Economy & Trade, Headlines, Latin America & the Caribbean

TRADE-LATAM: The Boomerang Effect of U.S. ‘Sanctions-Mania’

Estrella Gutierrez

CARACAS, Aug 16 1998 (IPS) - Unilateral U.S. trade sanctions severely threaten or punish 68 percent of the world’s people, but they also have a “boomerang effect” against U.S. economic interests, which has sparked a heated debate in Washington on their usefulness.

The Venezuela-based Latin American Economic System (SELA), which groups 28 Latin American and Caribbean nations, has released a new report on the battle taking place in the U.S. Congress over the expediency of a foreign-policy instrument which is drawing an ever greater number of critics.

After decades in which diplomatic protests and demands from abroad for the elimination of such unilateral practices have failed to make an impression on the powers-that-be in Washington, the pressure of internal sectors could delay the application of or even overturn some of the sanctions, says the SELA report.

The issue will arise in the campaign for the Nov. 3 U.S. legislative elections, which will largely revolve around trade issues, according to SELA, which has an ‘antenna’ in Washington to monitor economic processes affecting the region.

Cuba and Colombia -directly- and Mexico -indirectly- are the Latin American and Caribbean countries that suffer the brunt of U.S. reprisals but, in practice, few have escaped what SELA describes as that country’s “sanction-mania.”

Today 76 countries put up with or are seriously threatened by one or more U.S. trade sanctions, says the SELA report, which quotes a study by the Washington-based Presidential Council of Exports.

Of the trade-related reprisals the United States has taken against other countries for actions it considered attacks on U.S. national interests, more than half have been enacted since Democratic President Bill Clinton took office in 1993.

In SELA’s view, that is because the U.S. Congress has been dominated by the Republican Party since 1994, and the relations between the executive and legislative branches are “more discordant than ever before” in U.S. history.

Congress is fighting to gain a stronger grip on U.S. foreign policy and limit presidential authority, and the most far-reaching sanctions approved since 1994 have included one or more clauses of compulsory application by the executive branch.

SELA says the “sanctions-mania” has triggered an increasingly virulent reaction from export sectors, particularly agriculture, due to the disadvantageous competitive situation in which sanctions place them.

Large U.S. corporations calculate that the country loses some 20 billion dollars annually due to what they criticise as “ineffective” sanctions, according to figures made available to IPS in Washington.

In 1997, transnational corporations, export firms and associations of exporters created USA-Engage, a lobbying group pushing for the elimination of the practice of sanctions.

Besides the sanctions set by Washington, regional and municipal governments have the authority to establish their own measures against other countries: 12 U.S. states, counties and cities have restrictions against countries ranging from Burma to Switzerland.

On Aug. 6, the Clinton administration succeeded in getting the House of Representatives to block by a narrow margin an amendment that would have kept the federal government from contesting state or local sanctions, which are banned by World Trade Organisation (WTO) norms.

The outcome of the current internal U.S. debate on sanctions will also have direct consequences for WTO agriculture talks that begin next year and for International Monetary Fund financing, says SELA, besides the significance it will have for the negotiations on the creation of a Free Trade Area of the Americas by the year 2005, which get underway next month.

National security is the traditional justification for sanctions. But lately increasingly influential church groups have been throwing their support behind bills on new global causes that have been springing up in both houses of Congress, such as the elimination of family planning programmes.

Nevertheless, those opposed to the use of sanctions have scored several significant tactical victories since May, according to SELA, although it is not yet clear whether a strategic change has been made or the conservatives will once again win out.

SELA interprets what occurred with the sanctions, based on a 1994 law against the proliferation of nuclear arms, that were slapped on India and Pakistan in June for their nuclear tests as a real watershed.

Pakistan is one of the United States’ biggest clients for wheat, and against the backdrop of the marked reduction in demand and crashing prices caused by the Asian meltdown, no market is superfluous.

Congress was forced to submit a bill providing for assistance to agricultural exports, which amends the 1994 law in order to bolster sales in that sector and to allow the president to suspend partly the application of the law.

Although the initiative was politically embarassing, the Senate unanimously approved the new bill in July, and the House of Representatives is expected to follow suit in the near future.

And in June, Clinton vetoed a law on sanctions against the proliferation of Iranian missiles. But the administration fears that Congress will drum up the two-thirds needed to overturn the veto, because the law was originally enacted with broad support.

The government has also made it clear that Clinton plans to veto a law on immunity in the face of religious persecution if it is approved, while in May the president reached an agreement with the European Union exempting that bloc from the sanctions stipulated by the Helms-Burton law against investment in and trade with Cuba.

USA-Engage told SELA that although in 1997 no one listened to its arguments that sanctions hurt U.S. citizens, a big change had been seen this year.

The clearest expression of that shift is a bill on improving trade and the observance of human rights through the sanctions reform, which would declare a moratorium on and revision of all bills that entail reprisals.

The bill, sponsored by Republican Senator Richard Lugar, would not affect existing sanctions – a concession designed to avoid a confrontation with the staunchest defender of sanctions, influential Republican Senator Jesse Helms, chairman of the Senate Foreign Relations Committee.

But along the way another initiative has emerged, a bill on thw rationalisation of sanctions, sponsored by Democratic Senator Christopher Dodd, which openly berates Washington’s 39-year embargo against Cuba, as well as actions against North Korea, Iran and Libya, as useless.

SELA sees Dodd’s bill as threatening the fragile bi-partisan support lined up by Lugar – but also as a clear sign that opposition to sanctions has taken on a force that was inconceivable not too long ago.

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