EXPORT-IMPORT BANK OF THE UNITED STATES + + + + + ADVISORY COMMITTEE + + + + + MEETING + + + + + MONDAY DECEMBER 12, 2022 + + + + + The Advisory Committee convened in the Forum Room at the Omni Shoreham Hotel, 2500 Calvert Street NW, Washington, D.C., at 4:15 p.m. EST, Heidi Heitkamp, Advisory Committee Chair, presiding. BOARD MEMBERS PRESENT RETA JO LEWIS, President and Chair OWEN HERRNSTADT, Member ADVISORY COMMITTEE MEMBERS HEIDI HEITKAMP, Chair ALONZO FULGHAM MAURICIO GONZALEZ DENNY HECK LISA-MARIE MONSANTO DANIEL PINHO KATHY ROTH-DOUQUET ARCHANA SHARMA VENKEE SHARMA ELIAS ZEWDE STAFF PRESENT SCOTT CONDREN, Senior Policy Analyst, Office of Policy Analysis and International Relations JIM CRUSE, Senior Vice President, Office of Policy Analysis and International Relations STEPHANIE DEATHERAGE, Deputy SVP, Office of Policy Analysis and International Relations DAVID FIORE, VP, Transportation Division ALSO PRESENT JEAN-BAPTISTE PIETTE, Head of Export & Agency Finance Americas, Santander JENNA BARZELAY, Executive Director, Export & Agency Finance, Santander CLAIRE WANG, Senior Policy Advisor, Office of Special Presidential Envoy for Climate JESSE YOUNG, Senior Advisor, Office of Special Presidential Envoy for Climate CONTENTS Welcome Remarks 4 A Conversation with SPEC: Administration Priorities on Climate 22 Make More in America: Revitalizing American Industry and Employment 51 Open Discussion 82 Public Comment 109 Closing Remarks 109 Adjournment 104 P-R-O-C-E-E-D-I-N-G-S 3:57 p.m. EXIM CHAIR LEWIS: While we wait on the White House and State Department team that's going to come and kind of give you all kind of like the lay of the land, we're really honored that all of you have joined us in this endeavor as our statutorily Advisory Committee. This is the committee that all of the committees roll up under with the exception of Africa. Africa is also statutorily driven. And so our senator is going to tell you a whole lot more about your work here. But I could not be more excited about the members who are returning and the members who are new and the members of the talent that you all are able to bring for EXIM Bank. As they say, we need you and we have our team here -- Jim, Stephanie, David, and then David Fiore from Transportation. Who else is in here from EXIM? Chris -- Scott -- oh, hey, Scott. MS. DEATHERAGE: Director Herrnstadt. (Simultaneous speaking.) EXIM CHAIR LEWIS: -- but we had very good meetings, one with Labor and one with Friends of the Earth and the environmental groups. So we're going to hear, I guess, our teams talk about that. These are some very, very key stakeholders. We are so excited that many of the bankers who cover the renewables area is going to be on some panels. And we also have the president of the AFL-CIO. She's going to bring us a message. She could not be here because she's in -- she just left for Europe and that's really important. But, you know, we have our two seasoned officials here in terms of the lieutenant governor and our senator that can help us. So I have Celeste, and who's here? MS. DEATHERAGE: Claire Wang and Jesse. EXIM CHAIR LEWIS: Oh, Claire. Claire and Jesse. Oh, Claire and Jesse. Come on up here, Claire and Jesse. Let's get you a seat over here. I was just saying -- why don't you all sit -- yeah. I could not be more ecstatic to have the relationship that we have with -- we call it SPEC so it's really the Special Envoy for Climate, Secretary Kerry, and the White House national security and economic team as we deal with these kinds of large issues that impact EXIM and we thought it was really important, especially after this whole climate that we just all came from to be able to have them here with us. We were with them in Egypt and announced some really, really, I think, some groundbreaking things for EXIM and none of it could be done without having the direct relationship and collaboration that I think we have at the White House and that we have with the State Department, Energy Department, and all of those. They represent the Secretary, Secretary Kerry -- Special Envoy Kerry. And so with that, I'm going to turn it over to our senator on the lead because I'm a part of the delegation and I've got to go do some more work for getting ready for tomorrow, Wednesday, and Friday. But with that, Senator, I'm going to leave Claire and Jesse in your much capable hands. CHAIR HEITKAMP: Thank you, Chair Lewis. Thank you. (Applause.) (Whereupon, the above-entitled matter went off the record at 4:01 p.m. and resumed at 4:14 p.m.) CHAIR HEITKAMP: Okay. Well, I'm going to just go ahead and gavel in. I'm going to forego welcoming remarks. But I want to do so -- I want to -- we did this last time around when I chaired my first Advisory Board meeting. I want to get to know you. I mean, you already heard me talk in there. You don't need to know anything more about me. But I really want you to answer two questions. Number one, why are you volunteering for this and what do you hope happens? And please keep it within about 20, 30 seconds because we have got a big agenda and we have got folks who are waiting to get on the agenda. So we'll start with Mr. President, Donnie -- Donnie -- Denny Heck. MEMBER HECK: Thank you. CHAIR HEITKAMP: Donnie -- Mr. President Donnie here. MEMBER HECK: Thank you, Nancy. (Laughter.) I am here because I care passionately about the success of the EXIM and what I hope is that as we are now reemerging from the dark era and becoming more robust that the Advisory Council can help shape that to its fullest possible self. CHAIR HEITKAMP: Okay. And introduce yourself, what you do. MEMBER GONZALEZ: My name is Mauricio Gonzalez. I'm the head of export finance out of America BNP Paribas. The Paribas is a finance lender in ECA financing. I'm, hopefully, here to bring expertise across the board on ECA financing globally and what I would like also to see is the U.S. EXIM Bank regain its leadership in the ECA business. CHAIR HEITKAMP: Great. Alonzo? MEMBER FULGHAM: Alonzo Fulgham, ditto. I've spent quite a bit of my career in government at the senior level. I want to see us drive change and investment in U.S. exports. It's all about jobs, jobs, jobs, and I think we're missing a golden opportunity to integrate all of our national elements of national interest to bring them together to really make this happen, and I love the energy that the chairman and Senator Heitkamp have brought to this. I think we could do some great things together over the next year. CHAIR HEITKAMP: Great. Thank you. MEMBER ROTH-DOUQUET: Kathy Roth-Douquet. I'm the CEO of Blue Star Families, which is now the nation's largest nonprofit supporting military and veteran families. I also convene a group of other nonprofits in the veteran and military support space so and getting the opportunity to work with EXIM Bank out to the veteran community is what I'm here to help with. CHAIR HEITKAMP: Terrific. MEMBER V. SHARMA: Venkee Sharma, Aquatech. We're water technology, passionate about seeing the EXIM Bank and its mission succeed and, you know, we, as a small business exporter, could never have been able to export over the years without it and I think that if we can find a way to make sure that we can bring the whole of government and, you know, focus on job creation, especially even in times that might now be robust domestically I think we have to keep our eye on exports. So -- CHAIR HEITKAMP: Okay. Great. MS. WANG: Hi, folks. My name is Claire Wang. I'm a Senior Policy Advisor in the Office of Special Presidential Envoy for Climate John Kerry. I'm not on the Advisory Committee. But it's clear that EXIM can and must be a key planning partner to achieve our global climate goals. Also, supporting U.S. companies will be important to the discussion. CHAIR HEITKAMP: Okay. Thank you. MR. YOUNG: Jesse Young, also on the Kerry team at the State Department as well. I look forward to joining you. MEMBER ZEWDE: I'm Elias Zewde. I'm a consulting engineer in water supply and wastewater management and I'm particularly interested in expanding EXIM's competitive advantage in Africa, particularly in Ethiopia. CHAIR HEITKAMP: Yeah. Thank you. MEMBER A. SHARMA: Hi, I'm Archana Sharma and I have a small business making textiles. Before the Make in America business started in America in 2010 when we established our business, we decided to make textiles in America knowing the excellence of American-made textiles, and we started in a small way and what we focus on is making things -- making fabrics that actually help make reusable items that help reduce the use of disposables. So it goes into incontinent wear. It goes into diapers. It goes into soaker pads and paper towels, reusable masks, reusable surgical gowns, which did not catch on. But anything that helps reduce the use of disposables, which are in a great way affect our climate. As a small business, we tend to focus on that without any government support or grants. It's on our hand because money that's invested in that. I was one of the two businesses that actually testified for the -- in support of EXIM Bank in 2019 and that was the first time that I found out about that EXIM Bank was in trouble. And since then, we have been a big proponent of this because I believe it's very important and we're a big -- a small business with a big voice to support EXIM Bank. CHAIR HEITKAMP: And you're -- where do you -- where's your production? MEMBER A. SHARMA: Its production is in Pennsylvania and in the Carolinas -- CHAIR HEITKAMP: Yeah. MEMBER A. SHARMA: -- because we work with a number of small businesses, small mills, that continue to make our fabrics, finish them and, you know, help us make new kinds of innovative fabrics, which actually now when we go across the world no one else in the world makes them. But we don't support the -- we don't have the support of big companies because all the manufacturing wealth of America has gone over to China so and we are nonsupportive of that. But that being, everyone has to be in business. It's one world. So we continue to -- with our mission of making in America. CHAIR HEITKAMP: Love your business. You know that. MEMBER A. SHARMA: Thank you. MEMBER PINHO: My name is David Pinho. I'm with PNC Bank and I've been so focused on -- EXIM Bank has been my entire professional career. My first medium term EXIM Bank was done in 1994 -- '94 or '95 -- and so I'm very passionate about this and trying to do more for EXIM Bank. I also have some battle scars for EXIM Bank. I've been up the Hill defending EXIM Bank during the reauthorization and what I want to accomplish, I mean, improve EXIM Bank, create more awareness about EXIM Bank and make people less look puzzled when I tell them what I do. I mean, they just don't understand what EXIM Bank is. So I want to be helpful. CHAIR HEITKAMP: And last go around you were so instrumental in identifying kind of challenges and gaps and, you know, your voice is really important. So thank you so much for -- Daniel for signing on again. MEMBER MONSANTO: Lisa Marie Monsanto. I'm a project finance lawyer at Rimon P.C. and my focus is on emerging markets. So I do a lot of DFC work, EXIM work, and so forth. Very passionate about emerging markets and seeing more American businesses there. I think a lot of these agencies are just black boxes to a lot of SMEs. They have no clue about it. They don't know how to access it, and I think small businesses are losing a lot of opportunity. So that's my huge interest, you know, to see more people taking advantage of these institutions. CHAIR HEITKAMP: Terrific. Thank you. MS. BARZELAY: Hi, I'm Jenna Barzelay from Banco Santander, also working in export and agency finance out of New York. We manage all of the relationships with all the North America-based agencies so it also includes other U.S. agencies like the DFC and then some other, you know, like EDC, the Canadian ECA. We're part of a global team so we are very familiar with all