Commentary: Getting A Grip On Trade SanctionsPaul Magnusson
Finally, Capitol Hill may be ready to admit that trade sanctions--like Halloween candy and the noontime sun--can be too much of a good thing. A bill wending its way through Congress would impose new discipline on the growing use of trade embargoes to pursue feel-good policy goals, like pressuring China to allow freer religious worship. Even better, the measure would focus federal sanctions on more legitimate purposes, such as fighting weapons proliferation, terrorism, and environmental degradation.
Unilateral trade sanctions have become too costly an alternative to diplomacy. In the past four years, President Clinton has signed 62 laws and executive actions targeting 35 countries, according to the National Association of Manufacturers and the State Dept. That accounts for more than half the sanctions imposed in the past 80 years. According to the President's Export Council and the Institute for International Economics, the direct cost to U.S. exporters in lost sales in 1995 alone was as high as $20 billion. An estimated 250,000 jobs also disappeared, and no one can measure the damage to relations with angry allies.
CAREFUL TARGETING. Still, the use of trade sanctions is spreading. Another 94 sanctions against 21 countries are pending at the federal, state, and local levels, according to an anti-sanctions group, USA Engage, a coalition of over 500 exporters. New York, New Jersey, and Rhode Island recently joined Massachusetts and Oakland, Calif., in developing their own micro-foreign policies. Among the countries targeted: Pakistan, for persecution of Christians; Switzerland, for hoarding Nazi gold; and Indonesia, for human-rights abuses.
But how do you stand up for U.S. consumers and taxpayers, who are ultimately harmed most by trade curbs, without appearing to condone persecution of Buddhist monks and Protestant missionaries? The new bill--sponsored by Senator Richard G. Lugar (R-Ind.) and Representatives Lee H. Hamilton (D-Ind.) and Philip Crane (R-Ill.)--wouldn't end sanctions, but it would require more careful targeting. The Congressional Budget Office would have to evaluate a sanction's impact on the U.S. economy. Sanctions would end after two years unless renewed by the President. Existing contracts would be exempted from sanctions. And most important, the bill would encourage cooperation among allies to impose multilateral sanctions, which are far more effective.
Just as significant is what the bill wouldn't do: namely, affect any current sanctions or limit any future sanctions designed to enforce trade agreements, international environmental agreements, or food safety. It also leaves the President with enough emergency powers to act quickly if need be, as the White House did in imposing economic sanctions against Iraq for invading Kuwait in 1990.
The bill, however, has two glaring shortcomings: Rather than trying to restrict city councils and state legislatures from practicing their own brand of foreign policy, it ignores them. Big mistake. The federal government should challenge such efforts in court as an imposition on its authority to conduct foreign policy. And the bill does nothing to repeal two 1996 laws that impose legally questionable secondary boycotts on foreign investors in Cuba, Iran, and Libya.
While it has strong backing from business and bipartisan support, passage of the sanctions-reform measure is far from assured. Human-rights groups and religious conservatives are suspicious of any moves they see as putting commercial concerns above U.S. moral authority. Indeed, it would be a mistake to ban unilateral trade sanctions altogether. Trade retaliation or its threat was key to ending apartheid in South Africa, to protecting marine mammals and sea turtles, and to focusing Beijing's attention on software piracy.
But the clumsy, scattershot use of sanctions kills their effectiveness as tools of diplomacy. When Congress returns next year, the "Enhancement of Trade, Security and Human Rights through Sanctions Reform Bill" will be ready for consideration. Lawmakers shouldn't waste any time in passing it.