You know that something doesn’t smell quite right when politicians and political appointees write a fluff piece about how great they are doing but fail to give any concrete examples and only repeat tired and debunked talking points. That what North Dakota senator Kevin Cramer and outgoing Export-Import Bank chair Kimberly Reed have done today in The Hill.
In the piece, they do what Reed has been doing for about a year: remind us that when Ex-Im was reauthorized in December 2019, the agency was given a mandate to focus on fighting China. See:
The reauthorization legislation also tasked EXIM with an important new mission: developing a “Program on China and Transformational Exports.” The effort aims to neutralize export credit or other subsidies provided by China or by other covered countries and to advance the comparative leadership of the United States with respect to China across 10 transformational export categories. The law charges the agency with a goal of reserving no less than 20 percent of its total financing authority — $27 billion out of $135 billion — for support of U.S. exports made pursuant to the program.
However, any goal-oriented individual (or institution) would know that regurgitating the statutory language that Congress handed to you in the reauthorization bill is quite different from actually doing something. Reed and Cramer seem to assume we wouldn’t notice the difference. Tellingly, the piece includes no examples of what Reed, as the head of ExIm, has actually done to fulfill that mandate. Why? Because she’s not done much at all, as I explained back in September.
Beyond the repetition, the timing for this propaganda is quite unfortunate. Just two days earlier Brendan Bordelon at National Journal produced a detailed report called “Is the EXIM Bank’s push to thwart Chinese tech smoke and mirrors?” Read it, and you will see that there’s little evidence of a coherent strategy in anything that the ExIm chairman has said or done, and she certainly has no results to show for it.
For instance, Bordelon notes that it is all well and fine to say ExIm will finance lots of projects in these “10 key industries of the future,” but the reality is that “with few exceptions, U.S. exports of these technologies simply don’t exist—and where they do, they’re mostly governed by export controls so strict that ExIm will be precluded from financing them.”
In fact, when he talked to David Trulio, a former Pentagon official who took over the China program in May, and Stephen Renna, the chief banking officer at ExIm, they couldn’t point to more than 5 projects in the China “pipeline” in very, very early stages of development (meaning who knows if they will even see the light of day) in spite of Trulio saying that ExIm has talked to “over 1,100 exporters, stakeholder associations, and other practitioners.”
Further, Bordelon writes:
Martijn Rasser, an expert in China and emerging technologies at the Center for a New American Security, said export controls on products like semiconductors, coupled with the lack of notable export markets for U.S.-made products in industries like AI, quantum computing, or financial technologies, has him confused about the bank’s ultimate goal.
“Unless EXIM can give some specific examples of the types of deals that they’re pursuing, it’s hard to even wrap your head around what the hurdles could be,” Rasser said.
It echoes my own work that shows that when it comes to its China startegy, ExIm is all talk and little action. What comes through in the Bordelon piece is that ExIm is actually not designed to do all this in the first place so we shouldn’t be surprised. That explains why all that the agency has been doing in the nearly one year since reauthorization is the same stuff it’s been doing for decades: serving its old friends in a very narrow range of industries. (here, here, and here.)
There is one area where ExIm has been very active, as reported by the National Journal piece. The bank has apparently been doing everything it can, through its outgoing political appointees, to cut itself off from being accountable to other agencies. For instance, according to Bordelon’s reporting, ExIm reformed guidelines for so-called “tied aid (which is a traditionally defensive subsidy against the subsidies of other countries) so it can become a slush fund available for ExIm to spend absent a policy justification and without supervision from Treasury. This is one of several examples.
Is anyone in Congress paying attention? This is not just wrong. It defies the purpose set by those who believe the government, and ExIm in particular, could be used to fight China effectively (I don’t) should pay particular attention. I hope they will see through the ExIm rhetoric which, if it continues this way, won’t deliver the results that the government and taxpayers apparently want. All this will have done is make Exim more bloated and unaccountable and many this country look a little more like China.