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2020 Report to the U.S. Congress on Global Export Credit Competition for Calendar Year 2019

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2020 Report to the U.S. Congress on Global Export Credit Competition for Calendar Year 2019 REPORT TO THE U.S. CONGRESS ON GLOBAL EXPORT CREDIT COMPETITION June 2021 For the period January 1, 2020 through December 31, 2020 Responding to Challenges of COVID-19 in 2020 EXIM Vision Keeping America Strong: Empowering U.S. Businesses and Workers to Compete Globally Table of Contents Board of Directors and Advisory Committee Status ........................................................................................................2 From the First Vice President and Vice Chairman (Acting) .............................................................................................3 EXIM 2020-2021 Advisory Committee Statement on the EXIM Competitiveness Report ................................6 2020-2021 EXIM Advisory Committee Members .......................................................................................................... 15 2020-2021 EXIM Chairman's Council on China Competition Members .................................................................. 16 2020-2021 EXIM Sub-Saharan Africa Advisory Committee Members ...................................................................17 Executive Summary .................................................................................................................................................................. 18 Introduction ................................................................................................................................................................................. 21 Section A: Trends in Official Medium- and Long-term (MLT) Export and Trade-related Activity ............ 24 Chapter 1: OECD and non-OECD Official MLT Export and Trade-related Activity in 2020 ................... 25 Chapter 2: The Official Export Finance Market’s Response to COVID-19 ................................................... 38 Chapter 3: Emerging Trends in Export Finance .................................................................................................... 45 Section B: Exporter and Lender Views ............................................................................................................. 54 Section C: Appendices ........................................................................................................................................ 59 Appendix A: Primer on EXIM and Official MLT Export and Trade-related Finance .................................. 60 Appendix B: EXIM Actions to Provide Competitive Financing and to Minimize Competition in Government-supported Export Financing ............................................................................................................. 62 Appendix C: Purpose of EXIM Transactions ..........................................................................................................64 Appendix D: Equal Access for U.S. Insurance ........................................................................................................ 66 Appendix E: Tied Aid Credit Program and Fund ................................................................................................... 67 Appendix F: Co-financing ............................................................................................................................................. 71 Appendix G: Renewable-Energy Exports and Environmental Policy ........................................................... 73 Appendix H: Services Exports .................................................................................................................................... 77 Appendix I: Size of EXIM Program Account ........................................................................................................... 78 Appendix J: Export Finance Cases Not in Compliance with the Arrangement .......................................... 79 Appendix K: Activities Not Consistent with the WTO Agreement on Subsidies and Countervailing Measures .................................................................................................................80 Appendix L: U.S.-Flag Shipping Requirement........................................................................................................ 81 Appendix M: Trade Promotion Coordinating Committee .................................................................................. 83 Appendix N: List of Known Official Export Credit Providers ............................................................................ 86 Glossary ............................................................................................................................................................... 90 Acronyms and Abbreviations ............................................................................................................................ 92 2020 EXIM COMPETITIVENESS REPORT | 1 Board of Directors and Advisory Committee Status Board of Directors and Advisory Committee Status Advisory Committee Status Section 3(d)(4) of EXIM’s Charter calls for EXIM’s June 2021 Advisory Committee to submit to Congress comments on the findings of the Competitiveness Report.1 Board of Directors In September 2020, EXIM’s Board of Directors Mr. James C. Cruse appointed the 2020-2021 Advisory Committee, as First Vice President and Vice Chairman (Acting) well as the 2020-2021 Sub-Saharan Africa Advisory Committee. The Advisory Committee and the Sub- The Honorable Spencer Bachus III Saharan African Advisory Committee held their first Member of the Board of Directors meetings on September 29, 2020, and November The Honorable Judith D. Pryor 18, 2020, respectively. In accordance with EXIM’s Member of the Board of Directors Charter, the following pages contain the statement of the 2020-2021 Advisory Committee on the 2020 The Honorable Gina Raimondo Competitiveness Report. U.S. Secretary of Commerce, Board Member, ex officio The Honorable Katherine C. Tai U.S. Trade Representative, Board Member, ex officio 1 12 U.S.C. §635 a(d)4 2 | EXIM.GOV From the First Vice President and Vice Chairman (Acting) In accordance with the Charter of the Export-Import Bank of the United States (EXIM), I am pleased to submit EXIM’s June 2021 Report to the U.S. Congress on Global Export Credit Competition (Competitiveness Report), a worldwide survey of official medium- and long-term (MLT) export credit provided between January 1 and December 31, 2020, and an account of U.S. exporter and lender experiences with EXIM during that period. Calendar year 2020 was the first complete year that EXIM was fully operational following its historic seven-year reauthorization that was signed into law on December 20, 2019. The reauthorization followed a nearly four-year hiatus in the agency’s history in which there was either a lapse in EXIM’s operating authority to conduct new export credit business (July 2015 to December 2015) and/or a lack of a quorum on EXIM’s Board of Directors (July 2015 to May 2019). During that period, these limitations to the agency’s operating capacity severely hindered EXIM’s ability to support the competitiveness of U.S. exporters. In 2020, EXIM’s dedicated staff, participating commercial lenders, and other export-finance partners made significant progress in restoring the agency’s leadership in the MLT export credit arena, even while the COVID-19 pandemic upended exports and trade in every corner of the world. For example, EXIM implemented several reforms from the 2019 congressional reauthorization package, including expanding support for and engagement with small businesses, renewable-energy projects, and minority- and women-owned businesses. Additionally, EXIM introduced domestic content flexibilities for the Program on China and Transformational Exports. In December 2020, EXIM’s board unanimously authorized a new content policy, of at least 51 percent with the potential to be even lower, for the program’s 10 transformational export areas. EXIM’s users found this action to be critically important as a signal of the long-advocated revitalization of EXIM. As a result, at the end of the year, EXIM authorized $1.8 billion in support for U.S. exporters and their workers, and EXIM ranked 13th among the major providers of officially supported export credits. Although still low by historical standards, this ranking demonstrates a strong return of the agency to MLT financing after several years of near total absence, and the steps taken laid an important foundation for this next chapter in the agency’s history. Within the official export credit market, total volumes of official MLT export credit support were down across the globe, including those provided by the world’s largest export credit provider, China. The COVID-19 pandemic was a prime contributor to both the noticeable drop in MLT activity by global export credit agencies (ECAs) and the significant increases in short-term and working capital support to domestic industries. In response to their collapsing economics, many governments called on their ECAs to serve as a tool to help boost economic growth at home. 2020 EXIM COMPETITIVENESS REPORT | 3 From the First Vice President and Vice Chairman (Acting) Another key emerging trend and driver in 2020 was the emergence of sustainable finance as a focus of ECA support. As governments around the world strengthen efforts to fight climate change and support companies driving innovation within the global energy transition, many ECAs made efforts to prepare for greener portfolios and to restrict new commitments for carbon-intensive projects. For example, several ECAs became more flexible
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