United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office National Security and International Affairs Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1997-04-29 monographic deposited born digital 25 p. GA 1.13:T-NSIAD-97-147 https://www.govinfo.gov/app/details/GAOREPORTS-T-NSIAD-97-147 P0b002ee180394075 f:ns97147t DGPO 2010-08-12 2011-03-23 GAOREPORTS-T-NSIAD-97-147 machine generated eng fdlp REPORT GAOREPORTS-T-NSIAD-97-147 T-NSIAD-97-147 Exporting Subsidies International trade International economic relations International organizations Foreign governments Competition Business assistance Restrictive trade practices Foreign trade policies China Indonesia Mexico Trinidad and Tobago Brazil Tied Aid Capital Projects Fund Canada France Germany Italy Japan United Kingdom Testimony NSIAD

GAO discussed issues concerning the reauthorization of the U.S. Export-Import Bank (Eximbank), focusing on: (1) the rationale for and against the Eximbank's programs; (2) the ways in which its assistance is distributed; and (3) foreign competitors' export finance programs.<p/>GAO noted that: (1) in reviewing the Eximbank's export finance programs, the Congress needs to weigh the benefits to the U.S. economy of the Eximbank's programs against their costs; (2) while there are numerous arguments for and against government export financing programs, the most compelling case for these programs appears to be in helping to "level the international playing field" for U.S. exporters and providing leverage in trade policy negotiations to induce foreign governments to reduce and ultimately eliminate such subsidies; (3) during fiscal years (FY) 1994 to 1996, the top 15 users (lead U.S. exporters or contractors) of Eximbank financing accounted for about 38 percent of the value of Eximbank's financing commitments; (4) during the same period, the Eximbank also reported that 20 percent of its assistance went to support small business; (5) the Eximbank believes that these small business transactions would not otherwise have been financed by private lenders; (6) in geographical terms, China, Indonesia, Mexico, Trinidad and Tobago, and Brazil were Eximbank's top markets in FY 1996; (7) the six major industrialized countries GAO reviewed all maintain various types of export finance assistance programs; (8) although considerable differences exist among these programs, they all help exporters in competing for market share in developing markets by providing varying types of financial assistance (loans, guarantees, and insurance); (9) the Eximbank provides similar types of assistance and also administers a tied aid capital projects fund (also known as the "war chest") as part of its programs; (10) tied aid is concessionary (low interest rate) financing that is linked to the procurement of goods and services from the donor country: (11) the war chest is designed to counter other countries' trade-distorting tied aid practices; (11) Eximbank's assistance programs have cost the U.S. taxpayers about $4 billion over the last 5 years; (12) the Eximbank's programs require substantial levels of taxpayer support and the U.S. government's ultimate objectives continue to be aimed at reducing and eliminating such export financing subsidies and allowing exporters to compete on the basis of price, quality, and service, not subsidized financing; (13) the U.S. government needs to make renewed efforts to use international forums such as the Organization for Economic Cooperation and Development to reduce and eve* https://www.govinfo.gov/content/pkg/GAOREPORTS-T-NSIAD-97-147/html/GAOREPORTS-T-NSIAD-97-147.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-T-NSIAD-97-147/pdf/GAOREPORTS-T-NSIAD-97-147.pdf GAO/T-NSIAD-97-147 https://www.govinfo.gov/app/details/GAOREPORTS-T-NSIAD-97-147 Testimony GAO/T-NSIAD-97-147; Export-Import: Reauthorization Issues; Exporting Subsidies International trade International economic relations International organizations Foreign governments Competition Business assistance Restrictive trade practices Foreign trade policies China Indonesia Mexico Trinidad and Tobago Brazil Tied Aid Capital Projects Fund Canada France Germany Italy Japan United Kingdom Title 12 Section 635 12 U.S.C. 635 Public Law 101-508