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President Seeks Business Support for Export-Import Bank

Posted by Christopher Geehern on Jul 2, 2015 9:51:06 AM

U.S. President Barack Obama, in a phone call yesterday with AIM’s international trade executive Kristen Rupert and other business representatives, called for the Export-Import Bank to be reauthorized immediately.

presidentobama“Ex-Im” has provided export loans, credit, guarantees and insurance to nearly 200 small and medium size businesses in Massachusetts during the past several years.  Congress allowed the Ex-Im charter to expire on June 30, so no new export credit can be issued by the Bank.

The action puts U.S. exporters at a disadvantage versus foreign competitors, many of whom benefit from export financing provided by their own countries’ version of Ex-Im.  In fact, 85 export credit agencies in 60 different countries compete with Ex-Im.

The Export-Import Bank, which originated in the 1930s, has been reauthorized at least 16 times, most recently in 2006 and 2012.  This year, however, conservative Republicans in Congress have held up reauthorization, and Congressional leadership has so far refused to bring a reauthorization vote to the floor. 

President Obama pointed out during the conference call that the bank does not just benefit large corporations. Ninety percent of its loans go to small and medium businesses.  Support for Ex-Im is bipartisan.  And the bank actually returns money to the U.S. Treasury each year.

General Electric, a longtime AIM member, is a major Ex-Im Bank customer. Hundreds of companies in New England are GE suppliers, and many have said they will institute layoffs if Ex-Im goes away.

Other Massachusetts firms, in industry sectors ranging from food products to plastics to jewelry, have emphasized that their exports to emerging markets in Latin America, Africa and the Middle East would simply not happen without Ex-Im credit, because conventional commercial banks in the U.S. are not willing or able to take on the higher level of risk associated with these developing countries.

"Here’s why this matters," the president wrote in an Op-Ed piece in The Boston Globe yesterday.

"Over the past five years, we’ve worked hard to open new markets for our businesses, and as a result, more American goods are being sold around the world than ever before. Last year, we had record exports for the fifth straight year.

"And exports support nearly 11.7 million American jobs — 1.8 million more than when I took office — so by increasing exports, we’re helping put more Americans to work. Plus, export-supported jobs are good jobs."

What happens next?  Congress is in recess and Ex-Im supporters hope to bring a vote on the bank to the floor later in July.  Reach out today to your Congressional representative or to AIM to voice your support for Ex-Im Bank reauthorization.  Contact AIM’s Kristen Rupert at krupert@aimnet.org for further information on the Export-Import Bank.

Topics: Exports, International Trade, Export-Import Bank

Panama: It's Not Just About the Canal

Posted by Kristen Rupert on Mar 21, 2014 10:12:00 AM

panama trade with massachusetts

Earlier this week, Massachusetts governor  Deval Patrick led a trade mission of commonwealth business executives and government leaders to Panama. Despite its population of only 3.5 million, Panama plays a significant role as a hemispheric hub for the Americas. With an economy comprised primarily of services, versus manufacturing, Panama is rapidly expanding its position as the logistics and distribution center for Latin America.

Panama's growth rate is high at ten percent, outpacing other countries in the region. The economy is diverse, unemployment is low, and innovation is being embraced by business and government leaders.

Panama's greatest asset is the Panama Canal, currently being expanded to accommodate longer, heavier and larger vessels that carry cargo between the Atlantic and Pacific Oceans. Operating 24 hours per day, with 40 ships making passage daily, the Canal contributes $2 Billion annually to the Panamanian economy.

For Massachusetts companies interested in doing business in Panama, opportunities abound.  Many of the strengths of the Massachusetts economy match well with Panama's current needs, and Panamanian businesses and government leaders are eager to partner with firms from our commonwealth. Infrastructure is a key industry in Panama, where projects are underway or being launched to expand the canal, the subway system, and the main airport. Massachusetts companies are encouraged to bid on these projects. Security—of cargo, people, planes and ships—is another sector of interest. Energy conservation and retrofitting of buildings and homes to increase efficiency is a priority for Panama. And clean energy—power, water, and more—is needed in both urban and rural areas in Panama.

Ease of doing business is a hallmark of Panama. Massachusetts companies will benefit from a US dollar-based economy, prevalent English language, a safe environment, direct non-stop air service via Copa Airlines between Boston and Panama City, and a US-Panama Free Trade Agreement which means low or no tariffs. Two former US air bases near the canal have been converted into office parks: the City of Knowledge focuses on non-profit and scientific/research companies, while Howard Air Base has attracted US companies such as Dell, HP, Caterpillar and more. Several free trade zones are also available.

Like Massachusetts, Panama needs more engineers and mid-level workers.  The K-12 public education system is not working as well as it should to produce the next generation of skilled workers. Some of the discussions during this week's trade mission centered on sharing best practices in education at all levels.

Panamanians are bullish about the future. Early stage plans are already in place for the NEXT expansion of the Canal, estimated to be needed in 20-25 years. In the meantime, businesses and ports around the world, including our own Massport, are eagerly anticipating completion of the current canal expansion in late 2015.

Massachusetts firms interested in identifying business opportunities in Panama should contact AIM's Kristen Rupert, who participated in the recent trade mission, at krupert@aimnet.org.

