As long as our global competitors are providing financing for their exports, we've got to do the same. So I'm glad that Congress got this done.
It sounds to me like Obama is a bit skeptical of this kind of export financing, but feels compelled because others are doing it as well. Is there an opening here for multilateral disarmament of export financing? Could we convince our trading partners that we should all stop? As it happens, the reauthorization statute says we have to try to do just this:
SEC. 11. NEGOTIATIONS TO END EXPORT CREDIT FINANCING.
(a) In General- The Secretary of the Treasury (in this section referred to as the `Secretary') shall initiate and pursue negotiations--
(1) with other major exporting countries, including members of the Organisation for Economic Co-operation and Development (OECD) and non-OECD members, to substantially reduce, with the ultimate goal of eliminating, subsidized export financing programs and other forms of export subsidies; and
(2) with all countries that finance air carrier aircraft with funds from a state-sponsored entity, to substantially reduce, with the ultimate goal of eliminating, aircraft export credit financing for all aircraft covered by the 2007 Sector Understanding on Export Credits for Civil Aircraft (in this section referred to as the `ASU'), including any modification thereof, and all of the following types of aircraft:
(b) Annual Reports on Progress of Negotiations- Not later than 180 days after the date of the enactment of this Act, and annually thereafter, the Secretary shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives--
(1) a report on the progress of any negotiations described in subsection (a)(1), until the Secretary certifies in writing to the committees that all countries that support subsidized export financing programs have agreed to end the support; and
(2) a report on the progress of any negotiations described in subsection (a)(2), including the progress of any negotiations with respect to each classification of aircraft set forth in subsection (a)(2), until the Secretary certifies in writing to the committees that all countries that support subsidized export financing programs have agreed to end the support of aircraft covered by the ASU.
According to the Reuters article, though, these negotiations are unlikely to accomplish much:
Delta's complaint led to language in the reauthorization bill requiring the United States to initiate negotiations with other major exporters aimed at eliminating government-subsidized financing of aircraft and other goods.
Hochberg said he expected the U.S. Treasury Department to make a good-faith effort to reach a deal, but personally has not seen much foreign appetite for the talks.
"That is generally not a view that I have seen shared by our counterparts around the world. They are, as we are, looking to create jobs and will do (that by) any means they can," Hochberg said.
I don't have much sense of how other governments see this. It is possible that the chances of success are slim. Here's what I wonder, though. The US pushes hard on a number of issues in trade negotiations. It's not always clear to me how they decide what to push for, but however they make the decision, I assume it is based on some internal deliberation of what is important and what we want to accomplish. As far as I can tell, it does not appear that reducing or eliminating the use of export credits is currently a high priority. But when you compare the importance of the various issues that are being negotiated as part of trade agreements, there may be a strong argument that export credit financing talks should be given a more prominent role than they are now. Perhaps if we made reducing the use of export credits a negotiating priority, replacing a number of other issues that have less of a connection to core trade issues, there might be a better chance that something could be achieved.