Marty Clubb credits the U.S. Export-Import Bank for giving him the security he needed as a Walla Walla Valley business owner to expand his wine sales in Europe and Asia.
Now, Clubb, managing winemaker of L’Ecole No. 41, sells 4,000 cases of wine in 20 foreign countries, making up about 10 percent of the Lowden winery’s annual business.
The bank acts as an insurance program for small businesses like L’Ecole, which has about 15 employees. It finances and insures the purchase of U.S. goods by foreign customers.
Having the insurance through the Export-Import Bank helps Clubb get loans to pay for expenses such as grapes, barrels and bottles, he said.
But the future of the bank and the 180 Washington state exporters that use it is at risk. The bank expires on Sept. 30, leaving only a small window left for Congress to reauthorize its operations.
Sens. Maria Cantwell and Patty Murray are among the sponsors for a recently introduced bill that would reauthorize the Export-Import Bank for five years. It also would incrementally grow the bank’s spending authority to $160 billion from $140 billion over four years.
Cantwell, who visited L’Ecole Monday, is concerned the Export-Import Bank is going to be used as a political pawn during an election year, she said. Opponents, including the Heritage Foundation, a conservative think tank, are trying to get the bank killed.
The Heritage Foundation claims the main role of the bank is to subsidize exports and that free trade is better.
Supporters say the bank levels the playing field, since 60 other countries have similar banks helping their own businesses export.
And Cantwell says the bank doesn’t cost taxpayers, returning $1.05 billion to the treasury last year, helping pay down the federal deficit.
“It’s not something that you should want to get rid of if you want to help the economy,” she said.
Supporters also say the bank is something the Washington wine industry will need to use more in the coming years as the state’s infant wine industry continues to expand.
About eight Washington wineries use the bank to support export efforts now, Clubb said. But in five years, he thinks that easily could grow to 50.
Other wineries that have used the bank include Prosser’s Airfield Estates and Red Mountain’s Hedges Family Estate.
“I think we are just barely on the cusp of the real opportunity,” Clubb said.
L’Ecole, which is poised to start its 32nd harvest, started exporting more than a decade ago, but only became a client of the Export-Import Bank a few years ago, Clubb said. He hopes to be able to continue to use the bank as he tries to grow exports from 10 percent of the winery’s business to 25 percent.
“We were nervous about the risk involved in selling wine abroad,” he said.
Access to the Export-Import Bank becomes more critical as Washington wines gain international attention, said Duane Wollmuth, Walla Walla Valley Wine Alliance president.
For example, L’Ecole recently won the top award for Bordeaux varieties more than 15 pounds at the prestigious Decanter World Wine Awards in London. The award was for its 2011 Ferguson Vineyard, a new red blend from L’Ecole’s youngest vineyard.
They sold out of that wine in four days after the award was announced, Clubb said.
Red Mountain, near Benton City and West Richland, also has been gaining international acclaim as wines made with Red Mountain grapes have earned top scores.
British Columbia’s powerful Aquilini family bought 670 acres from Kennewick Irrigation District in Red Mountain, the state’s smallest growing area. Duckhorn Vineyards of St. Helena, Calif., planted a 20-acre estate vineyard on Red Mountain earlier this year and will release its debut 2012 vintage of Canvasback Red Mountain Cabernet Sauvignon this fall.
“Washington wines have never been hotter than they are today,” Clubb said. “The potential for future growth is amazing.”
The bank already has supported about $70 million in wine exports since 2007, Cantwell said.
Exporting represents a significant risk for a business, Cantwell said. The bank is a critical tool for exporters, especially small businesses, she said. Small businesses are where Cantwell expects to see most of the job growth in the next decade.
In Eastern Washington, the bank has supported $63 million in sales from 15 businesses, 14 of which were small businesses.
Locally, Kennewick’s ConAgra Foods Lamb Weston, which makes french fries and other frozen potato products, and Whitby Farms of Mesa, which grows alfalfa and timothy hay, also have used the bank, according to federal data.
Washington state and the rest of the U.S. have a significant economic opportunity to expand exports of products such as wine, Cantwell said. The global middle class is expected to grow from 2 billion to 4.9 billion in the next 15 years, creating more of a demand for U.S. products.
Washington already is a big export state, with one in three jobs tied to exporting. Statewide, the bank supports about 85,000 jobs.
Cantwell is urging federal legislators to make reauthorizing the bank one of their first actions when they reconvene in the coming weeks. She hopes to avoid a three-month renewal that will just bump the bank’s fate until after the election.
“What we really need is a five-year program that people can count on,” she said.
Business deals take some time to negotiate and close, which is why the longevity of the bank is important, Cantwell said.
She believes there is enough support to continue the bank for the full five years if it is brought to a vote in both House and Senate before the expiration date.
Kristi Pihl: 509-582-1512; firstname.lastname@example.org