High Global Trade Drama at 40,000 Feet

High Global Trade Drama at 40,000 Feet

William Laraque

Managing Director at US-International Trade Services

Views 366

High Global Trade Drama at 40,000 Feet

25.04.2016 02:30 pm
In a development filled with irony, Airbus intends to create an assembly facility in Mobile, Alabama. Why is this ironic? Because Senator Shelby of Alabama has been the chief obstacle to US Ex-Im "turning all of its lights on," to use Jonathan Bell of TXF's analogy. 

The WSJ announced that 

"Airbus Group's new factory in Mobile, Alabama, will open the company up to an unlikely source of financing: The Export-Import Bank of the United States (US Ex-Im). 

This WSJ article is premature and naive of course because until president Obama's nominee to the US Ex-Im board is approved by Congress, the quorum which authorizes the U.S. Export Credit Agency (Ex-Im) to lend more than $10 million to one exporter, will not exist. Senator Shelby has stated publicly that he will not approve the president's superbly qualified nominee to the Ex-Im board. The U.S. Congress constitutes an existential threat to the creation of jobs in the U.S. Senator Shelby is an existential threat to the creation of jobs in the state he "represents." Representation is perhaps too strong a term for a body where two persons represent the entire population of each state. Government by fiat or despotism may be more appropriate terms. I wonder what our founding fathers would think of what can only be considered economic stupidity on such a global scale?

Irony turns to drama as one considers what I call the "capital market gambit" of this development  for 2 reasons. First, whereas such European export insurance companies as Atradius, Euler-Hermes and Coface have offices in the U.S. and are "free to roam about the country," US Ex-Im has no similar facilities in Europe or anywhere other than in the U.S. Secondly and perhaps more importantly, such European companies as Spanish Abengoa and German Siemens, as Angela Merkel pointed out, have located facilities in the U.S. They have located in the U.S. in order to take advantage of US Ex-Im financing.

Latest blogs

Alex Malyshev SDK.finance

The Biggest Danger to Branchless Banking

With a third of the global population on lockdown and scores of bank branches closed, many are convinced that branch banking is dead, and the future is branchless. Is this really true? Branchless alternatives like Revolut, N26, Monzo, and NuBank Read more »

Dima Feldman and Aviv Castro Altair Semiconductor, a Sony Group Company

Constantly tracking anything, anywhere

The internet of things is changing the shape of many businesses. Not only does the IoT herald in greater visibility of production asset effectiveness, improve operational efficiencies, and facilitate more informed decision making, it is also Read more »

Francesca Campanelli Axyon AI

How Fund Managers Can Use AI to Retain Current Investors and Rebuild Client Confidence

After months of market volatility and challenging conditions, fund managers are starting to see a light at the end of the Covid-19 tunnel. Countries are starting to relax their lockdown measures and restart economies, with stock markets reacting Read more »

N/A ReliaMax

College Dreams? Here’s How to Get Accepted

Higher education in the United States is not just about getting accepted, it is about where you get accepted. Sure, there are options, there are seemingly endless options - from community colleges to Ivy League schools and everything in between. The Read more »

Bobby Gill GCWealth

Bobby Gill: 3 Ways Fintech is Helping Small Businesses During the Pandemic

Image Source: Pixabay. Back in April, the US oil prices sank to a 20-year low. In the UK, road traffic levels hit a 70-year low. Worldwide, due to lockdown, retail, travel, and restaurant bookings have dropped by 85%. More than 430 million Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel