues like the 150,000 American jobs that are attributed to the bank each year and its impact in America’s gross domestic product.

Critics focus on ideological slogans like “crony capitalism” or the true but irrelevant point that government shouldn’t “pick winners and losers” in the market (Ex-Im does no such thing).

But here’s a far more relevant fact: If Ex-Im shuts down after its charter expires Tuesday, we will not be able to build a critically needed $300 million facility to supply fuels required for the fight against ISIS.

In the longer term, America’s central role in rebuilding Iraq and the development of the region will be put at risk as foreign firms, fiercely backed by their own big-spending governments, rush in to seize business that right now is going to American companies backstopped by the Export-Import Bank.

And the loss of those projects will also represent lost future business to support and maintain those American-supplied facilities for decades.

That loss will have painful economic consequences, as export-oriented businesses pull back and American export workers lose their jobs by the tens of thousands.

It will put in motion a costly “brain drain” as key export fields like aerospace, oil services and precision machinery all shift overseas.

But the stakes are higher still. We learned during the Cold War how the spread of U.S. culture, products and businesses around the globe enhances our global strength.

Withdrawing from global economic engagement as the bank’s critics would have us do would dangerously undermine this vital outreach tool.

Bank critics are willing to sacrifice these interests because they believe any effort by the government to help American private industry succeed is an improper interference in the marketplace.

But the bank is governed by strict regulations that forbid it from competing with the private sector, and anyone who wants to use its services must show that no commercial alternative exists.

And this is often the case, especially doing business in destabilized regions like the Middle East.

The charge of “corporate welfare” is even more far-fetched. Like any bank, Ex-Im charges interest and fees for its services, at market rates according to independent accountants.

In fact, the bank actually pays for its own operations out of these fees, and in some years even runs a surplus.

As a businessman, I don’t have the luxury of debating fine points of ideology. All I know is that for every export we make to Iraq, Kazakhstan or West Africa there is a long line of foreign competitors hungry to replace us — and most of these are backed by export credit from their own governments that are up to 10 times what Ex-Im provides.

The bank’s conservative critics would never support unilateral disarmament of our military, so why are they pushing to unilaterally disarm our economy?

Texas politicians like Sen. Ted Cruz and Rep. Jeb Hensarling, R-Dallas, are leading the push to shut down the bank. I urge them to reconsider and stand up for U.S. business by reauthorizing the Export-Import Bank.

Kevin Stanley is CEO of Ventech Engineers International in Pasadena, near Houston.

This story was originally published June 26, 2015 at 7:39 PM with the headline "Ex-Im bank is crucial to U.S. strength."