Ex-Im operates under the authority of the Export-Import Bank Act of 1945, as amended. It is an independent agency of the U.S. government. Ex- Im’s mission is to support jobs in the United States by facilitating the export of U.S. goods and services. In fiscal year 2012, Ex-Im authorized about $35.8 billion, for 3,796 transactions, to support U.S. exports. Ex-Im is part of the U.S. Trade Promotion Coordinating Committee, an interagency committee chaired by Commerce and tasked with coordinating the export promotion and financing activities of federal agencies. Ex-Im is also a key participant in the National Export Initiative, a strategy announced in 2010 to double U.S. exports by 2015 to support U.S. employment. Ex-Im provides four types of financing: direct loans, loan guarantees, working capital guarantees, and export credit insurance. Direct loans: Medium- and long-term fixed-rate loans Ex-Im provides directly to foreign buyers of U.S. goods and services. Loan guarantees: Medium- and long-term loan guarantees to lenders that Ex-Im will pay the lender if the foreign buyer of U.S. goods and services, who received the loan, defaults. Working capital guarantees: Guarantees to lenders for U.S.-based companies to obtain short-term loans that facilitate the export of goods and services. Working capital guarantee loans may be approved for a revolving line of credit that supports multiple export sales or a single loan that supports a specific export contract. Insurance: Short- and medium-term insurance Ex-Im provides to U.S. exporters to protect them against the risk of nonpayment by foreign buyers for commercial or political reasons. To balance the interests of multiple stakeholders and Ex-Im’s mission to support U.S. jobs through export financing, Ex-Im has a domestic content policy regarding the amount of U.S. content directly associated with the goods and services exported from the United States. Ex-Im’s short-term transaction content policy requires at least 50 percent U.S. content. For medium- and long-term transactions, there is no minimum U.S. content requirement to receive a portion of financing, but Ex-Im’s support is limited to the lesser of (1) 85 percent of the total value of all eligible goods and services in the U.S. export transaction, or (2) 100 percent of the value of the domestic content in all eligible goods and services in the U.S. export transaction. To be eligible for support, goods must be shipped from the United States. Other industrial countries have their own export credit agencies. For example, the other Group of Seven (G-7) countries all have at least one export credit agency. G-7 agencies differ in the magnitude and types of their activities. All offer medium- and long-term officially supported export credits. Export credit agencies also can provide other products and services that can complicate comparisons among institutions. Ex-Im’s mission emphasizing supporting domestic jobs through exports is unique among the G-7 agencies. Ex-Im’s charter states that the bank’s objectives are to contribute to maintaining or increasing the employment of U.S. workers by financing and facilitating exports through loans, guarantees, insurance, and credits. This mission underlies certain Ex-Im policies, such as its economic impact analysis requirement and its domestic content policy. Other export credit agencies’ missions range from promoting and supporting domestic exports to securing natural resources. To estimate the number of U.S. jobs associated with the exports it helps finance, Ex-Im uses a methodology based on the input-output approach. To apply this methodology, Ex-Im uses a BLS data product, known as employment requirements tables (ERT) which are based on the input- output methodology. It is important to understand the ERT because these tables play an essential role in Ex-Im’s jobs calculation process. The ERT provide the total number of jobs (on average) supported by production in each industry. These BLS data allow Ex-Im to produce a measure that translates the value of the exports it supports in each industry into an employment estimate for that industry. In order to use the ERT, Ex-Im must rely on data from its own system. Ex-Im’s four-step process estimates the value of all the exports it supports by the industries associated with those exports. By combining data from the ERT and its own system and aggregating across industries, Ex-Im produces an estimate of the total jobs its financing supported. The methodology Ex-Im uses relies on a basic input-output approach. According to Ex-Im and Commerce officials, the basic input-output approach was designated as the standard for U.S. government agencies by the Trade Promotion Coordinating Committee and has the advantage of generating a uniform jobs calculation methodology across the federal government. The logic underlying the input-output modeling approach assumes that the production of goods and services in an economy uses inputs (such as labor) in fixed proportions. Consequently, it is possible to determine the quantity of labor required for a given level of production. To apply this methodology, Ex-Im uses the ERT, data tables created by BLS, to estimate the number of jobs associated with the specific value of exports Ex-Im supports, rather than the value of total U.S. exports. The ERT are derived from a set of data showing the relationship between industries, known as input-output tables. For researchers using an input- output approach, the ERT can be used for analyses that attempt to estimate the employment effects of exports. BLS develops the ERT so that users can analyze the job impact of various types of expenditures, such as exports. The ERT contain, for 195 industries, the number of jobs required to produce one million dollars of value in each industry (this report refers to this factor as the “jobs ratio”). Because industries may vary widely in how many jobs they support per million dollars of expenditure, it is important for Ex-Im to correctly identify the industry associated with each export transaction it finances. BLS produces two types of ERT, one that includes the employment effects of both domestic and imported production and another that removes the employment effects of imports so that only domestic production is captured. Ex-Im uses the domestic ERT to estimate the number of U.S. jobs associated with its exports. While annual versions of the ERT are produced, the most current year available as of May 2013 is 2010. Using the ERT, it is possible to obtain either the jobs supported directly in a particular industry, or in a particular industry plus the industries that support its production. For example, construction directly supports jobs in the construction industry but also indirectly supports jobs in industries that supply the material necessary for construction, such as the steel industry. Ex-Im uses the value that also includes employment in supporting industries, which produces a larger jobs ratio. Sometimes this larger estimate is called the “direct plus indirect effect” or “supply chain.” Ex-Im’s process for using the ERT has four steps. First, it determines the industry associated with each transaction. In some cases, there could be multiple industries associated with a transaction, if Ex-Im financed multiple products in the transaction. Second, it determines the total value of exports Ex-Im supports for each industry. Third, it multiplies these export values by BLS’s jobs ratio for each industry to obtain the jobs for that industry. Finally, it aggregates across all industries to produce an overall estimate. Figure 1 depicts each step of the process. In step 1, Ex-Im either uses the industry code provided by the applicant (the exporter or the lender) or relies on its engineers (whom Ex-Im considers its in-house industry experts) to identify the appropriate North American Industry Classification System (NAICS) code for the contracts associated with each transaction Ex-Im finances or supports. Ex-Im translates its data on transactions into the same industry groups (i.e., NAICS-based codes) used by BLS. The method by which Ex-Im obtains the NAICS code varies by length of repayment term. For short- and medium-term financing and working capital credit, the applicant (either the exporter or the lender) provides the NAICS code. For long-term financing, Ex-Im engineers work with the exporters and project sponsor to determine the NAICS code. According to Ex-Im officials, to verify and assign NAICS codes in long-term financing, Ex-Im uses both the guidance provided by the codebook for assigning NAICS codes and the experience of the engineer. In step 2, Ex-Im estimates a dollar value of exports it supports, referred to as the export value. It does this for each transaction it finances. However, according to Ex-Im officials, because Ex-Im provides different types of financial products, it uses two different methods to determine the export values. 1. For some financial products, such as direct loans and loan guarantees, Ex-Im determines the export value after authorization— but before disbursement—by using information provided on the exporter’s certificate. Specifically, Ex-Im determines the export value by using the net contract price—the aggregate price of all goods and services to be exported (i.e., U.S. content plus eligible foreign content that does not include local costs). Ex-Im includes the value of the purchase of goods and services that were financed by entities other than Ex-Im. In other words, the export value is the value of exports in purchase orders that were at least partially financed by Ex-Im. According to Ex-Im officials, they generally provided approximately 83 percent of the financing for medium and long-term transactions for fiscal year 2010 through fiscal year 2012. 2.