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The U.S. Export-Import Bank invites public comment on its Economic Impact Procedures and Methodology by October 23, 2019. https://www.federalregister.gov/documents/2019/10/15/2019-22358/review-of-economic-impact-procedures-and-methodology-extension-of-comment-period

The current version of the procedures and methodology, last revised in 2013, is available at https://www.exim.gov/sites/default/files/newsreleases/Final-April-2013-Procedures.pdf   

Excerpts:

Purpose

The assignment given to the Bank in its various Economic Impact Charter mandates is to: (a) identify applications requesting Ex-Im Bank support that may be associated with subsequent “second-stage” trade flows that might adversely affect some component of U.S. industry; and (b) develop technical mechanisms and procedures which can provide an empirical framework for making extremely sensitive and highly arguable decisions as to whether the Bank should (i) support the export effort of one sector that may have subsequent “second-stage” adverse impact on another sector or (ii) simply withdraw from the export opportunity. A key consideration is that almost all the goods and services exports related to medium- and long-term applications for Bank support could be provided by foreign suppliers and supported by their export credit agencies (ECAs) if Ex-Im Bank support were unavailable. Hence, the project would go forward whether Ex-Im Bank finances it or not and any adverse impact would occur whether Ex-Im Bank supports the project or not. Thus, through the Economic Impact mandate, Congress is asking the Bank to develop explicit procedures that help the Bank decide when the second-stage repercussions are so adverse to a segment of U.S. industry (e.g., a company, plant or group of employees), that any degree of government association with new foreign production would likely be perceived as threatening the livelihood of the affected company, plant or group of employees.

Introduction

The basis for Ex-Im Bank’s Economic Impact Procedures is found in its Charter.  Congress requires Ex-Im Bank to assess whether the extension of Ex-Im Bank financing support is likely to cause substantial injury  to U.S. industry or would result in the production of substantially the same product that is the subject of specified trade measures. If Ex-Im Bank determines that a transaction meets the legislatively specified standards, then economic impact can be the basis for denial of Ex-Im Bank support.  The purposes of Ex-Im Bank’s Economic Impact Procedures (Section 1 of this document) are: 1) to ensure that all transactions are screened for economic impact implications; 2) to identify those transactions that are subject to applicable trade measures or that pose a significant risk of potentially substantial injury to the U.S. economy; and 3) to put only those cases that meet the standards through a more extensive economic impact analytical process that is fair, consistent, and publicly transparent. The Methodological Guidelines for a Detailed Economic Impact (EI) Analysis are outlined in Section 2 of this document.

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