the different ECA programs. Also not on the Advisory Committee but was kindly invited by Stephanie to provide a commercial bank perspective at this meeting. CHAIR HEITKAMP: Terrific. Thank you so much. MR. PIETTE: Yeah. I'm Jean-Baptiste Piette. I'm heading the team at Santander for the exporter agency finance. We are a global bank and have a very strong interest, of course, of the U.S. markets in particular, who has -- it's been changing a lot for the last few months and I think it is great to see EXIM Bank to launch these type of initiatives. You're not the first one. As you guys know, many European, you know, Asian competitors are, you know, the subject as well. And I think it's -- these are very interesting times. You know, great, great addition. CHAIR HEITKAMP: Terrific. Thank you so much. MR. CONDREN: Hi, I'm Scott Condren. I'm a senior analyst here at EXIM so I'm not volunteering for the Advisory Committee. (Laughter.) I will be talking about the Make More in America initiative with some of my other colleagues at the bank. CHAIR HEITKAMP: You don't escape either. You got to tell us who you are there. COURT REPORTER: My name is Eric Mollen. I'm here to produce a transcript. (Laughter.) DIRECTOR HERRNSTADT: Hi. I'm Owen Herrnstadt. Hi, again. I'm the newest member of the board of directors here. Thank you for, again, all your service and I'm eager to hear from you. CHAIR HEITKAMP: Owen, thank you for -- I mean, one of the problems that we have is the lack of quorum. When they couldn't kind of stop everything else they stopped having the ability to approve credits and so your job is really important. DIRECTOR HERRNSTADT: Thank you. CHAIR HEITKAMP: Yeah. MR. FIORE: Good afternoon. I'm David Fiore. I'm the vice president of the transportation division at EXIM Bank and I've been with the bank about 31 years and I've been involved in the Make More in America Initiative, which is really exciting, and I'm working with my wonderful colleagues, Stephanie and Scott and others. MS. DEATHERAGE: Good afternoon. Stephanie Deatherage. I'm the deputy SVP in the Office of Policy and International Relations at EXIM. CHAIR HEITKAMP: Jim? MR. CRUSE: And I'm Jim Cruse, senior vice president. I never can get it straight -- policy analysis in international relations. I've been here a few decades. (Laughter.) CHAIR HEITKAMP: And responsible for producing an excellent report on competitiveness. He knows more about the history of the EXIM Bank than anyone else in the entire country. So if you want to know kind of the ups and downs call Jim. He's seen it all, haven't you? MR. CRUSE: Yeah, and international, too. CHAIR HEITKAMP: Yeah. And a lot of -- a lot of -- like he said in the meeting, you know, we produce a report that the rest of the globe reads and, unfortunately, doesn't get a lot of attention here. Yeah. Who do we have online? MEMBER FULGHAM: Hey, Senator, you forgot one person in the -- CHAIR HEITKAMP: Oh, I'm sorry. Hi. MS. DESSAINT: My name is Rose. I work with journalists and I was -- I was in the process of getting all of you here and to the community. So it's really exciting to see you. But I've only seen you in papers and going -- to get you here. So thank you so much for -- CHAIR HEITKAMP: You bet. Thank you. Anyone online who wants to introduce themselves? Matt? MS. DEATHERAGE: I think it's just us. CHAIR HEITKAMP: That's us? MS. DEATHERAGE: And the IT person. CHAIR HEITKAMP: Okay. So not Eric, who's doing the transcript, just us? (Laughter.) So we're going to just kind of launch into the agenda here. Most of you had a chance to hear my comments. In addition to the work that I've done on the EXIM Bank, probably my first exposure was serving on advisory committees for the USTR and starting to understand kind of the networking that needs to happen. I think one of the things that we were most successful on over the last year has really been forcing all of government, which really wasn't even on the agenda when we started last year, but because of the Advisory Board the all of government work, and, to be honest, the administration seeing that gap we really have driven some of that. So I just tell you that because you, as individual members and your collective voice, when we continue to hear the same thing over and over again from all stakeholders for the EXIM Bank really changes the dialogue. And so in the good news category it's interesting. I'm on a committee that's looking at rare minerals and what that means for the energy transition and one of the big points of discussion was what -- whether the EXIM Bank could be secured to finance this. And so you hear more and more now that the bank's up and running and Reta's so aggressive you hear more and more people thinking about the bank as part of solutions. Whether it's climate, whether it is taking a look at the China challenge, you know, whether it's building back our transatlantic relationships, the bank has really started laying down some really important markers. And so with that, I want to move on to a conversation regarding priorities in climate. And who's going to take the lead there? Claire? MS. WANG: Yeah, I'll be starting off and then Jesse's also here. CHAIR HEITKAMP: Okay. MS. WANG: We're really hoping this can be more of a discussion but wanted to start out by framing the priorities that we have here at the SPEC team, which is short for Special Presidential Envoy for Climate but has far too many syllables. But we really appreciate the opportunity to discuss with you today our climate priorities and how we can see closer partnerships with EXIM. Even over the course of the past couple years of the administration it's been so wonderful to see EXIM leaning in on climate-related finance and there's going to be much more that needs to be done to achieve our overall goals for climate action. So let's just step back for a bit and reflect on what we have seen just this past year in climate -- in climate impacts. We saw 15 different over billion-dollar extreme weather disasters in the United States alone. We saw flooding events in Pakistan, South Africa, Nigeria, Uganda, and more that displaced tens of millions of people and killed hundreds. We saw temperatures in the Arctic that were 70 degrees above normal, temperatures in the Antarctic over 100 degrees above normal and this is just a level -- a level of warming that we are already experiencing from emissions already in the air that have brought us to 1.1 degrees Celsius. Globally, we are trying to limit warming to 1.5 degrees Celsius. This is the number that scientists from around the world have pointed to as the temperature limit that will prevent the most catastrophic impacts of climate change. And in parallel to adopting or adapting to the emissions from 1.5 degrees C, which will be substantial, we need to take ambitious efforts to prevent warming from exceeding that level. The levels of climate ambition that we're seeing internationally today are, indeed, keeping this 1.5 C limit alive. But it will require a mobilization of people and capital at an unprecedented rate to achieve these existing commitments, and we will need to further enhance this ambition to actually avoid the worst impacts of climate change and maintain a livable future. So this is an enormous challenge. It is a challenge greater than perhaps we have ever faced as a collective civilization. But it's also enormous opportunity and we're seeing EXIM wading into opportunity today to show how we can create jobs, leverage American expertise, and promote American companies to deliver on our overall climate pledges. So there are four areas of action that I want to highlight for you this afternoon as priorities, which we can discuss further as time allows. The first is accelerating the clean energy transition by deploying zero-emissions energy sources and reducing our dependence on unabated fossil fuels. This includes rapidly deploying renewables in the power sector, electrifying major sources of energy demand in transportation, in industry, in buildings, and accelerating other zero-carbon energy sources like nuclear where we have already seen a great history of collaboration with EXIM in this past year in Poland and Romania. So accelerating everything that we can do to reduce emissions in the energy sector is going to be the backbone of our overall transition to limit CO2 emissions and keep us within 1.5 C. The second priority I want to highlight for you is tackling methane and other super polluting greenhouse gases. So methane is a greenhouse gas, as many of you may know, that is 86 times more potent than CO2 on a 20-year timescale. It is not going to be possible to limit warming to 1.5 C without taking dramatic action to reduce methane emissions. And, yet, despite the importance of methane for climate objectives, currently only less than 2 percent of overall climate finance is dedicated to methane reduction in particular. So this is why the U.S. and the EU launched the global methane pledge at COP 26 last year in Glasgow to mobilize countries around the world to reduce methane emissions at least 30 percent by 2030, which is the minimum amount that's needed to keep us aligned with 1.5 C. Today, we have seen over 150 countries around the world join the global methane pledge, all looking for opportunities to cut methane, and this means action across the fossil energy sector, the agricultural sector, and the waste sector, which are the key sources of methane emissions. And, in particular, in the fossil energy sector we see very strong opportunities for collaboration with EXIM, given the enormous amount of expertise that we have in American companies and the fact that cutting methane in this sector is the equivalent of eliminating all emissions from all cars and all trucks in the world if we can achieve the full mitigation potential in this sector. There's simply no other climate solution that can move this fast. The third area I want to highlight is to address emissions from land use change and oceans. This is an emerging space of engagement that's not quite as traditionally investment intensive in infrastructure as, perhaps, EXIM has worked in the past. But there are key opportunities to support things like monitoring, digital services, and other interventions to support the management of investment in this sector, which are enormous, to protect the Earth's lungs in forests and in oceans. And the last little bit I want to highlight is driving investment in climate adaptation to ensure that as we scale up our efforts to reduce emissions we can also advance adaptation and resilience. Much of this is happening through PREPARE, which is the President's Emergency Plan for Adaptation and Resilience. EXIM is one of 19 federal agencies which contributed to the PREPARE Action Plan, which we're very grateful for. We also see EXIM playing an important role in scaling up these technologies worldwide, including through climate information services like Early Warning System, water management technologies like desalination, food management, like for cold chain and drip irrigation, and also health systems like outbreak detection systems, since climate change will also enhance the spread of disease around the world. So these four pillars -- clean energy, methane, natural emissions, and adaptation -- essentially form our blueprint for how to keep 1.5 C within reach. In each of these pillars there are myriad solutions that are proven and profitable and can be deployed around the world today. So we're excited to work with EXIM to help unlock these solutions and we know you're already rising to the challenge. So I don't know, Jesse, if you have anything else you want to add. MR. YOUNG: No. Let's go to discussion. MS. WANG: If not -- yeah, I'm happy to take any questions or hear your reactions. CHAIR HEITKAMP: Questions? Comments? Yeah, Denny? MEMBER HECK: Under which of those buckets do agricultural practices fall? MS. WANG: