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The chairman of US Exim, Fred Hochberg, speaks to Michael Turner about the importance of US exports and how growth will be found in 2011.

The Export-Import Bank of the United States’ (US Exim) annual conference, this year titled Government at the Speed of Business, helps to outline new trends in trade and export, as well as providing attendees the opportunity to network with each other to solidify business relationships or start new negotiations.

GTR speaks with US Exim president and chairman Fred Hochberg ahead of the conference to get an idea of key areas of development for the year, and what essential experiences were taken from 2010.

GTR: Is President Obama’s national export initiative still on track?

Hochberg: Our exports in 2010 over 2009 are up 16.8%, so we are moving in the right direction. We’ve got a good running start on that, and that’s a very positive sign.

I think that the president talked about exports twice in the State of the Union address. The president makes that speech each year and there are many competing things that are trying to get a focus and highlighted in the State of Union. The fact that exports have been central to both speeches is an indication that this is a serious enterprise for the US government.

We started 2011 with a very strong year. This is a clear indication, and it’s certainly my view, that the only way we are going to grow the US economy is through exports. Exports are central towards a strong US economy and frankly, a strong US economy is also important globally.

GTR: What products have been released to help achieve this?

Hochberg: One of the things that we just launched is called Global Access to Small Business and it is designed to help small companies have access to foreign markets.

The ECGD (the UK’s export credit agency) is now setting up short-term goals to help small businesses and we think this is a good thing. We have been doing this for a long time. President Obama has put a high focus on this and I’m always happy to see other countries, including Britain, embrace this.

I’d like to believe that some of our colleagues in other countries give importance to small business but we’ve maybe given it a more full-throated approach. We’ve come up with better programmes, better products and a faster service for our small businesses.

We have also, on behalf of a bid that General Electric (GE) is making in Pakistan, notified the OECD that we are offering financing terms on that particular transaction that match the Chinese financing terms. We don’t want financing to ever stand in the way of exports. We have the ability to match the non OECD-compliant offers, and that’s a major policy change.

This gives a signal globally that if an exporter feels that the reason they’re not going to get a deal is because the OECD’s financing is higher than what’s offered by another country – China, or any other country that is not a member – we’ll be able to match it. That’s an important signal to send to exporters.

GTR: US Exim took a lot of criticism from lobby groups over a Reliance Power deal, and appeared to do a complete reversal over its stance, first refusing and then agreeing to back the project. What did this experience mean to the bank?

Hochberg: I would characterise it differently. I think from a global perspective, there’s an understanding that as the developing world and emerging economies are adding power, they have to look at a wide portfolio and renewable, hydro, nuclear, fossil fuels all need to come into play.

The focus now is that the only thing that should be built is renewable. But it’s not going to help countries that need to power up.

We’re all in this together and we would like our colleagues in other ECAs to do the same so that we can look at the  any other project within the same prism.”

In this particular transaction, Reliance’s proposals were rejected by the board. Reliance then improved their proposal and it was only down to this improved proposal that we were able to approve the project.

The proposal was changed by adding a renewable energy portion to the transaction. Secondly, Reliance agreed to cap the carbon emissions at a level that we had set as the ceiling. Above that level we require an offset to a level that will stay within that ceiling. To me, that was a victory that we would have not gotten otherwise; a strong commitment to renewable energy, coupled with engineering and operational efficiencies that make sure the plant runs at a more acceptable level.

In the US we have a carbon policy; we track how much carbon output any financing project from US Ex-Im produces and we quote it on our website. We’re all in this together and we would like our colleagues in other ECAs to do the same so that we can look at the Reliance project, or any other project, within the same prism.

That’s a real change that I’m hoping we can get through international, multilateral discussion.

GTR: Looking ahead, which markets will provide US Exim with the most business in 2011?

Hochberg: Larger companies typically have a little more emphasis on infrastructure, and so their markets are slightly different than those for smaller companies. For the larger companies, we’ve identified nine key markets, and these markets are countries with large, growing economies, with a large appetite for infrastructure and places where our financing can make a difference.

They are India, Vietnam, Indonesia, Mexico, Columbia, Brazil, Turkey, Nigeria and South Africa.

These countries offer a real spread. We’re putting a lot of interest in power and rail in South Africa. India is growing at a rapid rate. Columbia is one of our largest markets right now.

However, I was in Saudi Arabia and the UAE recently and I would say that region would be an additional market. We haven’t made it one of our main targets right now, but there’s been a lot of business in Saudi Arabia, and a lot of business in the UAE. GTR