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Export-Import Bank Back in Business

Posted by Kristen Rupert on Dec 17, 2015 4:14:42 PM

The U.S. Export-Import Bank re-opened for business two weeks ago after being sidelined since June 30 because of a political battle in Washington.  

international.flagssmall.jpgAll nine members of the Massachusetts House delegation, along with Senator Edward Markey, voted their approval this month to reauthorize the Bank.  Congress had allowed Ex-Im Bank’s charter to lapse in June, despite the fact that the bank has provided export financing to large and small U.S. businesses without controversy for more than 80 years.  Since 2013, Congressional conservatives have criticized the bank as a symbol of big government and corporate welfare and targeted it for elimination. 

Thanks to a series of unusual legal maneuvers by bipartisan members of Congress this fall, legislation to reauthorize the bank got back on track.  The recent Highway Bill, also called the FAST Act, included language to get Ex-Im back up and running.  President Obama signed the legislation on December 4.

Hundreds of Massachusetts manufacturers have used Ex-Im Bank financing for loan guarantees, to ensure payment from new overseas customers, and for various types of export insurance.  These Bay State clients make everything from heavy machinery to police badges to bicycles to technology products.  Between 50 and 75 companies in Massachusetts access Ex-Im financing each year.

The recent five-month hiatus of the Ex-Im Bank created difficulties for Massachusetts firms.  Some companies put pending deals on hold; other firms sought alternative financing that was more costly than Ex-Im; still others let plans to enter emerging markets lapse until the fate of the bank was known.    

The good news is that the U.S. Export-Import Bank is now making new loan commitments and helping exporters across the U.S. enter new markets and expand their customer base.  Massachusetts firms interested in pursuing Ex-Im financing should contact Ex-Im’s Gregory Smith, Regional Director, Eastern Region, at Gregory.smith@exim.gov, or visit www.exim.gov.

Topics: Massachusetts Exports, International Trade, Export-Import Bank

AIM Companies View Opportunities in Brazil's Energy Sector

Posted by Kristen Rupert on Dec 6, 2011 9:40:00 AM

Several AIM-member companies met yesterday with Brazil’s energy secretary as electricity and education dominated the first day of the Massachusetts trade mission to the world’s seventh largest economy.

BrazilExecutives from Madico of Woburn, Heat Trace Products of Leominster, and Woods Hole Oceanographic Institute spent a portion of the day meeting in Brasilia with Edson Lobao, Brazil’s Secretary of Education and Mines. Labao and other officials say that Brazil’s five percent economic growth rate is expected to double the country’s need for electric capacity in the next decade.

Brazil shares with Massachusetts the goal of moving to renewable sources of power, but the transition has so far been a slow one.

In the meantime, newly discovered oil reserves offshore represent a potential economic bonanza for Brazil and its trading partners. Officials say that plans to extract the oil offer great opportunities for US companies that can provide drilling equipment, monitoring equipment, spillage protection, pipes and other products.

Thomas Shannon, US Ambassador to Brazil, told the delegation that Brazil is "open for business" and positively inclined toward Massachusetts. Governor Deval Patrick has also stressed throughout his South American trip that Massachusetts and Brazil have much in common and are already major trading partners, with the Bay State sending $396 million worth of manufactured goods to Brazil last year.

Brazil’s policy of social inclusion – using economic growth to raise people from poverty to the middleclass – is likely to expand that trading relationship. Officials say the nation is in desperate need of "more of everything," from skilled workers to infrastructure to research-and-development investment as it becomes one of the world’s developing economic powers.

Another potential boon for Massachusetts and its strong base of universities is a plan by the Brazilian government to send, and pay for, 100,000 students to study abroad over next five years. Details are still being developed.

Notes:

Cultural exchange - At a press conference with Brazilian Senate President and Governor Patrick, the hosts ended the session by presenting the governor with a “special song” and piped the 1967 Bee Gees tune Massachusetts through the loudspeakers.

You don’t see this on Beacon Hill - At 6 p.m., an honor guard of nine Brazilian soldiers in dress uniform marched in formation in front of the presidential palace to lower the flags. As the Brazilian flag came down, and a soldier played the Brazilian version of taps, an ostrich walked across the lawn of the palace and drank out of the reflecting pool right next to the flagpoles.

Topics: Massachusetts Exports, International Trade, AIM International Business Council

Korea Free-Trade Agreement Would Boost Massachusetts Exports

Posted by Kristen Rupert on Mar 16, 2011 10:08:00 AM

A pending free-trade agreement between the United States and Korea would increase U.S. exports by $10-$11 billion annually to a nation that has become Massachusetts’ ninth largest trading partner, two trade experts told the AIM International Business Council recently.

