Amb. John Bolton: ‘I Would Not Eliminate the Export-Import Bank’

HEWITT: “Two big issues, and I’ll come to the one about our looming confrontation with Iran in the Straits of Hormuz, but I’ve been talking yesterday and today about the reauthorization and reform of the Export-Import Bank. And I was reading up on the Chinese Export-Import Bank, and their China Development Bank, which together made loans of $110 billion dollars over the last, in ’09 and ’10, and who knows how much in the last few years. Are we crazy to be disarming in soft power areas like the Export-Import Bank by letting it die, Mr. Ambassador?”
BOLTON: “Well, I wouldn’t do it unilaterally, and I’d have to say my experience with export credits like this, which is what the guarantees and loans and so on amount to goes back to my days in the Reagan administration at the Agency for International Development, where the policy of the Reagan administration was that we’d be prepared to eliminate all these export credits if everybody else did, too. In other words, that everybody would give up this, basically this subsidy for their domestic industries. And I still think that’s the right thing to do. A subsidy for exports is kind of the reverse of a tariff. And the way you eliminate tariffs, not because it’s the most sensible economic thing to do, but because politically, internationally, it’s the only way to get it done, is if everybody lays down their weapons at the same time, their economic weapons. And we’ve got a mechanism to do that. That’s what I would do. But I would not eliminate the Export-Import Bank until everybody, the Europeans is where we were concerned back then. But now the Chinese, same thing, and I’d go a step further. I think it’s time to privatize the multilateral development banks – the World Bank, the Asia Development Bank and so on, with the possible exception of the African Development Bank, where I think it may still serve a useful function. But I’d eliminate, I wouldn’t eliminate them, I’d privatize all the regional development banks and the World Bank, too.”
HEWITT: “Yeah, and I’m open to any of these things and all of the reforms, but I am not open to saying to China’s Ex-Im Bank, their new Asian Infrastructure Bank and all these other things that they’re doing, hey, the field’s yours, go ahead, because we’ve got some conservatives who don’t believe that Solyndra was a good idea, which I agree with. But this isn’t Solyndra. This is just trying to keep the playing field level.”
BOLTON: “Yeah, well, what they’ve done is outflank the Obama administration, which likes all of this idea of more government, the government lending, more projects like that that allow the development banks and their economic planners to get into the nitty gritty of national economic planning. And it’s, you know, if you’re in favor of strengthening government, then that’s the way to go. But since the administration, our administration agrees with that, they’re not going to stand in the way of it. I really think we need to go back and do what Reagan tried to do – look at all of this over again. But in the meantime, to the extent that China is using subsidized export credits or this new multilateral bank they want to create to advance Chinese industry, to advance Chinese economic goals, and let’s be real, ultimately to advance Chinese political goals, we absolutely should not leave the field free to them.”