The Middle East is unconcerned at the export credit agencys problems, but US will suffer
For the US Republican party, long seen as the party of big business, to take a step that harms the interests of not just major exporters, but small businesses too, is a dangerous move.
The Middle East and North Africa is easily readjusting to the Export Import Bank of the US (Exim Bank) lapse in authorisation. A multitude of export credit agencies from Europe and Asia can step in and fill the gap it has left, and support companies from their home markets.
Their continued willingness to support domestic clients means Washington politics have left American suppliers less competitive. The strong dollar will also push up their prices compared to their European and Asian counterparts. US companies will have a harder time closing sales without being able to offer Exim Bank guarantees and insurance for their clients.
Large companies such as Boeing and GE, which have historically been major beneficiaries of Exim Bank financing, will continue to have good access to finance and win orders in the region. Smaller suppliers may suffer more. End-of-year sales and exports figures will provide an interesting insight into how much the Exim Bank shutdown has really harmed American businesses in the Middle East.
A side effect could be the further erosion of US influence in the region, as Washington loses an economic tool for cooperation.
Despite heavy business lobbying, there is no guarantee that Exim Bank will be reauthorised. The influence of extreme-right libertarian politics in Washington is stronger than ever and opponents of the bank control key political positions in the US Congress. They will attempt to delay a vote on reauthorisation, which would probably pass, to make reviving Exim Bank more and more difficult.
Whatever their agenda, the result will most likely be a fall in US exports and manufacturing jobs, while the rest of the world looks on in bemusement.
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