16 April 1997
Financial Times

US business hits at use of unilateral sanctions

The US business community will today hit back at the growing use by the US government of unilateral sanctions, especially against oil producing countries with which Washington has diplomatic disputes.

USA Engage, a broad coalition of over 400 US companies and the American subsidiaries of several foreign groups, says that use of unilateral sanctions against countries such as Iran, Libya and Cuba and their threatened use against Nigeria, Burma and Indonesia are having a big financial impact on the US economy, and have led to thousands of job losses among American workers.

The group will today release a study by the Institute of International Economics concluding that in 1995, unilateral sanctions cost between $15bn and $20bn and between 200,000 and 250,000 export-related jobs. This follows another study released last month by National Association of Manufacturers, which found that the US had enacted 61 laws and executive actions over the past four years in an attempt to punish or change the behaviour of 35 countries. These had cost US companies up to $790m in potential exports.

The coalition, which includes consumer and financial service companies as well as oil and other natural resource groups, says it does not oppose the use of economic sanctions against wayward countries, as long as they are multilateral.

"We don't want to second guess the diplomats or set US foreign policy," said Mr. Dan O'Flaherty of the National Foreign Trade Council in Washington, "but we want sober consideration of the objectives and costs of the unilateral sanctions programme."

Although the coalition includes a number of industries, the US oil industry has grown particularly worried in recent years that the growing use of unilateral sanctions will lock US companies out of opportunities in a number of important oil and gas producing areas.

In addition to unilateral restrictions on US involvement in the Iranian and Libyan oil industries, there are currently separate campaigns under way in the US to extend similar measures to Nigeria, Burma and Indonesia, all substantial petroleum producers.

Mr. O'Flaherty said the coalition should not be viewed as an apologist for governments which overstep international norms. It would, for example, support multilateral measures against Iran, although its overall preference is for "broad engagement over the long term."

The US business lobby is carefully building momentum in a months-long campaign against unilateral sanctions. The initiative being launched today is backed by 428 companies mainly represented through powerful lobbying groups such as the Business Roundtable, Chamber of Commerce, National Association of Manufacturers and the American Farm Bureau.

The effort is to "educate" the Congress, which in the view of the business community has forgotten the lessons learned in the cold war about the futility of imposing sanctions without strong multilateral support.

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