16 April 1997
Rueters
By Peter Bate

U.S. Companies Rally Against Unilateral Sanctions

WASHINGTON, April 16 (Reuter) - A powerful coalition backed by some of the biggest names in corporate America launched a campaign Wednesday against the proliferation of punitive trade measures imposed by the United States.

USA Engage, representing 440 small and large businesses, trade and farm groups, warned that Washington's penchant for punishing foreign countries was hurting the U.S. economy.

Buttressed by economic studies and foreign policy experts, corporate leaders argued that the United States would profit from pursuing engagement rather than isolation.

"We believe that unilateral sanctions not only undermine American leadership and competitivness, but are often counterproductive," the coalition's chairman, Donald Fites, chief executive officer of Caterpillar Inc., said at a news conference.

Fites, who also heads The Business Roundtable, a group of CEOs of the top U.S. corporations, said Caterpillar was still dealing with the consequences of a 1980s embargo on the Soviet Union that turned the market over to a Japanese competitor.

A study released in March by the National Association of Manufacturers showed the United States enacted 61 laws and executive orders between 1993 and 1996 authorizing unilateral economic sanctions against 35 countries.

The study concluded that only a handful of those measures could arguably be seen as having any influence in the targeted countries, home to some 2.3 billion people.

"I have first hand knowledge of the problems this situation is raising for American exporters," said James Perrella, president of Ingersoll-Rand Co and chairman of the National Foreign Trade Council.

"Foreign customers are beginning to doubt the reliability of U.S. companies as suppliers. This jeopardizes America's economic future," he said.

U.S. punitive measures have ranged from restrictions on financing for exports to behemoths like China to prohibiting trade with tiny nations like Cuba, target of last year's Helms-Burton law.

That law spawned further diplomatic trouble by irking U.S. allies because it punishes foreign firms doing business in properties confiscated from Americans by Cuba's government.

Another study released by USA Engage showed that U.S. sanctions on 26 countries in 1995 reduced American exports by as much as $20 billion.

Conducted by Washington's Institute for International Economics (IIE), it estimated that up to 250,000 U.S. jobs were lost in 1995 due to the sanctions.

Legislators present at the conference like Sen. Richard Lugar (R-Ind.) and Rep. Lee Hamilton (D-Ind.) praised the businessmen for taking an active role in the policy debate.

While most lawmakers argued sanctions were a legitimate diplomatic tool, they stressed that extreme measures should only be taken as a last resort and after a careful calculation of their cost and chances of success.

"America's ability to lead in the new century will depend upon our economic strength," said Lugar, chairman of the Senate Agriculture Committee.

"If we squander that strength by deliberately penalizing U.S. firms with no realistic prospect of getting much in return, both our diplomatic vitality and our effective diplomatic leadership will be in question," he added.

USA Engage members include AT&T, Boeing, Citibank, Dow Chemical, Exxon, General Electric, IBM, Motorola, PepsiCo, Procter & Gamble, Texaco and Westinghouse.

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