I think that'd be a combination of methane and land sector emissions. So, of course, agricultural emissions from livestock and terra fermentation is definitely a problem for methane emissions and there are also associated emissions from the land sector, including from land use change, deforestation, or direct emissions from soil. MEMBER HECK: Thank you. MEMBER GONZALEZ: I'd like to make a comment. And, of course, I mean, EXIM Bank how, you know, it's willing to go and to be a catalyst to produce these advancements in these different type of topics. But my question is, is there a specific sort of incentive that EXIM Bank could think about to -- for these projects? Because right now we have questions from sponsors, exporters, thinking, well, what is their specific incentive, and they don't want to know only vis-a-vis EXIM Bank but vis-a-vis any ECA program. So my question is that. I mean, how can EXIM Bank think of some specific incentives that can be provided, of course, within the OECD guidelines? CHAIR HEITKAMP: Yeah. Jesse? MR. YOUNG: Oh, I'm wondering if Stephanie or someone at EXIM wanted to jump in here. We want to speak to EXIM authorities. CHAIR HEITKAMP: I think -- I think that's -- you heard Chair Lewis talk about, you know, we're not a granting agency, right, and this is -- this is how you can kind of advance this. One of the -- one of the kind of challenges if you look at the availability, either under the Inflation Reduction Act or the infrastructure bill, you know, there's -- there's huge investment that's going to happen in climate in this country. The question is how you export that, how do you -- I mean, we can't -- we can't deal with climate by simply converting -- converting the energy structure or industrial structure here in this country. But this is where this Made in America have confluences because the Made in America stuff is getting a lot of attention in Europe. The Inflation Reduction Act is getting a lot of attention and I think at least from my limited knowledge of trade law I think you can expect a WTO challenge or at least some bilateral challenges. And so the question is -- you know, to your point, which is kind of how you look at a global financing/granting regime that's going to actually benefit not just country, not just companies here, and is that really the role of the EXIM Bank. MR. CRUSE: Well, we don't have many big tools because we don't have untied programs, which other countries tend to use as incentives. We don't have flexibility on content, which other countries tend to use and that's actually the biggest incentive I've seen so far is that other countries will greatly reduce the content required on major green environmental renewable exercises. Without that, we're left with some pretty small tweaks that we could employ in terms of very small changes in fees that we could introduce and a variety of other very tweaky type of things that wouldn't exactly jump up as an incentive. Let me put it that way. MEMBER FULGHAM: But if we know that, what are we doing to try to make those changes so it makes us more competitive? I mean, what does it take? Is it a major fix? Is it an amendment? I mean, what has to happen to allow it to take advantage of those opportunities? When other countries are doing it for their businesses, what would we have to do? MEMBER HECK: Change the law. CHAIR HEITKAMP: We have the bylaws there -- how you look at it. MS. DEATHERAGE: So, I think, a couple things on that point. As some of you might know, the renewable energy sector is one of the transformational exports that fall under the CTEP program and our charter does allow us to provide certain rates, terms, and flexibilities. What that looks like exactly, I think, we -- as we're getting that program off the ground has been looked at more on a case by case basis. But I think we do consider that gives us some leeway there but on a transactional basis at the moment. We can look at and see what leverage we have. I think on the -- on Mauricio's point on the CCSU at the OECD, as some folks might know there's currently a major revision both to the OECD arrangement more generally but also to the climate change sector, understanding that gives the financing terms for climate friendly transactions. There's a two-part piece of these discussions. One is can we expand the tenor -- the maximum tenor for 18 years to something higher that makes these transactions more economically viable, given the markets, but then also looking to expand the sectors that are eligible for that financing and I think, you know, there's progress being made, the approach that the U.S. is taking to that, and I know SPEC has been involved in those discussions from an interagency standpoint as really making sure that the sectors end up on their list. What we don't want to do is take a rushed position to that, to throw out a bunch of sectors that actually ends up being more of a greenwashing perspective and we're also really trying to make sure that, you know, U.S. exporters are in on those conversations to see are these, you know, sectors where we compete and we have equities in that. And so I think, hopefully, over the next year you will see an expansion of the CCSU both in terms of the term and sectors from that perspective. Now, that doesn't get to EXIM's comparative advantage because that is for all ECAs. But I think that you'll find that, you know, the economic terms that can be offered for those transactions will be expanded and something that EXIM can take advantage of. CHAIR HEITKAMP: So the one question that I would have and a little concern following up kind of a label of greenwashing, but I don't think it's any mystery that today there's more coal being burned for energy across the world than there was two years ago. And so where we look at kind of expansion of renewables, you know, we all -- we all have an idea of what's clean energy. There's a lot of people that think clean energy goes beyond kind of those traditional wind and solar. I mean, I raise the specter of helping to fund more mineral mining. So I was just talking to someone very well positioned in South America who was talking to mining developers. They're talking about this green energy transition and, obviously, China is -- has moved into this sector in a big way and some of these minerals or 90 percent of the known supply it's 90 percent controlled by China. So, again, that kind of cross-pollination between, you know, concerned about China and concerned about the environment. But there has been a resistance to look at LNG export terminals that could be utilized to replace coal. There's been a reluctance to look at supporting mining because legitimately concerned about other kinds of environmental impacts. But, yet, we know that in order to make the conversion as quickly as what we can those may be two industries that need support but, yet, are not within the dialogue of what needs to happen. So I guess I'm curious. I think the administration has not been as hostile to nuclear but, you know, there's a lot of, you know, kind of approach avoidance with the natural gas industry and with the mining industry on rare minerals. So what would be your reaction to that? MR. YOUNG: I'll just add really quick, and I'm sure Claire has some thoughts. In terms of coal finance, you're right. I think in terms of staying below the world's climate limits we're trying to hit on the Paris Agreement. There's no space to be building new baseload coal. So the question that we have been working in in the OECD and in the climate conference just now -- Egypt climate conference and Scotland last year -- is trying to get sectoral agreements with G-7 and G-20 countries through their development finance agencies, their ECAs, to say, we're not financing coal anymore. We're going to at least have a universal agreement this is not where we want our dollars to be flowing and pressuring other countries like China, which is by far the world's largest overseas financier of coal power, to join that crowd. On questions like nuclear, I think absolutely we'd love to see the U.S. lean in more. It's just a question of tools, right. Financing or guaranteeing baseload nuclear, at least as I understand it, is not something EXIM can do a lot of times. It just absorbs a ton of your credit. It drives your default rate. But in terms of EXIM -- CHAIR HEITKAMP: Do you look at the restriction on timing -- MR. YOUNG: Yeah. CHAIR HEITKAMP: -- I mean, when you're looking at short-term versus -- MR. YOUNG: Yeah. (Simultaneous speaking.) Right. These are really billions and billions of dollars. But I think in terms of next generation nuclear there's, I think, a lot of opportunity there to push homegrown U.S. solutions that you're talking about there. I don't know if you want to -- CHAIR HEITKAMP: Well, I don't want you guys to avoid natural gas because one thing Brad talked about last year when I was -- went through this, he talked about the support that the AFL-CIO has had for looking at supporting export and import terminals for LNG. MS. WANG: I was going to transition to the topic of natural gas as well. So, as Jesse mentioned, I think there's universal agreement that there is no room for coal in this energy transition. When it comes to natural gas it's a slightly more complicated picture. I would divide it first into natural gas in the demand side and natural gas on the supply side. So on the demand side, we really don't see a need to be building out new sources of natural gas power generation or new uses of natural gas in the majority of other buildings or industrial applications because there are a plethora of zero-emissions technologies that can be readily deployed that are oftentimes cheaper or more secure than natural gas in those applications, which is why the interim energy guidance as of now has only very limited exceptions to where we can finance new sources of natural gas demand infrastructure. When it comes to the supply side, it is a more complicated picture because as we have seen now with Russia's invasion of Ukraine, we have a clear need to be backfilling this enormous missing source of Russian gas just to meet our very near-term energy security needs while also doing everything we can to reduce new demand for natural gas in the future. When it comes to LNG import and export terminals, of course, on the SPEC side of things we don't engage directly in terms of the new domestic investments that may be happening in this sector and I think that -- I don't -- I don't know if there have been particularly active conversations about our stance for international LNG terminals. But there are very real energy security considerations we should be addressing, but we should also recognize that when we're talking about new LNG import and export infrastructure these are projects that will take many decades to develop before they become operational. So I think the landscape when it comes to where sources of natural gas are going to be coming from and where demand is going to be coming from, that picture is quite different 15, 20 years down the line than it is today and that's a very important consideration we're thinking about where we're investing and how in this sector. One area that is unequivocally needed is to address methane emissions in the oil and gas sector. As I said before, this is actually one of the fastest ways that we can reduce temperatures in the near term by addressing this critical super-polluting greenhouse gas. But, importantly, tackling methane emissions from this sector is actually an energy security opportunity because natural gas is primarily methane. So every year, the world flares as much gas as the EU used to import from Russia and there's a similar amount that's lost from deliberate venting and from leaks across the supply chain for oil and gas around the world. If you were to aggregate all of the gas that's currently lost from