Topics: Exports, AIM, International Trade, Govenor Patrick, Jobs, Trade Mission, Panama, Engineering

Massachusetts Seeks Business, Educational Collaboration with Brazil

Posted by Kristen Rupert on Dec 8, 2011 12:26:00 PM

Kristen Rupert, Executive Director of AIM’s International Business Council, is accompanying Governor Deval Patrick and a group of business executives and state economic development officials on an innovation economy development mission to Brazil. The following is based on her reports from the scene.

AIM BrazilMassachusetts business and political leaders spent Tuesday and Wednesday discussing science, research, financial services and other economic growth drivers with their counterparts in the sprawling city of São Paulo.

The Massachusetts delegation began its day Tuesday by visiting the São Paulo Foundation (FAPESP), the primary state agency overseeing funding of research and scholarships.  For nearly five decades, 1 percent of the State of Sao Paulo’s annual revenues have gone to FAPESP.  This $500 million annually supports thousands of scholarships and research programs in energy, biodiversity and public health.

Brazilian officials said that the commonwealth’s collaborative model, which encourages universities, corporations and government to work together to create new companies, new technologies and new discoveries, is a model they would like to duplicate in São Paulo.  Some partnerships and spin-offs already are occurring, despite the fact that venture capital is still in its infancy in Brazil.

In the afternoon, executives from AIM member companies EMC, Microsoft and Fidelity were part of a small group invited to Microsoft Brazil headquarters to meet with local technology leaders from corporations, business trade associations, and the entrepreneur community. Brazil ranks fifth globally in Internet use, tenth in broadband penetration, third in purchases of personal computers, and seventh in IT investment.   Technology jobs in São Paulo alone are approaching a million.

Huge opportunities exist in Brazil for Massachusetts companies in the IT sector.  Rapid growth of the middle class translates to increased demand for technology. Microsoft just opened, in Brazil, its first X-Box (gaming) manufacturing facility outside of China.  Brazil will host the World Cup in 2014 and the Olympics in 2016, presenting additional IT opportunities in areas such as security/authentication, health, defense, data storage, and infrastructure. Taxes on R&D and software are currently high, but the Brazilian government is studying the issue and weighing the benefits and risks of tax decreases.

São Paulo is huge city with 20 million people—the fifth largest city in the world.  It has scores of skyscrapers, lots of traffic, and a constant haze over the city because of air pollution.  São Paulo is the economic engine of Brazil, generating 34 percent of Gross Domestic Product and 45 percent of Brazil’s PhDs. 

In the evening, the trade mission delegation attended a reception, hosted by Liberty Mutual local partner Liberty Seguros, for alumni and friends of Massachusetts colleges and universities living in Brazil.  Nearly 200 alumni and friends connected with business leaders from Brazil and exchanged contact information.

On Wednesday morning, AIM and Fidelity accompanied Governor Patrick and his party to a meeting with Governor Geraldo Alckmin of São Paulo state. The art in the Governor’s Palace, ranging from folk art to murals to oils and sculpture is magnificent. The small group discussed common interests and challenges—skilled labor, improvements to K-12 and technical education, diversified industries, and innovation.  The groups also discussed opportunities for collaboration between Massachusetts and São Paulo.

Education remains an ongoing theme of the trade mission.

Brazil, with a fast-growing population and an expanding economy, needs to improve its education at all levels. Employment is keeping pace with the growth of the workforce – unemployment is very low – and technical workers especially are in short supply. There’s a system here similar to community college in United States, where students get technical degrees and go right to work. Ninety five percent get hired before graduation. 

In the afternoon session on financial services, hosted at Santander (parent of Sovereign Bank), one panelist remarked that the three most critical issues for financial services for Brazil are education, education, education.

UMass signed several agreements in the course of this mission, formalizing work that has been going on for some time.  One in Brasilia with Embrapa, the Brazilian agricultural research agency, involves collaboration with Brazilian universities to develop ways to grow foods in the US that are familiar to immigrants.  Another is an agreement regarding dual degree doctoral programs between UMass Dartmouth and the University of São Paulo.

In addition, UMass, Boston University, Harvard and Northeastern, among other institutions, will participate in the Santander-sponsored TOP USA-Massachusetts Program, which will fund seven projects per year for faculty, post-doctorate and graduate students to study at partner universities in each country.

The financial services sector in Brazil is emerging rapidly. A stable and well-capitalized banking system is an asset that makes Brazil attractive for foreign investment. It is a low-leveraged country with relatively little debt and credit, and not much of a secondary market.  The real estate sector strong – some think too strong. Asset management is growing quickly, although saving for retirement is still uncommon; that could changes as more people get into middle class.

Investment professionals see Brazil as great opportunity, with its diversity of industries, sound fiscal and debt management, oil reserves and growing middle class. Public policy changes and private sector initiatives are making the climate more attractive for foreign investment.

In addition to education, Brazil has notable needs in the area of infrastructure development, including all forms of transportation – roads, airports, trains, buses – as well as hotels and other amenities. Economic growth and the emergence of a large middle class are the long-term drivers of these needs, but they will become particularly acute as Brazil hosts the World Cup (2014) and Olympic Games (2016).

 

Topics: Exports, AIM International Business Council, Deval Patrick

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