Issue link: http://winesandvines.uberflip.com/i/400294
20 W i n e s & V i n e s n O V e M B e R 2 0 1 4 N O V E M B E R N E W S O lympia, Wash.—Wineries are breathing a sigh of relief—but not quite breathing easy—over a decision to revisit the fate of the 80-year-old Export-Import Bank of the United States next summer. Congress had been mulling a proposal to terminate its authorization for the bank, which provides export credit insurance and other assistance to companies engaged in in- ternational trade. This support gives wineries and other companies the confidence to pursue export opportunities without fear of being stiffed. The debts of foreign buyers who default on payment to an insured exporter pass to the fed- eral government, which has a lot more clout to secure repayment than most small businesses. The bank's insurance portfolio totals $9.1 billion, or 8% of its over- all program budget. Of this, $2.8 billion in insurance was authorized to small businesses in 2013—approximately half of all export-credit authorizations for the year. While critics on both sides of Congress have sought to end the bank's mandate on the grounds that it subsidizes businesses that don't need the help, the bank returned $1.06 billion to the U.S. Treasury last year. "I can't even fathom the argument to pull the plug on this thing," said Marty Clubb, president of L'Ecole No. 41 Winery in Lowden, Wash. For L'Ecole No. 41, export-credit insurance helps safeguard the family- run business' investments in overseas markets. Clubb says that buying insurance is a small price to pay to establish new trade relationships. "The risk of non-payment is a substantial risk," Clubb told Wines & Vines. "This pro- gram has been in place a long time, helping hundreds of small businesses." While the wine industry hasn't been a major purchaser of export-credit insurance, Clubb said that's because most of the state's wineries simply don't have the volumes to regularly ship overseas—yet. U.S. wine exports totaled $1.6 billion in 2013, and according to Clubb, "There's going to be more and more wineries looking at exporting, and this is a perfect tool for those wineries." Better yet, he said, the wine industry has typically represented a good risk for the bank—and for taxpayers. While lawmakers extended the bank's mandate through June 2015, the war for its survival isn't over. "It needs to have a long-term authoriza- tion," said Jason Hagey of the Association of Washington Business. Clubb is blunt with his dissatisfaction. "I don't like the nine-month extension, because it just looks to me like another way to kill it down the road," he said. —Peter Mitham Reprieve for Export Insurance Program "There's going to be more and more wineries looking at exporting, and this is a perfect tool for those wineries." Marty Clubb, L'ecole no. 41 Winery N O V E M B E R N E W S