venting, flaring, and leakage, it would be the third largest gas producer in the world. So by advancing solutions that can capture these methane emissions they're not only eliminating one of the most critical greenhouse gases we're experiencing today but you're also backfilling the need for Russian gas, you are capturing a critical resource, and you can meet near-term energy needs without necessarily resorting to new exploration or development. So this is an area where we have had very productive discussions with EXIM in key countries like Mexico or Algeria or other countries that have either significant losses or significant export potentials to the EU and other allies and it's definitely an area that will remain a priority for us in the year ahead, moving forward to working more closely with the you on it. MEMBER HECK: I'd like to ask -- CHAIR HEITKAMP: Now, can I just ask a question, which is when you look at America's reduction of CO2 emissions, especially in the energy sector, what percentage of our reduction has been the conversion from coal to natural gas? MS. WANG: So it's true that a significant driver of our reduced coal sector emissions is from the switch from natural gas -- from coal to natural gas. I will say that a lot of those emissions reductions benefits were happening at a time where renewables were not quite as viable a solution. But when we're looking to what the path is ahead from now to 2035 when the administration has pledged to reach their emissions in our electricity sector, that is going to be driven by renewables far and wide. Of course, there is potentially limited roles for natural gas-fired generation with carbon capture and sequestration. CHAIR HEITKAMP: How many -- how many solar farms and wind farms would have to be built right now to replace coal and natural gas as a fuel source for energy development and how soon can you get that done? MS. WANG: I don't have the precise numbers. I don't know, Jesse, if you want to answer that. MR. YOUNG: I don't think the point is necessarily, like, to pit one fuel source against each other. In places like Africa USAID's largest energy program funds renewables. It also funds some gas work to backstop those renewables. The question is what is the lowest cost lowest emission technology you can get in those parts of the world. What we desperately want to avoid is what's going on in places like China. China is building a ton of coal plants that have never run and probably will never run. You would hate to see a lot of developing countries build energy infrastructure that runs for a little while or becomes an uneconomical stranded asset, which is not included in the carbon budget right now. You know, everyone here knows the financing terms for most power plants are decades. If your plant's only going to run for 10 years, you are creating an economic disincentive. And so we want to make sure that people are -- there's a lot of countries and companies out there with net-zero targets thinking about what is the shelf life of the energy infrastructure built -- that you're building now and does it actually fit in the carbon budget and are there more economical, more sustainable solutions. CHAIR HEITKAMP: Why do you think China would abandon that infrastructure if they built it? MR. YOUNG: Well, we could -- that's a different conversation. CHAIR HEITKAMP: I know -- so we -- they're not -- MR. YOUNG: China is overinvesting -- (Simultaneous speaking.) CHAIR HEITKAMP: This isn't a dialogue just for EXIM but it does -- it does answer or think about the question whether it is carbon capture strategies, whether it is taking a look at, you know, kind of -- not just simply saying we are not going to be financing fossil fuels and abandoning some strategies that could have an immediate impact on climate. MR. YOUNG: Totally agree. And that's what Claire is referring to is unabated fossil fuels, right. There are technologies out there to capture these emissions. EXIM, as I understand it, has to be technology neutral. It has to be sectorally neutral. CHAIR HEITKAMP: Right. MR. YOUNG: They're not here weighing and putting their hands on the scale of one technology. It's looking at what are the technologies of the future where there's job export opportunities. But totally agree on that front. MS. WANG: Yes, and I think, unfortunately, we have to head over to our next obligation. MEMBER V. SHARMA: Before you go, I want to just say two things. One is, I think the visibility for both EXIM and SPEC of critical minerals, especially the lithium supply chains, are critical. It's something our company is engaged in, whether it's ABC triangle, whether it's in the U.S. You know, I think higher attention in that is absolutely critical. It's getting lost in the shuffle and when we're talking about eliminating methane, fast tracking financing of those projects is absolutely critical. Second thing is we need to do something on policy change where climate adaptation gets the same type of fast tracking that climate mitigation gets because we are dealing with adaptation, the analysis, the -- you know, getting the data, analyzing, and then acting is absolutely critical, and it just doesn't have the visibility. And it's the same issue on an EXIM basis. So -- MR. YOUNG: Sorry. We have gone way past our time. MS. WANG: I'll leave a couple of business cards here in case anyone wants to be in touch and I'll make sure that we can be connected as well. Thank you so much. MR. YOUNG: Thanks so much. CHAIR HEITKAMP: Thank you. We'll go ahead and turn to Made in America. DIRECTOR HERRNSTADT: So I've been -- I've been asked to say a few words about Made in America Initiative before the real pros explain the details of it. Decades of offshoring U.S. jobs, production, and production capabilities have greatly contributed to a growing threat to our economic and national security. If there's any doubt just look at the serious disruption to our key supply chains since the COVID-19 pandemic. Indeed, semiconductors, manufacturing parts, components for the defense industry, goods for health care, and efforts to address dangers to the environment have all been impacted by disruptions to those supply chains. In addition to outsourcing, there has been a vast under investment in our declining manufacturing sector, which is essential to the health of our nation's economy, to U.S. workers, and to local and state communities. And in addition to all of this, as we all are well aware, growing global competition is increasing at a fever pitch, putting more pressure on U.S. companies and exporters and U.S. workers. The President has recognized these challenges and is confronting them. He's been clear from the start of this administration that solving these challenges in an effective way with real results is an imperative. That's why he prioritized creating solutions to these problems through a whole of government approach explicitly addressing Executive Order 14017. The executive order includes an important role for EXIM, based on the bank's existing authorities, to support export oriented U.S. manufacturing projects and EXIM is delivering. Let me turn it over to Stephanie and our team who will talk about this in much more detail. MS. DEATHERAGE: Thanks, Director Herrnstadt. So, again, Stephanie Deatherage. I'm from our policy office. What we'd like to do today is -- I think this is the first time that we have had the opportunity to really talk about Make More in America with the Advisory Committee and so we're very excited about that. Scott Condren and myself devoted many months of our lives to this initiative and so we're always excited to talk about it and go through the details. So I'll just provide some information in terms of where it came from. Scott's going to provide the details of, you know, how -- what the initiative looks like, and David Fiore from our transportation division is going to talk about how we're really implementing and executing the initiative, and then Jenna Barzelay is here from Santander because we thought it was important to have some commercial banking perspectives as we roll the program out. And if you'll excuse me, I have to step out at 5:15. But I leave you in very good hands for all the questions and everything, and hope to catch up with most of you during the conference tomorrow. So, as Director Herrnstadt mentioned, where did this come from? Folks might remember that very shortly after the Biden/Harris administration came into office they had the executive order on supply chains. Coming out of the work deriving from that executive order, the White House put out this recommendation that EXIM look at how it can implement a new domestic financing program. That triggered a series of events. The first aspect, really, was looking at does EXIM have the legal authority to do something like this, and we have had many general counsels who have said yes but this is the first time we really dug into it specifically and came to the determination that, yes, as long as there is an export nexus to the financing we're providing we do have the ability to do this. The other thing that we did at the offset was, really, work from an interagency perspective, first, with the USTR to look at any potential WTO concerns, but then also all the other financing agencies that have programs, because what we did not want to do was duplicate efforts. We want to make sure that taxpayer dollars are really put to a specific need and there's no overlap. So we liaised with SBA, DOT, Department of Energy, et cetera, to look at it, and then we also just went through and over the period of six to eight months built out the details of what the initiative would look like. And so where we ended up was -- where we saw the demand and the niche that we could fit is really taking our existing authorities for medium and long-term export finance programs through our loans, our loan guarantees, our insurance, and apply those to export-oriented domestic manufacturing projects. So now what I think is the most exciting about this is it really -- you know, we can help, as I say -- you know, EXIM can now support a company from soup to nuts, right. So from the beginning you're in the domestic market, you're looking to scale up, you're looking to export. We can support that and hopefully we can be there on the other side when you are exporting and helping to get your products into the third -- you know, third country. And so what -- the benefits of doing this is going to be bringing supply chains back to the United States and helping to rebuild and revitalize manufacturing, really helping those companies scale up and their ability to manufacturing. And I think one of the things that we are most excited about is, as some of, I think, the bankers and exporters here might know, you know, we have our content policy and that's, you know, tied to, you know, percentage and the support and we have a proxy for how many jobs we're supporting through this. But with this particular initiative, we actually know how many jobs we're supporting through the financing that were provided, and I'll turn it over to Scott to provide more details on that. MR. CONDREN: Thank you. All right. So, as Stephanie said, this is really an extension of our medium and long-term products, just to domestic borrowers. So new -- it's really, there's different policy requirements around it, but the first one is what we call the export nexus. EXIM has wide latitude to support transactions that facilitate exports, but we do need to facilitate exports to be legally able to do it. So, how we think about this is, you know, a borrower for the project, the project needs to generate 25 percent of its either revenues from exports or production capacity for export. We're a little agnostic to how they report it. Propriety sectors such as renewable energy, such as semiconductors, any small business, that's 15 percent, so we want to incentivize