End Sanctions, Corporations Tell Feds

In a new, 30-page report, the NAM catalogues 61 U.S. laws and executive actions authorizing unilateral sanctions that have been enacted in the past year against 35 countries. The report decries what it calls a growing trend in U.S. foreign policy and cites a range of measures, from full trade embargoes to bans on aid and export controls.

"Unilateral sanctions are little more than postage stamps we use to send messages to other countries at the cost of thousands of American jobs," says NAM president Jerry Jasinowski.

"The fact is, unilateral sanctions simply don't work," according to Tracy O'Rourke, chairman of Varian Associates, a hi-tech California-based manufacturing firm.

"If we are serious about competing in the global marketplace, we need to be seen as a reliable trading partner," says O'Rourke. "Unilateral trade sanctions give American businesses the stigma of being unreliable."

Led by NAM and a new anti-sanctions coalition, the National Foreign Trade Council (NFTC), the corporations have been galvanized into action by several recent developments which they say point to an alarming trend.

The first was passage just one year ago of the Helms-Burton law which tightens and extends the 35-year-old U.S. trade embargo against Cuba. Under that law, foreign companies which gain an interest in property expropriated by the Cuban government can be sued for damages in U.S. courts by former owners of that property.

The law has angered Canadian, European, and other governments which say that its extraterritorial reach violates global trade rules. While most U.S. companies are not interested in trade with Cuba, the new report notes that the law has "caused a whole new set of commercial problems" and may subject U.S. companies to retaliation.

In a similar action, both President Bill Clinton and Congress took action in 1995 and 1996 to ban bilateral trade with Libya and Iran and to penalize foreign companies which sign major contracts with either country for exploration or exploitation of their energy resources. This, too, prompted howls from Washington's European allies, but also angered U.S. companies which were among Iran's most important trading partners until just two years ago.

A third development which annoys businesses here is the proliferation of local and state "selective-purchasing" laws, directed primarily against Burma, Nigeria, and, most recently, Indonesia. These laws, which are not covered by the new report, ban local governments from contracting with companies doing business in the target country. Such policies were especially effective in the anti-apartheid movement of the 1980s.

Fourteen measures have been imposed against alleged government sponsors of terrorism, including Cuba, Iran, Iraq, Libya, Nicaragua, North Korea, Sudan, and Syria. Another nine sanctions are designed to prevent the proliferation of nuclear technology to countries including Iran, Libya, China, Cuba, and Pakistan.

Other types of sanctions include measures to promote political stability in Afghanistan, Palestine, the former Soviet Union, Rwanda, Angola, Yugoslavia, and Zaire; anti-drug efforts in Cuba, Colombia, Burma, Afghanistan, Nigeria, and Haiti; the observance of worker rights in Pakistan, China, Mauritania, Saudi Arabia, the United Arab Emirates, and Qatar; and environmental protection in China, Taiwan, and countries where sea turtles are caught in shrimp fisheries.

Altogether, according to the report, countries facing U.S. sanctions "represent 2.3 billion potential consumers of U.S. goods and services" -- roughly 42 percent of the world's populations -- and $790 billion worth of export markets.

Unilateral economic sanctions, according to the report, "rarely work" and often "provide an external scapegoat for well-entrenched regimes to compensate for domestic failings."

In addition, such measures also make it more difficult to maintain "an active American business presence (which) will do more to advance reform and democratization" in targeted countries than withdrawal. Finally, some sanctions -- especially secondary boycotts such as those against Cuba, Iran, and Libya -- may violate domestic law and prompt retaliation.

But sanctions supporters do not agree, especially with the proposition that unilateral sanctions are ineffective. Iran, for example, has admitted that it has had great difficulty in finding foreign partners for oil and gas development since the U.S. legislation took effect. And the Miami Herald reported this week that Mexico's Grupo Domos, Cuba's biggest foreign investor, intends to pull out of the country as a result of the Helms-Burton law.

"There's been an absolute flight of investment from Cuba in the last few months," according to Marc Theissen, press spokesman for Senator Jesse Helms, one of the authors of the Helms-Burton bill. Big business here is concerned about sanctions, because, "I think they want to make money."

The NAM argues that economic sanctions should be applied only if certain criteria are met: Washington should formally determine that the proposed sanction is likely to achieve its intended goal, which cannot be realized through less stringent measures; if goods and services denied by the proposed sanction are either available or likely to be provided by other countries, Washington should probably forgo action.

"All economic sanctions should be multilateral, except in the most extreme and unusual circumstances," according to the report.