GE executive seeks renewal of funding for Export-Import Bank

The US risks compounding the mistake it made by not joining a new China-backed Asian infrastructure bank if Republicans in Congress go through with a threat to shut down the country's export credit agency, GE's top international executive has warned.

John Rice, who oversees GE's international operations as the industrial giant's vice-chairman, told the Financial Times in an interview he believed that Washington's decision not to join the Asian Infrastructure Investment Bank as a founding member alongside China had been a mistake.

But he said he was also concerned about the current push by Republicans not to renew funding for the US Export-Import Bank, led by president Fred Hochberg, which is due to run out of money in June.

GE, alongside Boeing, is one of the main beneficiaries of Ex-Im financing.

"To opt out of AIIB and not reauthorise [the Ex-Im Bank] would send a strong signal to the rest of the world that we are not going to participate entirely," Mr Rice told the FT.

"We would be the only major economy without an export credit agency."

The Republican push to close the bank comes even as most in the party express strong support for the Obama administration's efforts to close an important trade deal with Japan and 10 other Pacific Rim economies. Republican leaders in Congress have vowed to work to quickly pass a bipartisan bill introduced last week that would give President Barack Obama the "fast-track" authority he needs from Congress to close the Trans-Pacific Partnership.

But that advance has been accompanied by the re-emergence in recent weeks of a debate over Ex-Im Bank's place in US trade policy that has divided Republicans.

While many centrists in the party support the agency's reauthorisation, conservative critics argue that it provides unneeded subsidies to big companies such as GE which can easily obtain the export financing they need from private sources.

The Obama administration narrowly avoided the shutting down of the Ex-Im Bank late last year. But a temporary extension to its funding negotiated then is due to run out in June and prominent Republicans such as Paul Ryan, the former vice presidential candidate who now chairs the powerful House Ways and Means Committee, have vowed to close the bank.

Mr Rice said the issue was crucial for GE and that if the Ex-Im Bank were to be shut down it was likely to have to shift production of gas turbines and jet engines overseas where it could take advantage of other countries' export credit agencies.

"Some of those jobs will go away if we elect to build stuff that could have been built in the United States in other countries," he said.

Hundreds of small and medium enterprises in the US supply GE and their survival in many cases depends on Ex-Im Bank helping to arrange export financing and guarantees, he added.

"The idea that Ex-Im is a fat cat support mechanism just is not true," he said.

The issue of trade is also an increasingly strategic one for the United States, Mr Rice said, with the push to finalise the TPP particularly important to solidify the country's economic influence in Asia.

"These are going to be growing, important economies," he said, and the US risked losing a battle for influence with China in the region if it failed to close the deal on the TPP.

"I don't think you have the geopolitical influence unless you have the economic influence," he said. "I think you need both."

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