those companies, give them support when they're at a lower export level, hoping they'll grow into the export champions of the future. And that's really a key part of this also, is so much of our working capital guarantee where we can provide working capital financing to suppliers, to exporters. We can support the capital investment of suppliers to exporters. So, if a company sells mostly to a larger company and they want to extend their production to meet that larger company's needs, we can help support that, help them build a new equipment production line or things of that nature. As Stephanie said, we started looking at the content, which has always been a proxy for jobs for our export finance. You know, we can't measure jobs directly on an export transaction, which we have to sort of estimate via contents. We know the exact number of jobs. We get good estimates for domestic transaction. You know, there will be construction jobs, which we should have a good estimate of, and we will know how many for, like, operating a factory or running a line at a factory that we ramp over time. From there, we go to a formula. There's a very specific number, which I can explain how we got there if you're incredibly interested. It was, basically, for every job year, it's $189,240 in eligible financing. The job year concept is important. That means, you know, operating jobs that might be there for five, 10 years over the life of our financing. We weigh higher in the construction jobs. Construction jobs are great. They're important. We count them, but jobs that'll be there longer term get weighed heavier, essentially. On the pricing issue, so domestic finance: not an export credit, not subject to the OECD arrangements, so we have some flexibility in terms of tenors, you know, repayment terms, things of that nature. We still need to price on market term. That's important to get to the WTO concerns that you mentioned earlier. It is tied to exports. It was found to be a subsidy -- to be an export contingent subsidy, which for the WTO is a sort of major red flag. Luckily, we can price that market term. The OECD allows for pricing in what they call the market benchmark countries. So we'll, basically, use the same pricing methodology we would use for products in Germany, in the U.K., or in Australia, all countries we worked in before. And the big thing is, we still have to be additional. We don't want to displace the private sector. We'll get into that in the next slide a little bit, but the idea is we'll be filling gaps in the market, whether that's for volume or tenor. We think, you know, there could be opportunities where the private sector will provide maybe three years of finance to a manufacturing project. The project is not really viable once you get seven or eight years, and that's what we could -- we could come in and help extend that tenor. Beyond that, we really have the same underwriting standards, reasonable terms of repayment, which also gets on the next slide. One unique thing is, generally speaking, EXIM transactions under $25 million are done under delegated authority. They don't need to go to the board. They're small. For these ones, because they're new, all of them are going to go to board in the near term, so that might delay some of the smaller transactions. But it was important for transparency's sake to show the board, hey, this is a new thing. This is how we're being -- using it. And then, one last-minute change to the initiative was our typical guarantees overseas or insurance are 100 percent guarantee of principal and interest to comply with U.S. government credit policy. For domestic transactions, we're only providing 80 percent guarantee. That has posed some wrinkles and challenges to the initiative that we are working out, and I'm sure our commercial banking partners will identify how that's been an issue, but we are working on ways to make that work and we think we might have a viable path to a useful end. All right. Next slide. So, in terms of turning all these inquiries into applications, we have talked to dozens if not a hundred different potential applicants over the last six months. You know, it's slowly turning these into applications. So, we have one application that I can talk about that's on our website undergoing environmental review. It's for a small steel manufacturing project in Texas. So, that's exciting. We're going through due diligence now. Obviously, it still needs to go to board and all that. Yes? MEMBER HECK: Scott? Traditionally, EXIM has filled a role that the marketplace has not filled. I tend to think of this as for small businesses which banks don't think have enough volume to warrant them, for international transactions for which the ability to collect is diminished where the U.S. can fill in, and for long-lived large dollar capital items, you know, whether it's nuclear energy or airplanes. In that regard, the marketplace didn't work very well. I'm trying to understand how Make More in -- what gap in the marketplace not provided by traditional lending institutions is this filling. MR. CONDREN: Sure. It's very similar once you identify, you know, large capital investments. If you look at the needs in the United States to sort of onshore these supply chains to, you know, decarbonize our economy, it takes massive capital investment. So, EXIM is a small part of that. You know, I think you'd recognize that. We look at the IRA, the Inflation Reduction Act, the Infrastructure and Investment in JOBS Act, all that. You know, the amount of capital needed to actually stand up these industries, get the economy to where it needs to be, EXIM is a small part of that. So it is these larger projects, we think, are a big source. You know, if there's a lot of capital demanded. Then you have longer tenors needed, and maybe the private sector can offer, and we can step in. And then, frankly, we also want to make sure we are sort of leveling the playing field to make sure that government finance, per se, is not a -- does not factor into where companies make their investment decisions. I talk about it a little bit. You can hear from others. A lot of our peer ECAs have these domestic finance programs. The UKEF, our equivalent, has provided loans to Ford, an American company. We want to make sure that if Ford needs that, we could also step in and help level the playing field. We don't have to make any decisions based on because, oh, well, the U.K. will give us money, but the U.S. government won't. CHAIR HEITKAMP: You mean a location decision? MR. CONDREN: Yes. Their investment -- their investment location decisions is the idea. CHAIR HEITKAMP: And if I could just add on this really quickly, and I think Jenna's going to get to this in her discussion -- when we were initially thinking about this and talking with the White House, there were two areas that we saw, okay, there's a lot of appetite here. One of them is semiconductors, where it's $20 billion to create a fab. You know, the private market might only be able to raise $15 billion. We can come in and plug a hole with five. Well, we have the CHIPS Act. The other one is on renewable energy, how can we help to scale up on that side. One of the things that are coming up is now with the -- all the other -- the IRA and everything, and DOE's new authority from that side. Okay. Is that a gap that we, you know, thought we were going to be able to fill? Can we, especially because there is so much demand in the United States right now that the exporting of those technologies of that equipment is probably going to be minimal at this moment? So, I think where we started, being oriented in terms of where, you know, looking at supply chains, there was a really high demand for us with all the actions that Congress has taken lately. It has pivoted us in a little bit of a newer direction. But we do think that there's a lot, and I think working with Director Herrnstadt, who is working on the staff working group, really focusing and drilling down on SMEs, middle-sized businesses that really need help scaling up, I think, you know, we're hoping that that's where we're going to be able to find a lot of the opportunity. But I don't want to steal thunder from either side. DIRECTOR HERRNSTADT: If I could just add just one tiny thing. In addition to providing new manufacturing opportunities, the program also can help an older plant retool, particularly when it comes to green technology and renewables, which is a huge thing, particularly when we're talking about a hollowing out of the manufacturing sector. MR. CONDREN: That's a very, very good point. It is open to -- it's not just green. We want to support our existing manufacturers who also might need financing to help them compete better. So, just this slide's really kind of, I think, key to understand sort of the strike zone of EXIM. You know, we operate under our congressional mandates that said, hey, don't split the private sector, private's trained to do it, let them do it. But also, they limit our risk appetite. They say, you know, find a reasonable transfer of payments. We have a 2 percent default rate cap, which I'm sure you've all heard about ad nauseam. So, what that basically means is, we have had inquiries. We're not providing venture capital. You know, if someone comes up to EXIM like hey, I have a great idea. It'll pay off in five years. I'm sorry. We can't provide you a loan for that. That doesn't fit our standards. We are funding applications in that strike zone. It's narrowing, and we're looking to see where we can maybe open that aperture a little bit over time. And with that, I'll turn it over to David Fiore. MR. FIORE: Thank you, Scott. As Scott mentioned, the program was approved by the Board in April, and we have been having lots and lots of discussions with many potential users of the program. We have been -- we have been taking -- in terms of implementing it, we have been taking a whole of EXIM Bank approach. We are involved, Scott and I and some other colleagues, are having bi-weekly meetings. We're involving the legal division. They -- we have got to think about the documentation. We're looking -- we're working on a business plan to better incorporate all aspects of risk appetite, working with our CFO on budgeting and how that -- how he would have risk rate and reserve for these potential transactions. And then we're also -- Scott alluded to, we're working with interagency -- our interagency partners to make sure that there's not a duplication of effort and that we are filling a need that is not being fulfilled by, say, the Department of Energy or the Small Business Administration. MEMBER FULGHAM: I notice that DFC is not up there with MCC, some of the other federal agencies playing in this space, so when you talk about coordinators, I hope you're including them as well. MS. DEATHERAGE: So DFC cannot provide financing in high income markets at the moment. And so, given the fact that this financing is happening here in the United States, this isn't really an area where they can -- MEMBER FULGHAM: Well, they have this special dispensation -- MS. DEATHERAGE: So -- MEMBER FULGHAM: Yeah. Okay. MS. DEATHERAGE: Yes. Right. Under the Defense Act. Right. Yeah. MEMBER FULGHAM: It's under the Defense Procurement Act, DPA. DPA. Mm-hmm. MS. DEATHERAGE: Yes. Yes. MR. CONDREN: I think that might have expired or done. MS. DEATHERAGE: Had to. MR. CONDREN: Yeah. MEMBER FULGHAM: Okay. MEMBER HECK: Thank you, counselor. MEMBER MONSANTO: As you probably know. (Laughter.) (Simultaneous speaking.) MEMBER FULGHAM: I'm sorry. Did it expire or was it suspended? Which one is it? MS. DEATHERAGE: That, I don't know, but I know there will be some folks -- MEMBER FULGHAM: Because there's at least 15 to 17 deals in that pipeline, so you just can't -- you can't just get rid of the program. That doesn't make sense. MEMBER MONSANTO: It expired. MEMBER FULGHAM: Right, so what