As Congress gears up to debate whether or not to recharter the U.S. Export Import Bank, banks have launched what they think could be a last-ditch campaign to save the trade finance agency and other export finance programs.

Bankers who met here this week for the annual conference of the Bankers' Association for Foreign Trade argued that government financial assistance and loan guarantees constitute a vital component of trade finance for small and medium-size businesses.

Without such assistance, they added, both banks and their customers could be shut out of rapidly growing but risky overseas markets.

"This issue is a prime concern to us," said Richard P. Ferris, Norwest Corp.'s executive vice president for international banking. "The small and medium-size businesses are our largest customer base, and exports are their fastest-growing sector."

Added Thomas L. Farmer, general counsel of BAFT, "U.S. banks and businesses are only just beginning to make the transition from a continental to a global economy." He said that federal assistance packages "are small but extremely critical bolts, and removing them would have a large impact."

The House Banking Committee's panel on domestic and international monetary policy is scheduled today to decide whether to recommend renewing the charters of the Export Import Bank and the Overseas Private Investment Corp., another trade agency.

The future of the Trade and Development Agency is also in doubt. Last year alone the Export Import Bank helped finance or support financing for $14.6 billion in U.S. exports.

Although most major exporting countries sponsor even larger government- subsidized trade programs, opposition to renewing both charters has been mounting steadily in Congress.

The opposition has stemmed from efforts to reduce the budget deficit along with ideological opposition to programs that assist corporations dubbed "corporate welfare."

Bankers speaking at the conference expressed frustration with Congress.

"Congress does not really understand what the Ex-Im Bank does," said John B. McCoy, chairman of Banc One Corp., Columbus, Ohio. "I would suggest that we need to spend some time working with them and their staff."

Added Gerry B. Cameron, chairman of Portland, Ore.-based U.S. Bancorp, "We would like to see these programs continue."

Approximately 300 banks in the United States offer basic international banking services such as letters of credit and collections,). Twenty to 30 offer a complete range of trade finance credit products.

Bankers attending the conference emphasized that exports have been a major catalyst to economic growth in this country, rising an average of 10% in 1994 and 1995 compared to only a 3% rise in the U.S. gross domestic product.

They emphasized that over one third of annual merchandise exports over the same period was generated by small and medium-size companies, which are the most dependent on government programs that help reduce export risk.

They warned that if government financial assistance and guarantees were eliminated, many export-related transactions by companies that are new to global markets would simply not get done.

In testimony presented last week before the House Banking Committee, Mr. Ferris warned that "as profit margins erode, banks have been forced to reevaluate expanding their export finance business.

"Government programs such as those offered by Ex-Im Bank become more critical as banks seek financing alternatives that meet the trade need of their commercial customers" without exposing the bank to high levels of political risk, he said.

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