Statement of The American Farm Bureau Federation
Charles Kruse President, Missouri Farm Bureau Member
AFBF Board of Directors


before the Subcommittee on Trade House Ways and Means Committee
Regarding the Use and Effect of Unilateral Trade Sanctions October 23, 1997


Mr. Chairman and members of the committee, I am Charles Kruse, President of the Missouri Farm Bureau and a member of the AFBF Board of Directors. I am here today representing the American Farm Bureau Federation as well as the Missouri Farm Bureau. The American Farm Bureau represents 4.7 million member families in the United States and Puerto Rico. Our members produce every type of farm commodity grown in the America and depend on sales to the export market for over one third of our production.

Farm Bureau has long-standing policy opposing artificial trade constraints such as sanctions. We believe that opening trading systems around the world and engagement are the most effective means of reaching international harmony and economic stability.

Former President Ronald Reagan said, "the freer the flow of world trade, the stronger the tides of human progress and peace among nations." These same sentiments were spoken by General Colin Powell last January at the Farm Bureau's Annual Meeting in Nashville, Tennessee.

In the last decade, democracy has ascended amidst economic liberation in Taiwan, Korea, Poland, Hungary, Slovenia, the Czech Republic, Chile, Argentina, Bolivia, Peru, Brazil, Uruguay and Ecuador. The opportunities for peaceful American engagement and influence in the world are greater than ever before.

Let me review some Farm Bureau policies that express the deep commitment of our members to opening and keeping open markets-- not closing doors as happens when sanctions or embargoes are enacted:

As you can see, our policies are dedicated to more open trading systems around the world-- not more sanctions or embargoes.

For 50 years, the United States has followed a reasonably consistent policy of engagement with the world to promote peace and freedom. Recently, the United States has begun to depart from the long-standing preference for engagement. In just four years, the united States has imposed 61 unilateral economic sanctions on 35 countries, according to US Alliance for Effective Engagement. These countries, from which the United States is isolating itself, contain about 40 percent of the world's population.

Professor Donald Losman of the US Industrial College of the Armed Forces has stated,"Comprehensive economic sanctions almost always fail to achieve their political goals, while at the same time opening a Pandora's box of economic and international relations headaches. They tend to strengthen offending regimes and policies. Pain without gain is probably the best description."

The Institute for International Economics estimates that unilateral economic sanctions cost the United States $15-19 billion in lost exports in 1995. This translates into the loss of more than 200,000 American jobs. A 1994 Council on Competitiveness report found that eight unilateral sanctions episodes cost the U.S. economy $6 billion in annual sales and 120,000 export related jobs. To continue to impose sanctions during a time when we are working to secure freer trade through the World Trade Organization and international agreements gives our trading partners very conflicting signals.

The Soviet grain embargo cost the United States about $2.8 billion in lost US farm exports and US government compensation to American farmers. When the United States cut off sales of wheat to protest the Soviet invasion of Afghanistan, other suppliers-- France, Canada, Australia and Argentina-- stepped in. They expanded their sales to the Soviet Union, ensuring that US Sanctions had virtually no economic impact. Russia still appears to restrict purchases of US wheat, fearing the United States may again use food exports as a foreign policy weapon.

I must stress that when any type of sanction or embargo is imposed, either political or trade, agriculture is the first to be hit in retaliation. We are dependent upon exports for over one-third of all sales. However, no country is totally dependent upon the US for its food. They go to our competition.

Sanctions and embargoes not only cost us in immediate loss of sales, but also destroy customer confidence in the United States as a secure and reliable supplier. Our customers find other suppliers and are very hard to win back.

America's prosperity is tied to our competitiveness in global markets. Agricultural trade accounts for over 30 percent of US production. Over 12 million working Americans and their families depend upon US exports and access to global markets for their jobs. Sanctions and embargoes are sanctions against our own people and only serve to disrupt the marketplace on which we depend.

The United States still has an unprecedented opportunity to promote its values throughout the world by peaceful engagement. Reaching out through engagement, not withdrawing behind sanctions or embargoes, is the best way to achieve change,

Thank you for the opportunity to speak on behalf of American agriculture.

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