happens to all those loans that are out in that particularly program? MS. DEATHERAGE: It can be similar to things that we have done here where there's a tail to it, right? If the application comes in by a certain time -- MEMBER MONSANTO: Those deals -- those deals run out, but no new ones enter. MEMBER FULGHAM: So no other agency picked up that responsibility to continue it? CHAIR HEITKAMP: Uh-huh. MEMBER FULGHAM: Wow. Okay. MEMBER MONSANTO: It was, like, a special -- MEMBER FULGHAM: It ties into what we're trying to do here too, as well. MEMBER MONSANTO: Yeah. Yeah. But it was unusual for DFC to do it. MR. FIORE: So, as I mentioned, we're developing a business plan for this new program, and I mentioned we were having weekly meetings. Scott alluded to the issue of the 80 percent guarantee. We are working with -- we're having conversations with the different lenders, including Santander and some of our other lending partners, to figure out a way to -- how to diffuse the potentially adverse impact of that, the fact that it's an 80 percent guarantee rather than the traditional 100 percent guarantee that most of our lending partners are used to. And so, there are some ways we think there -- we think we can get there. There could be private insurance or sharing collateral. We're being creative and trying to figure out a way to make that work. And then, because this is a domestic program, there's certain things that we're not used to dealing with, like NEPA and the Endangered Species Act. So we're looking at -- we're working that into our business plan, and making sure that we have the resources to address those requirements of domestic lending. And we have already developed a pipeline tracker, where all these leads and conversations that we're having with different companies is -- we're able to track those and track the follow-up. This is sort of at the preapplication stage, and we're also looking -- we have developed a screening application, if you will, to have the first sort of management review of a potential application to see if our senior management or transaction review committee believes that this is something that we should pursue before we actually have them submit a formal application. So it's a way to sort of -- okay, it makes sort of the first cut. You know, is this going to meet all the policy parameters that Scott mentioned and is it credit worthy, do you think we can do that as additionality? Yes? No? Okay. Yes, move forward before so that way -- that way the borrower is not expending money and time. And they're getting an answer as soon as possible, whether there's potential for a transaction or not. MEMBER HECK: David? MR. FIORE: Yes? MEMBER HECK: I noticed in the previous slide you plugged in the 2 percent default rate -- MR. FIORE: Yes. MEMBER HECK: -- significantly higher than what the overall bank's performance was prepandemic, although we went up quite a bit. I'm curious to know what the latest trend lines are on our default. MR. FIORE: I believe it's been trending down with the recent -- constructions of the aircraft due to COVID, it's been trending down. MEMBER HECK: Are we down to 1 percent, Jim? MR. CRUSE: Not quite. MEMBER HECK: And what was our peak? MR. CRUSE: 1.99. Not quite. (Simultaneous speaking.) MEMBER HECK: And we're almost back to 1? MR. CRUSE: Right, because all the aircraft credits really didn't go broke. They just had a liquidity problem, and so we got them to -- that registered as a default. So then we -- when they got over the liquidity problem, they restructured, and they're now on pace and they now come off of the default. So we quickly went up and we quickly went down. The net -- there are a few ongoing cases that keep us around 1 percent, which were there before and are still there. MEMBER HECK: Thank you. MS. DEATHERAGE: But just one thing on that. I don't want to detract from the conversation, but I think Jesse brought it up when talking about nuclear. I mean, the 2 percent does have an impact on the bank in terms of its present appetite. So, for example, when you're talking about a nuclear transaction or, let's say, one of these semiconductors, the exposures are so large that we, you know, have to look at it in a different way in terms of, do we feel comfortable doing a $15 to $20 billion nuclear deal? Because if that -- you know, if that goes bad, then we're done, and we're done for a very long time. And so, the 2 percent really kind of -- it doesn't kind of -- it hangs over, I would say. I mean, from a day-to-day underwriting perspective, it may not, but I think it really does impact in terms of the strategy and how we're thinking about taking various risks within our portfolio. MR. CRUSE: And one of the reasons that does is why there is a request in --somewhere in the halls of Congress, let's put it that way, in the budget process to grant the bank an exclusion from the 2 percent for nuclear and similar things. Okay. So that's -- whether that gets into a Continuing Resolution, et cetera, et cetera, you all know the problems with all that, but it's an issue that will stay alive on the Hill until it's dealt with because we cannot handle these chunky things, whether it's for this program or other programs, with that hanging over our head. MR. FIORE: Just one last point. We had -- to give you a flavor of the different types and diversity of the companies that we're speaking to, we're talking to companies that want to expand or start a new manufacturing facility. We're having some really interesting conversations with advanced air mobility companies and advanced propulsion systems and critical minerals, a lot of the companies that are in the transformational export realm, and fintech and battery plants. So it's a really interesting, I would say, cross-section, a wide mix of different companies. And I think, again, to the 2 percent default rate risk: as Scott mentioned, we're not venture capitalists, but a lot of these companies are pretty early stage. So, it's like, if they're small amounts, can we reach further down in the risk spectrum or -- for example, I guess, in the risk spectrum, to take more risk if it's a smaller amount if we can maybe modify the 2 percent default rate so that we can help bring that business to the U.S. at the early stages when they really need our help as -- and, you know, that's especially -- I see in my world, in aviation, that I think it's going to be critical. So anyway, so that's -- and then, as I mentioned, we're developing a preapplication screening template to expedite review and get folks answers as quickly as possible. CHAIR HEITKAMP: So it's kind of a triage. MR. FIORE: Exactly. CHAIR HEITKAMP: You know, you're not going to qualify. Don't leave any -- MR. FIORE: Yeah. Yeah. Right. Right. So if the answer's no, we want them to know sooner rather than later. And then, if we think it's got potential to -- that our board's risk appetite, you know, that they would approve it, then we would encourage them with the full application and do the enhanced -- the entire due diligence process. And so, back -- I'll now turn it back over to Scott. MR. CONDREN: That leads nicely into just a quick slide, just to sort of explain what will a successful applicant look like, sort of quick. You know, we have had some people reach out, like, hey, we heard EXIM can do domestic projects now. How do I get money? It's sort of, like, well, it's not quite that easy. So we'll get those -- how much to get -- how much do you currently export, how EXIM -- how will the EXIM Bank be associated with expanding or maintaining exports? I'll mention that's important as our first step. There has to be special inspection, and you need to scope the use of proceeds. This isn't a general liquidity facilitator that help -- you have to explain to us what you want to -- what you need the money for and look into it. The jobs, just outlining how many jobs there are, helps us up front go, okay, this is how much money you may qualify for, rather than just having to dig into that. And then, our other requirements are kind of our standard requirements for underwriting these very little projects. You know, we talk about three years of audited financial statements for a project finance that -- and, obviously, which exists, reports on projects which exist. So there's, you know, nuance. Again, these are our standard requirements that -- this is a useful slide to give to potential applicants so they understand what we need. Also, this links to other information on our website. And with that, I think I will turn it over to -- CHAIR HEITKAMP: Questions? MR. CONDREN: -- okay. Questions. MEMBER HECK: When would you anticipate making your first Made More in America deal? MR. CONDREN: It is hard to say, but we are actively underwriting a transaction now. It's gone through the initial stages of our review. That's why it's on our website. It's a small steel project in Texas. We hope to move that forward fairly quickly, but there's still some wrinkles that we're -- we want to look into it. You know, if a deal is the United States and it was easy, they probably wouldn't be coming to us. CHAIR HEITKAMP: Other questions? Comments? One of -- I'm a big fan of this project, but this goes back to Debbie's discussion, which is -- if I'm Pat Toomey -- let's just be, like, out there -- and I want to do it in the bank, and this is a program that has that potential of really creating controversy, I mean, I -- and just so you know, I'm a fan of this program. But -- MR. CRUSE: You didn't read the editorial by the National Taxpayers Union that came out yesterday? CHAIR HEITKAMP: I haven't seen that. No, I didn't see it. Same thing? MR. CRUSE: You might want to do that. Oh, yeah. CHAIR HEITKAMP: Yeah. But my point -- was it his? MR. CRUSE: Yeah. It's called the mission creep. CHAIR HEITKAMP: Oh, mission -- oh, yeah. MR. CRUSE: Unnecessary mission creep. CHAIR HEITKAMP: Yeah. And so, just from our standpoint, just knowing that there's really good documentation. And I know that adds a level of bureaucracy here that is not, you know, maybe warranted if we didn't have the level of scrutiny, but this is something that, you know -- I mean, he will have even more time for mischief on the off side. MR. CONDREN: Maybe I'll put it over to Jenna's slide that addressed that we actually -- I did not get into the weeds of the documentation, but we are going to be requiring, you know, annual reporting to export performance and making sure you are exporting. If you're not exporting, you're going to give us a plan to export more, and if it continues to fail, we will start charging penalty interest rates. CHAIR HEITKAMP: Have you thought about also, you know, the ability, now that you're doing -- I mean, this is really bridge financing, right? So -- we wouldn't get it otherwise, so we want to accelerate this program. But if it works, there should be an ability to do a work up for EXIM, you know, to kind of look at restructuring, take you out of the deal. Are you looking at that on the tail? MR. CONDREN: So, that poses challenges to EXIM because of FCRA, the Federal Credit Reform Act. It's hard for us to -- we have to be meaningful, essentially. When we -- when we book the loan, we basically prepay Treasury what we think the profits are going to be, so we need to make sure we get all that amount of money in. So, it makes, sometimes, prepayments not as economically attractive as you would maybe like. David Fiore actually spent a long time looking for a solution to that, and he came up with one, but it just ended up not being super attractive, I think, to provide, like, a bridge backstop on this program. Yeah. CHAIR HEITKAMP: But I mean, I think -- I think if you're looking for, you know, kind of policy fixes that can in fact immunize you from criticism later on, getting in and out of these deals fairly quickly would seem to be to the benefit of people who say this is mission creep