Massachusetts ExportsWon-Kyong Kim, Counselor for Economic Affairs at the Korean Embassy in Washington, and Sean Connell, Director for Japan and Korea in the International Division of US Chamber of Commerce, said the free-trade agreement under consideration in Congress would eliminate tariffs within four years on 96 percent of US goods shipped to Korea.  That would match a similar agreement between Korea and the European Union scheduled to take effect on July 1.

The Korea/US trade agreement enjoys broad support in Congress, where senators Scott Brown and John Kerry both support the deal. But prospects for passage dimmed this week when some lawmakers threatened to block the agreement with Korea if Congress does not simultaneously take up more controversial proposed trade alliances with Colombia and Panama.

“I made it clear to Assistant Secretary of State Valenzuela that there would be an effort to defeat the South Korea Free Trade Agreement if there was not similar progress on Colombia and Panama,” Florida Republican U.S. Rep. David Rivera said on Tuesday. “The Obama administration is calling for quick passage of the free-trade agreement with South Korea while ignoring long-pending agreements with Colombia and Panama.” 

Kim and Connell spoke to an audience several dozen Massachusetts executives from companies such as Raytheon, Doble Engineering, Sovereign Bank, Morrissey & Co., Dresser Inc., Flow Technologies and Hagan & Co.

Exports from Massachusetts to Korea, the two experts said, increased 43 percent during 2010 to $900 million. Boston also receives significant economic benefit from some of the 200,000 Korean students currently studying at American colleges and universities.

The proposed free-trade agreement would eliminate tariffs that average 11.2 percent for US goods going to Korea and 3.7 percent on US imports of Korean goods. The agreement would be particularly good for the US service sector, including financial services, telecom, broadcast, express delivery and legal services (currently US law firms cannot establish offices in Korea.)  Non-tariff barriers will also be eliminated.

The bottom line: a $10 billion-$12 billion jump in gross domestic product and creation of at least 70,000 jobs.

Topics: Massachusetts Exports, AIM International Business Council

Massachusetts Exports Increase, But at Half the National Rate

Posted by Andre Mayer on Feb 15, 2011 10:11:00 AM

A recovering economy boosted Massachusetts merchandise exports to their second highest level ever during 2010, but the commonwealth lost ground to other states as the rate of growth was only half that of the nation as a whole.

Massachusetts ExportsMassachusetts merchandise exports rose 11.3 percent in 2010 to $26.26 billion while exports rose nationally by 21 percent. The Massachusetts export figure trailed only the record $28.37 billion that Bay State employers sent overseas in 2008. 
 
Instruments were the state’s leading export industry for a sixth straight year at $5.3 billion, followed by industrial machinery at $4.6 billion and electric machinery at $4.5 billion. All three sectors benefited as business investment picked up worldwide, with demand for industrial machinery up 46 percent.

Precious metals tailed off somewhat to $2.6 billion and pharmaceutical products held at $2.1 billion after a weak start.  Plastics rejoined the billion-dollar list at $1.3 billion in foreign sales.  The six top industries accounted for some 78 percent of total state merchandise exports.

Repeating as the top export market for Massachusetts products in 2010 was the United Kingdom ($3.2 billion), which edged out Canada ($3.2 billion). The rest of the top 10 included China ($2.2 billion), Japan ($2.0 billion), Germany ($1.8 billion), the Netherlands ($1.7 billion), Mexico ($1.3 billion), Taiwan ($905 million), Korea ($892 million) and Hong Kong ($669 million). The next 10 markets were France, Singapore, Italy, Ireland, Switzerland, Belgium, Malaysia, Brazil, Australia and India.

The 10 largest markets accounted for more than 68 percent of Massachusetts merchandise exports (down from 71 percent in 2009), the 20 largest almost 85 percent.

“The ‘two-speed recovery’ with much stronger growth in developing economies than in mature ones is clearly accelerating export activity into emerging markets,” noted Kristin Rupert, executive director of AIM’s International Business Council.  “Sales to China were up nearly 60 percent last year.  Half of our top 10 export markets are now in Asia, and five continents are represented among our top 20 markets.” 

Export figures are prepared by the World Institute for Social and Economic Research (WISER). The Export Index is prepared by AIM Research.

Topics: Massachusetts Exports, Associated Industries of Massachusetts, AIM

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