TRADE-U.S.: Business’ Anti-Sanctions Campaign Makes Headway

By Jim Lobe Reprint | | Print |

Jim Lobe

WASHINGTON, Jul 30 1998 (IPS) - A year-long campaign by U.S. transnational business interests against unilateral trade sanctions appears to be bearing fruit.

Fuelled by a potent farm lobby hit by plunging grain prices and shrinking export markets, the anti-sanctions drive has won several key battles in recent weeks.

It is also creating havoc among Republicans who find themselves torn between their historic loyalty to big business, their major source of campaign funding, and the Christian Right, whose ability to mobilise voters is critical to the Republicans’ hopes of retaining their hold on Congress in the November elections.

“We think we’ve been very effective on a number of fronts,” says Eric Thomas, spokesman for USA-Engage, a business lobby formed 14 months ago by the National Foreign Trade Council (NFTC), which represents more than 600 of the largest US corporations with multinational interests.

USA-Engage has still not achieved its top priority – passage of the Sanctions Policy Reform Act. If approved, it will make it more difficult for Congress to enact unilateral sanctions against foreign countries and give the president more discretion in imposing them.

But, discreetly backed by the Clinton administration, the bill appears to be gaining support and may be endorsed in early September by a bipartisan Congressional taskforce. Such an endorsement would likely ensure passage, possibly before Congress adjourns for the year around Oct 1.

USA-Engage also succeeded last week in at least temporarily derailing a bill that would authorise sanctions against countries whose governments are accused of persecuting religious minorities. The bill, a tougher version of which passed the House of Representatives last month by an overwhelming margin, was considered certain to sail through the Senate as recently as a few weeks ago.

“Next to the Reform Act, defeating the religious persecution bill ranks highest on our list of priorities,” says Thomas, who says US business is worried about the impact of such a law on major customers, such as Saudi Arabia, China, Pakistan, Indonesia, and Egypt.

The high-powered campaign against sanctions was launched in April 1997 to halt what its sponsors called an “epidemic” of such measures approved by both Congress and state and local governments to discourage economic ties with target countries, such as Cuba, Iran, Libya, Burma, and Nigeria.

Since the early 1990’s, Congress and the administration, according to the campaign, have imposed some 61 sanctions restricting or banning economic ties with some 70 countries, punishing them for activities ranging from human rights abuses and weapons proliferation to environmental destruction and tolerating the drug trade.

According to one widely cited study by the pro-trade research group, the Institute for International Economics (IIE), these sanctions have cost US business almost 20 billion dollars a year in lost exports. As a result, Washington is losing potential markets precisely at a time when US prosperity is increasingly tied to the global economy and international trade.

USA-Engage does not oppose all sanctions. But it insists that unilateral sanctions are largely ineffective unless, as in the case of US sanctions against South Africa in the 1980’s, other countries join in.

The chief sponsor of the Sanctions Reform Act, Republican Sen. Richard Lugar, has argued that sanctions have become the weapon of choice for a Congress and administration reluctant to take military or covert action against the target regime. “Sanctions are a way of having your cake and eating it, too,” he says. “You make a statement, and it appears to be cost-free.”

The campaign against sanctions made little headway early this year. In fact, new sanctions legislation, such as the religious persecution act, the Christian Coalition’s top foreign-policy priority, appeared poised for quick approval in both houses of Congress.

But events have changed the political equation. First, the Asian financial crisis has sharply reduced US exports to that region, especially in the agricultural, hi-tech and infrastructure sectors which had placed great hopes in Asia as the market of the future.

Second, the failure of other western nations to follow the US lead in imposing sweeping sanctions against India and Pakistan after their nuclear weapons tests effectively isolated Washington and exposed the limitations of unilateral measures.

Those sanctions took effect automatically under a 1994 law designed to discourage “non-nuclear” nations from going nuclear. The May tests dramatised the law’s ineffectiveness in achieving its major aim.

When it became clear that US grain producers and other powerful interests stood to lose hundreds of millions of dollars in exports if the sanctions were fully applied, Congress and the administration moved quickly to exempt key products.

At the same time, USA-Engage pressed its case through friendly journalists and newspapers. A flurry of anti-sanctions articles by widely syndicated columnists, with titles such as ‘Sanctions Frenzy,’ ‘Sanctions Addicts,’ ‘Sanctions Fever,’ and ‘The Snake Oil of Diplomacy,’ appeared in the nation’s press in June and July.

“It’s still hard to say that there’s been a sea change,” says Thomas. “But we’ve certainly changed the whole framework of the debate.”

At the same time, the administration, which had been split on the issue of sanctions for much of its tenure, came out decisively for the Sanctions Reform Act and against the religious persecution bill.

The biggest test now is whether the religious persecution act will be revived in the Senate. “We’re still optimistic,” says Jeffrey Taylor of the Christian Coalition. He conceded, however, that many Republicans, especially those representing farm states, were on a “sticky wicket” in deciding between the interests of “big business” and their grassroots constituency.

The religious persecution act is not the only challenge faced by the campaign, however. Democrats are lining up behind the International Child Labour Elimination Act which would curb aid and credits to as many as 62 nations accused of tolerating child labour.

In addition, a coalition of Democrats and right-wing Republicans is pushing a new bill that would prevent the federal government from challenging any local or state sanctions law in court if the World Trade Organisation decides that it violates international accords.