but also, you know, kind of limiting the exposure of the EXIM Bank. MR. CONDREN: Yes. MR. FIORE: Can I just make a point? There is nothing in our documentation that prevents any borrower, whether it's our regular or export, from prepaying. A lot of that is driven by the interest rates. During the -- during the pre-COVID, we were seeing an enormous number of airlines prepaying their EXIM Bank guaranteed aircraft transactions because the interest rates were so low. They could -- they could do a sale leaseback with the lessor, pay down our loan, and we were -- our aircraft portfolio even before the pandemic or during -- before the pandemic decreased significantly because of where the interest rates were relative to where they were when they made the loan. So, perhaps something -- I mean, something like that could be worked into our -- I mean, it will be worked into our documentation for these transactions because they will always be able to prepay. But as Scott mentioned, if we're doing a direct loan, if it's a fixed rate deal, there will be a -- they call a prepayment penalty. So, again, sometimes it's worth paying that because interest rates have gone so far in one direction. But I think, you know, that's always sort of an option. MEMBER HECK: It begs the broader question about what you all are experiencing in a rising interest rate environment in terms of demand for products and services. MR. FIORE: With more people coming to us is rising demand. MEMBER HECK: And is that -- I mean, because we haven't been in this environment for, you know, half a generation plus. So do you expect that to continue, David? MR. FIORE: I think so. I think some folks are starting to come to EXIM Bank for some of our aircraft and helicopters and other financing because they can't get financing, or it's not financing that makes the transaction economically viable. And so, they're knocking on our door and saying, hey, could we consider EXIM Bank? I wonder if the same will happen, likewise, -- MEMBER PINHO: I can -- I could attest to that. I mean, I'm on with you. I go to a lot of trade shows, and especially -- even large multinationals, large U.S. corporates that for most of the past decade plus -- they moved away from EXIM Bank. They were doing the deals directly, some with private insurance, without private insurance, but keeping it on their books. Now we have export managers, which is our main contact. I mean, trying to get financing, get the transactions down. We cannot do that anymore. We need to find a banking partner, and the banking partner is EXIM Bank. Because even some -- even the gap because of the stronger U.S. dollar, now they need to provide terms. It's that we cannot carry them any -- the high interest rates. We cannot even compete. We have to provide terms, and the only way you can get longer terms is EXIM Bank. So, yeah, we're already seeing a big pent-up demand for 2023 and beyond. CHAIR HEITKAMP: And that goes beyond this. Yeah. MEMBER PINHO: Way beyond this, yes. CHAIR HEITKAMP: Jim, could you make sure that the Advisory Board gets a copy of whatever kind of external dialogue there has been on the Made in America program? You know, I hadn't seen this, probably wouldn't have seen it. I used to read Tax Notes regularly, being a former tax collector. Huh? MEMBER PINHO: Sorry. MEMBER V. SHARMA: That's from PNC equipment. MEMBER PINHO: Yeah, I mean, I cannot speak -- just as the applicant can't speak for all commercial, it is the 8 percent. It is a challenge. That's one of the things that -- the projects in itself can be challenging. The 20 percent is challenging for a bank to take risk. And that might -- that's one of the things we have to -- going to your Pat Toomey, being on the other side, one of the one -- the authorizations that were -- they're trying to move EXIM Bank out, and we said you cannot force a bank to lend. You cannot force a bank to lend. I mean, there's no pathway you can do that. I mean, and the same -- that's one other thing. You're going to make more -- you cannot force -- I mean, even if we're providing you the 80 percent guarantee, you cannot force me to lend because I have to take the 20 percent, and I have internal processes that I have to address that. So that, to me, that's the challenge. I mean, the 80 -- the 20 percent is impactful. You can't deny it. Especially the project itself, the risk involved, the good point of all of this is it is U.S. located. MR. CRUSE: That's right. MEMBER PINHO: That's -- if it was outside, if this was, like, in an opposite -- like it was a EFC deal doing 80 percent perform more? Forget about it. I mean, but -- MEMBER V. SHARMA: You want data to sustain -- MEMBER PINHO: -- define the point that you need to define. Which clients, which size, which structure can you use to cover it? Because even 20 percent is challenging for a bank, you can't deny it. And then, again, you cannot force me to take that 20 percent risk. CHAIR HEITKAMP: But the point that I'm making is that if I'm Pat Toomey, I say, quit telling me you're an Export-Import Bank. You're a development bank where the risk is being taken by the American taxpayer. So that's what -- that's what he's -- now, I can debate that with him, but once you make this transition, which is what Made in America is doing, you are -- you're fundamentally changing -- the mission creep. Now you're fundamentally changing the nature and the purpose of the EXIM Bank as an Export Credit Agency. (Simultaneous speaking.) MEMBER PINHO: And I mean, but within the scope of the supply chain, enhance the supply chain, that's what we have to develop. CHAIR HEITKAMP: Yeah. No, I get -- I get the need. I'm just saying, this is the vehicle the administration has decided to utilize. We're full onboard, the -- our Board of Directors. We're just Advisory Board, but my advice is turn square corners with this and try and get in and out as much as you can, because that will inoculate you from criticism later on. MEMBER FULGHAM: But Senator, wouldn't you also be inoculated if this is a success story, as Denny said earlier, that how many jobs are we creating? So, if we get 50 projects in place that are creating X amount of jobs, and it's a new product that EXIM is providing, it's just -- it's not changed. The charter is just one more demand that the public is asking for in regards to creating more jobs. I mean, do you make the political argument that way? CHAIR HEITKAMP: And once a week, I went to the floor to talk about American jobs and the impact of the EXIM Bank, and they shut it down for four years. So -- MEMBER HECK: The EXIM Bank, which transferred billions of dollars -- CHAIR HEITKAMP: Yeah, to the Treasury. MEMBER HECK: -- to the federal Treasury? Who had a default rate that was a fraction of the private sector? CHAIR HEITKAMP: Yeah. We could not have had a better argument, yet one or two well-positioned people could really -- I mean, part of that was Shelby. MEMBER HECK: Don't be overly rational because -- (Laughter.) (Simultaneous speaking.) MEMBER FULGHAM: I got it. I got it. CHAIR HEITKAMP: Facts? Facts? MEMBER FULGHAM: Well, we're changing, right. We're transitioning. MEMBER HECK: But the bottom line the chair is making, I'm supportive of this, too. This is a big change for the EXIM Bank, so turn the square corners. MEMBER MONSANTO: How was EXIM selected for this versus another agency? MR. CRUSE: So, at the time, there weren't many choices. MEMBER MONSANTO: Yeah. MR. CRUSE: You didn't have the CHIPS Act. You didn't have the time. You had a lot of capacity. We still have a lot of capacity -- MEMBER MONSANTO: yeah. MR. CRUSE: -- and not many alternatives. And we had the expertise in building the projects. MEMBER MONSANTO: Right. MR. CRUSE: Financing projects. MEMBER MONSANTO: Right. MR. CRUSE: So it was sort of like, okay, why can't you do the same thing? We just had built a chip plant in Germany. MEMBER MONSANTO: Right. MR. CRUSE: I mean, we had just done various other things. So, okay, if you can do it in Germany, you can do it here. MEMBER MONSANTO: And would it be done in collaboration with the Department of Energy programs or consult Transportation? MR. CRUSE: We correlate, make sure we're not -- and sometimes we have co-financing with them. MEMBER MONSANTO: Yeah. CHAIR HEITKAMP: So, the point would be bring all -- MEMBER MONSANTO: Assets. Yeah. CHAIR HEITKAMP: Yeah, and that these deals are going to be -- MEMBER MONSANTO: All the tools. Yeah. CHAIR HEITKAMP: Right. MEMBER MONSANTO: Yeah. MEMBER GONZALEZ: But that's -- it is interesting because there was a question from them, a sponsor looking into the program for -- it's in critical minerals development. But they're accessing other sources, such as IRA, and they're asking is this double dipping? You know? So if there's, like, a clearly defined -- yeah, EXIM Bank can participate in transactions where there's access also to IRA -- MR. CRUSE: Which I don't -- so, Scott can give you the details. MR. CONDREN: Yeah. Yeah. So, if there's no reason from our perspective -- I mean, we have to be cautious on exactly that, you know, not using other U.S. government money to pay our fees. But a project, from our perspective, could, in theory, utilize multiple sources of capital. DOE to LPO has slightly different rules, especially if you're talking about their ATVM versus Title 17. The Title 17 gets really hard for a project to get any other federal financing, and ATVM is a little bit easier, so there's some flexibility there. I did -- not to derail -- I know we did ask Santander to speak, and they prepared a slide for us. I want to make sure they got their thoughts and opinions out as well, because they can describe the opportunities and also some of the challenges from commercial banking. MS. BARZELAY: Yeah, a lot of things we have already touched on here. So, and -- you know, I wanted to first say we want this program to succeed. You know, it's in our interest. It's in the United States' interest for this program to succeed. And, you know, we understand what you're up against. I used to work at USTR. I totally -- I got it. It's a lot of box checking and interagency process and WTO and everything. So, you know, as Stephanie says, we originally contemplated, you know, applicability of this program. And I think, you know, all the commercial banks -- this was announced in April and, you know, not a coincidence what was happening in the world at that time. We thought it was going to be LNG exports. You know? We thought it was going to be that, and then thought about semiconductors. Now there's a new solution for that. So, you know, we're looking into new avenues of applicability, and we think that's going to be industrial manufacturing, raw materials, commodities, that kind of thing. But, as the senator mentioned, we need to look further down the supply chain. You know, rare earths are only in certain places, and, unfortunately, you can't make them in America if they're not here already. So, you know, there's a lot of demand from U.S. exporters for those to support their manufacturing, and if we don't look further down the supply chain and try to support them in friendlier countries through, perhaps, this program, other programs, you know, we're going to continue to lose out. So, that's where we see a really big opportunity here. I know it's really hard to fit into the puzzle of where EXIM can work. But, you know, we'd be remiss if we didn't -- if we didn't mention that. You know, there are quite a lot of challenges. We think that, you know, between the export nexus, the requirement for additionality, and this 80 percent guarantee changing the pricing, I mean, I don't think it's as much a matter for us as our bank's risk appetite. And so, these borrowers, it's intensive for them. You know, these are sophisticated borrowers that have a lot of access to capital and, you know, if they're able to achieve 25 percent of exports, they -- again, they probably don't need U.S. EXIM, right? So, if we -- if we want this to be successful, we need to be a little bit flexible on, you know, at least one of those pieces of the puzzle. And then, you know, it's gone -- and you probably heard us say this over and over again but, you know, PEFCO is important, and especially in a rising interest rate environment, it's important to have a funding agent that works with U.S. EXIM and can buy those assets and set a market price and all of that kind of stuff. And, you know, with an 80 percent guarantee, we can't -- you can't top PEFCO. So, that's really -- it's important that we're able to bifurcate the risk, the 80/20. And then, you know, I think the other commercial banks and the -- anyone who's worked on a U.S. EXIM deal knows about this, the Cargo Preference Act and the MARAD requirement, and it's especially onerous for U.S. EXIM. U.S. EXIM has to have 100 percent U.S.