[wahern]

Yep. Every country with an advanced export industry has an Export-Import Bank. Small countries making capital purchases of hundreds of millions of dollars wouldn't be able to secure the financing, otherwise; at least, not at any reasonable rate. The fact that the U.S. Export-Import Bank has never had a net loss (at least, none of note AFAIK) is really all we need to know about how much of an unfair subsidy they're providing: none. IOW, they aren't guaranteeing transactions that aren't economically viable. It's just that, say, Ethiopia has zero chance of not getting gouged by major American or European banks. Among other things, big western banks don't have any appetite for dealing with the risk--currency exposure, foreign liquidation headaches. Even though ultimately they could recover their losses, it would ruin a few quarters of profits and throw their shareholders into fits.

When people argue that Boeing exports make up the bulk of the Export-Import Bank's financing, well, d'uh. For political reasons the bank likes to sell itself as supporting small business, but the fact of the matter is that the global banking industry is competitive enough to finance smaller purchases. The economic function of an Export-Import Bank is to improve the transactional efficiency at the very high-end of the market. More importantly, as an advanced economy the U.S. primarily exports advanced (i.e. extremely costly) capital goods.

Some national export-import banks are primarily in the business of funneling subsidies to domestic exporters. You can tell because they hide huge losses. But that's just not the case in the U.S., Canada, or most of Europe.

[Tyrek]

That's kind of like arguing that because housing prices have never(!) gone down (pre-2008), housing prices will never go down, and therefore underwriting any mortgage carries 0 risk. It's simply bad math.

[wahern]

I'm not saying it's 0 risk. My point was merely that given the absence of such losses--losses that similar banks (e.g. in China) regularly sustain to support blatant industrial subsidies--then it's a stretch to call it a subsidy given the loaded meaning of that word in both politics and international affairs.

Yes, technically it's a market intervention. But unless someone is prepared to say that the Export-Import Bank is creating a bubble in exports, driving more exports than is economically sustainable, then criticism of the Export-Import Bank is unwarranted. Some economists are prepared to say that. But I think most economists--the ones who aren't ideological radicals--would say that it's a complex question, admit that it's probably serving some useful economic function, and shrug their shoulders. And of course most other people in the industry would absolutely say that it serves useful and necessary function.