It’s time to confirm the US Export-Import Bank Board for our economic security

The Senate Banking Committee has received President Trump’s nominees for the U.S. Export-Import Bank (Ex-Im) chairman and three board members. The Senate is scheduled to hold a hearing on the EXIM Chair on Thursday, and the other three board members await full Senate consideration, and the stakes couldn’t be higher.

It’s time for Republican senators to allow a yes-or-no vote on these nominees on the Senate floor.

Commerce Secretary Wilbur Ross just led a delegation of American business leaders to Africa, as part of the President’s Advisory Council on Doing Business in Africa. I am sure the delegation was shocked by the progress that China is making in Africa and realized that American business can’t take full advantage of our immense opportunities in Africa with a crippled Ex-Im bank. Our political dysfunction which keeps us from having a fully functioning Ex-Im Bank has real economic and geo-political consequences.

The three-year holdup with the Ex-Im bank resides in the Republican Party; some of its members see Ex-Im Bank as a form of corporate welfare. I disagree, and I think critics of the Ex-Im Bank need to have a good answer to the economic challenges posed by China. Today, 31 other OECD countries have an export credit agency like ours; the U.S. is the only G-20 country without a fully functioning export credit agency. The Ex-Im bank has not been fully operational since 2015, and this has severely limited the ability of the bank to support U.S. exporters and create U.S. jobs. We are unilaterally disarmed while others — especially China — are not. Are we prepared to be out maneuvered by the Chinese in Africa, Latin America and Asia by not using all our instruments of economic power?

Economically, China is gaining on us every day in Africa, South East Asia, Latin America and, soon, Eastern Europe. China uses its own Ex-Im bank to great effect. At the end of 2016, China’s Ex-Im bank had a lending stock of $346 billion. In 2016, Chinese export credit agencies provided $34 billion, helping to make seven out of the ten top global contractors Chinese, based on 2016 revenues. It doesn’t stop there: China is expected to invest a further $1 trillion in Africa over the next decade. China’s commitments to Africa are so large that, in 2017, Chinese exports to African countries were more than 4 times the total of U.S. exports to African countries. China’s total official finance in Latin America is $53 billion; in Africa, total official finance is worth $118 billion.

China’s Ex-Im bank, along with the China Development Bank, the Asian Infrastructure Investment Bank (AIIB) and the “New Development Bank,” are Chinese-led institutions mobilizing tens of billions of dollars for projects in Africa, Latin America, Asia and elsewhere. The New Development Bank is not yet fully operational but already has committed $1.5 billion in loans by the end of 2017, and the AIIB, also in its early stages, has approved $4.2 billion in loans since its inception. The China Development Bank has plans to lend $95 billion overseas.

Clearly, we need an international economic strategy, making full use of our instruments of economic power including a fully functioning Ex-Im Bank, if we want to offer something better than what China offers.

While China is eating our lunch, our Ex-Im Bank is running on fumes. With no five-member board quorum, the Ex-Im Bank can only finance up to $10 million per transaction. China is not restricted by these self-imposed restrictions and lends tens of billions through China’s export-import bank. There are $40 billion of transactions pending in front of the U.S. Ex-Im Bank board. These frozen transactions require a fully functioning board for approval, translating into more than 250,000 U.S. jobs.

I agree with this quote: “The last thing we need in an increasingly threatened world is to disadvantage ourselves while other nations enhance their own export-credit programs.” Who said this? Ambassador John Bolton, President Trump’s national security adviser. Ambassador Bolton understands the stakes and so does President Trump, and that is why the president sent up four very qualified nominees who are ready to get to work. They understand that the Ex-Im Bank helps American companies and American jobs — it’s an essential part of our economic security and influence.

Assuming the Senate banking committee votes in favor of this very qualified slate of nominees, the nominees deserve an up-or-down vote on the Senate floor. It is time to end this stand off and get the Ex-Im Bank back to work.

NOTE: This story as been updated from the original to clarify that the Thursday hearing is for the chair only and to correct the date since which the Ex-Im bank has not been fully operational.

Daniel Runde is a Senior Vice President and William A. Schreyer Chair in Global Analysis at the Center for Strategic and International Studies. He previously worked for the U.S. Agency for International Development, the World Bank Group, and in investment banking, with experience in Africa, Asia, Europe, Latin America, and the Middle East.