-flagged vessels for any imports of capex. Now, every other U.S. agency working with civilian contracts only has to get up to 50 percent. So, maybe that's a -- that's one, you know, flexibility that can be worked around because this is a domestic initiative. I don't know if Senator Toomey will like that, but -- CHAIR HEITKAMP: He'd repeal the Jones Act tomorrow if he could. Don't worry about it. That's not -- that's not his problem. I mean, that's -- the Jones Act is -- I mean, there's people from organized labor here who can make the argument and -- right? I mean, so, you know, the important thing is to really be thoughtful every step of the way, and it just -- one thing that I'm assured of, listening to this presentation, is you have been. So, I mean, you don't need to get advice from us on, you know, kind of think through these problems. The question is, where are the things that we can do to help make it successful but also not create a huge political problem for the EXIM Bank? And so, we want you to be successful, but we also don't want this to -- because it is outside of, you know, kind of a traditional ESA, right? So -- role. And so, just -- I think the one thing that I would say to all of you, you know, the Advisory Board can read as little or as much as what they want. I think, as you move forward with this, think about us as needing to be educated when we come to a table like this so that we cannot go through, you know, kind of the thinking that you had, but really be sophisticated in the kind of advice we can give you. I mean, right now, we're your sounding board, right? Isn't that the role that you really see? Right? And what Denny and I are saying is, yeah, we're with you, but let me tell you: if we were in Congress, still there, this would create a lot of eyebrow lifting. MEMBER HECK: Both eyebrows. CHAIR HEITKAMP: Huh? MEMBER HECK: Both eyebrows. CHAIR HEITKAMP: Both eyebrows? I can do one. MEMBER HECK: Why 25 percent? MR. CONDREN: Sure. Or, Jim, do you want to -- MR. CRUSE: Well, why not higher? Why not lower? I mean, basically, this just gets to the point that we have to have something. Fifty percent seemed too much. Ten percent seemed too low. Twenty-five percent seemed about right. Now, that is -- you got it. (Simultaneous speaking.) CHAIR HEITKAMP: A reasonable man standard, right? MR. CRUSE: Right. CHAIR HEITKAMP: Yeah. MR. CRUSE: There was nothing guiding that except the gut feel of what was too much and what was too little, and then we reduced it for transformational and others. Yeah. MEMBER PINHO: But one aspect, though. It's right here on the board and goes also with the -- one thing that will be difficult is -- what's the maximum term again? MR. CONDREN: It's no maximum term. MEMBER PINHO: There's no -- because that -- MR. CONDREN: It has to be, you know, commercially viable. MEMBER PINHO: Commercially viable, but also with a SPEC 18 years going, again. What is the bank appetite for 18 years? Commercial banks might not have the 18-year appetite. We do have, at EXIM Bank, 18-year loans in the book, but I can tell, the bank says no more 18-year loans on the book because it triggers a whole bunch of other internal controls and everything else that commercial -- it's not as attractive. That means the alternative is right there. PEFCO. And you can put in PEFCO in the presentation. People start asking, what is PEFCO? That's more ammunition, even against the whole program. Sorry? MR. CONDREN: The chair would like to know what PEFCO is. MEMBER PINHO: Okay. PEFCO is Private Export Funding Corporation. CHAIR HEITKAMP: Oh, okay. MEMBER PINHO: It is a conduit for EXIM Bank paper. It's owned by commercial banks and some industrial companies. CHAIR HEITKAMP: So it's like a clearinghouse? MEMBER PINHO: It's not a clearinghouse. (Simultaneous speaking.) MR. CRUSE: It provides liquidity to our guarantees. MEMBER PINHO: And there's -- last year or the year before, there was a renewal of the special agreement between EXIM Bank and PEFCO. MR. CRUSE: 2020, yeah. MEMBER PINHO: 2020? MR. CRUSE: '21. MEMBER PINHO: 2020. So, two years ago, there was a renewal. And it's been in place since 1971. So that -- it is -- and there had been articles when the PEFCO reauthorized -- I mean, not reauthorization, but the agreement with EXIM Bank for a renewal. There were significant attacks against PEFCO, too. MR. CRUSE: There still are. MEMBER PINHO: There still are. So if -- for this to work, and you need PEFCO, all they need to do is kill PEFCO. MR. CRUSE: Which they're in the process of doing. That's another issue we can take up. CHAIR HEITKAMP: Well, I mean, we probably should know more about that. You guys -- you guys have all been so incredibly patient to go a little bit over. I mean, I think we've had a great discussion. But, again, communication back to EXIM, communication back to me. You know, we need to talk about this. We need to talk about that. We'll be probably virtual next time. But just really, really -- you were selected to be on the Advisory Board for a reason, right? It's not just -- it's not just to put it on your resume or whatever. Because you have expertise in what you're doing, and so we want to be value added to the EXIM Bank. And so, let's have a great next year. Yeah? MEMBER A. SHARMA: I just wanted to say something. I'm learning so many new things and absolutely not -- I don't even know all the terms and all that that are being discussed out here. I immigrated from India in 2005, and at that time, I was working in -- as general manager of pharmaceutical units that were 100 percent export oriented. So, when we wanted to make something and export it, the one export market every company was looking for was the United States of America. And that's why I was an expert in the U.S. FDA and the rules that guide them, so that all the bulk drugs and et cetera that we make are being exported to the U.S. Now, those companies got various benefits from the government, for example, excise tax, everything, from making a 100 percent export. So, there was no 25 percent, 100, or 50 percent or anything. Anything that got made was 100 percent exported to the U.S. and to Canada or to Europe. So, something has to benefit -- if we want to make more in America and make something that needs to get exported, first of all, we need to have a 75 percent market within the United States for that, whatever has gotten made, and then be able to export for 25 percent of it. If it has to be 100 percent made export oriented, then there has to be more benefits to that to anyone who wants to take that risk, and even invest their own money or find the money somewhere. But that 100 -- what are the markets out there? Where can they export? Is there a market out there? I know from experience that U.S. was the market everyone was looking at, from experience, and I've worked in many different companies. Everything was -- everything was coming to the U.S. We got approvals from Australia, from Europe, but -- I mean, Australia have given -- earned money by giving approvals from the Therapeutic Goods Administration, but not one kilo of material rights to Australia. That was just used as a jumping board to get to the U.S. FDA, through the U.S. FDA. So, if we want to look at imports, we have to provide more information as to what are the things? And I think what we're looking for is, we could do this or we could do this or we could do -- what are the things that can get exported? Which are the markets out there? Who's going to invest in those things? Because if there is a market potential out there, then maybe somebody will invest their time and money and dollars and everything in that, looking at that potential, and then the 80 percent in everything because that will be -- get governed by the profits that can be made. But if we don't have an access to that knowledge as to what is available out there, can we -- can the U.S., with the kind of costs that we have, even export? I mean, I know I'm a small business. When we make in America, we don't have distributors and agents because we can mark it up only so much, so that -- so as to be able to enter other markets out there. I was recently on a visit to South Africa. They said, we can't buy your product because it's too expensive. Even at cost price, we won't be able to export it out there. So how -- where is that market out there, when we say Made in America? CHAIR HEITKAMP: It's getting tougher with dollar values. MEMBER A. SHARMA: Exactly. So, I think that's one place where -- CHAIR HEITKAMP: I mean, the currency risk for -- exactly. So -- MEMBER A. SHARMA: We're helping our distributors by decreasing our costs. We said we're going to help you by giving you, you know, a larger credit timeline, and we're going to give you a 15 percent discount just to help with the American dollar. CHAIR HEITKAMP: Uh-huh. Yeah, no. And, you know, look at how much you have to underwrite it because of high dollar values. I am going to close it because you guys have all been so generous with your time. I have to open it up for public comment. Is there any? MR. CONDREN: Nobody is on. CHAIR HEITKAMP: Nobody is on? Anyway, with that said, thank you all and I look forward to our next discussion. Let's stay in touch. Jim, you'll send us some stuff on kind of a -- (Simultaneous speaking.) CHAIR HEITKAMP: As Owen said, next meeting, we want -- we do this quarterly, right? MR. CRUSE: Right, but you have to have a meeting sometime in May or so because of the Competitiveness Report. And so, then, you need to have one before May at any time but not later than the middle of May for the Competitiveness Report. CHAIR HEITKAMP: So we need to schedule two between now and the end of May? MR. CRUSE: Yeah. CHAIR HEITKAMP: That -- you would prefer that? MR. CRUSE: Right. CHAIR HEITKAMP: So, let's look at maybe February or March, and then look at a mid-May because that will give Jim and his team and the Advisory Committees more time to submit -- MR. CRUSE: Because you're going to -- you're going to get this document that we endorsed on, which is much thinner now. But -- CHAIR HEITKAMP: It's really -- MR. CRUSE: -- have them read it. CHAIR HEITKAMP: -- it's a great document. MEMBER HECK: Reiterating your request that we be given notice of the dates with as much -- MR. CRUSE: Right. That's why I'm bringing it up now. CHAIR HEITKAMP: Let me -- let me talk to the EXIM folks and we will send out a notice of dates. MEMBER HECK: Save the date. CHAIR HEITKAMP: Yeah. A save the date. I think the one -- for your planning, and I guess I'm in charge. I think, for your planning, think about being here in May, but we would probably do the other one virtual. There'll be an opportunity to probably come here if you're more comfortable with that, but there's no reason not to do the next one virtually. Okay? Is that a plan? You got a plan. Yay. Thanks, you guys. Great discussion. (Whereupon, the above-entitled matter concluded at 5:44 p.m.) 107 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com