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US Businesses Fight Unilateral Trade Sanctions

From Donna Smith, <FreeBurma@aol.com>, Reuter, 21 August 1997

WASHINGTON, Aug 21 (Reuter) - U.S. businesses alarmed by a proliferation of trade sanctions by federal, state and local governments are pushing for legislation to make it harder to use commerce as a weapon in international disagreements. Sen. Richard Luger, an Indiana Republican, and Rep. Lee Hamilton, an Indiana Democrat, plan to introduce a bill next month designed to slow down the trend toward unilateral trade sanctions or at least force lawmakers to think twice before imposing them.

The proposed legislation is still being written, but a business coalition that has been lobbying for action said it would likely require an analysis on the economic costs of proposed trade sanctions and that any sanctions expire after two years. It also would require a presidential report on whether proposed sanctions would achieve results.

USA Engage and its 632 business and organization members argue that unilateral trade sanctions, such as a U.S. ban on nuclear power plant sales to China, rarely work and often backfire on American interests. "Most of these unilateral sanctions are a very definite form of isolation,'' said Frank Kittredge, president of the National Foreign Trade Council, which was instrumental in organizing USA Engage. "They isolate the United States and they isolate the country from all the things that we believe may change a country's behavior.''

The group argues that a ban on nuclear power sales to China has cost Westinghouse Electric Corp a multibillion contract that supported thousands of jobs and has done nothing to stop China's power program. The group also argues that the United States lost valuable information about China's nuclear power program because contracts went to competitors in France and Japan.

"In this globalized economy, the fact that the United States won't participate in a market, doesn't mean the activity isn't going to happen, it's going to happen because any product or service can be provided by any number of other countries,'' Kittredge said. Lane said Cuba is an example of trade sanctions failing to accomplish their stated purpose.

"If the goal of the sanctions is to keep the Cuban people poor, there is certainly the case that they have been successful,'' he said. "But if the goal is to get (Cuban leader Fidel) Castro out, they have been a colossal failure.''

The proposed legislation would have no impact on existing sanctions, including the so-called Helms-Burton law that targets foreign investment in Cuba and has enraged U.S. trading partners. At the state and local level, the group said it was working with lawmakers on alternative ways to express concerns about countries and is considering a court challenge on the constitutionality of sanctions imposed by state and local governments.

USA Engage is currently tracking some 189 unilateral economic measures imposed or proposed against 42 countries by U.S. federal, state and local governments since 1993.

"In the last two and a half years we have been working full time not in trying to convince other countries to lower their trade barriers, but to try to keep the U.S. government from enacting barriers on our exports and investments,'' said William Lane, a Caterpillar Inc. lobbyist who has been actively working with the USA Engage coalition. A Massachusetts law banning government purchases from companies doing business in Burma because of human rights abuses is being challenged in the World Trade Organization by the European Union. Massachusetts is considering a similar ban against Indonesia.

One estimate puts the loss of U.S. exports because of trade sanctions at $20 billion. But Lane said the estimate may be conservative and does not take into account less tangible costs, including making U.S. companies more unreliable as suppliers and handing over markets to foreign competitors.

"If the concern was just a few countries in the Mideast and Cuba, those are not compelling issues,'' Lane said. "But what we are now seeing is the targets are Mexico, they are Switzerland, they are Turkey, they are Indonesia, they are China and these are some of the most important markets today and they will be even more important in the future.''

15:10 08-21-97