IFPTE Urges Export-Import Bank to Maintain Stong Domestic Content Requirements
In response to a public notice that the U.S. Export-Import Bank is considering revising domestic content for “transformational industries,” IFPTE submitted a public comment arguing against any flexibility that weakens the Bank’s commitment to promoting and supporting domestic manufacturing and services and American workers.
The public notice announces that Bank’s Board of Directors will consider changes to domestic content requirements for 11 high-tech and emerging industries under the “Program on China and Transformational Exports” that was established by the 7-year Export-Import Bank reauthroization legislation that was enacted last December.
IFPTE’s has been a strong and consistent supporter of the Export-Import Bank and advocated extensively for that reauthorization bill. Further, IFPTE believes that the China Program’s requirement that the Bank put forward “products that are ‘fully competitive’ with China is necessary to counter the Chinese government’s aggressive expansion of export credit to support its manufacturing capacity and market share in pivotal advanced-technology industrial sectors.”
Recognizing that current U.S. tax policy already incentives offshoring of domestic manufacturing, IFPTE’s comment warned that “Lowering the domestic content is an incremental change to a system that has weakened our industrial base, shifted jobs out of our economy, and left workers with less economic security.”
The appropriate approach for the Banks is one that conforms to the Bank’s mission of supporting support U.S. manufacturing exports and domestic job creation through the 85% domestic content requirement for full financing support. Such an approach would require the Bank’s role to be places within a coherent national economic strategy that encourages companies to “increase investment and employment in family wage jobs in the domestic economy” and economic policies that include “claw back mechanisms in cases where companies participate in export incentive programs and then reduce employment or manufacturing capacity in the U.S.”