25 May 1997
The Washington Times
Commentary by Archie W. Dunham
Alternatives to Unilateral Trade Sanctions There has been a great deal of discussion about the position of the United States in the international trade world of the 21st century. I believe one essential requirement of our nation's international trade policy in the next century is that America's energy companies remain strong.
Throughout the 21st century, American energy companies have provided leadership in exploration, developing new technology and dealing with national oil companies possessing huge oil and gas reserves. In many cases, we have had the strong support of our president, congressional leaders and the State Department.
However, there is a real danger that the strong position of America's energy industries - and other U.S. international businesses - could be jeopardized by U.S. foreign policy through the increasing use of unilateral trade sanctions. Self-imposed withdrawal from the global energy picture is not a wise course for a nation that imports more than half of its crude oil needs.
Consequently, I believe the time has come for a more open discussion about the effectiveness and shortcomings of unilateral trade sanctions. My advice to Washington, simply stated and offered with respect, is a follows:
First, we should begin a systematic search for alternatives to economic sanctions as they are currently applied. Sometimes it seems as though sanctions have become virtually the only tool in our foreign policy kit. When I see a list of potential target countries, I am reminded of the old saying: "When your only tool is a hammer, every problem starts to look like a nail." In thinking about the effectiveness of sanctions in general, I am inclined to wonder if we are hitting our thumbs more often - and harder - than the nail.
I do not question the goals of economic sanctions. Sanctions are often used in the fight against some of the most challenging problems in the world today - human rights abuse, weapons proliferation, drug trafficking and terrorism. And I recognize there are times when the United States must stand alone for what we believe to be right. In those cases, U.S. companies will always stand with our government. If sanctions are deemed unavoidable, we should try everything in our power to make them multilateral, rather than unilateral. It is joint pressure from many countries that is most likely to bring meaningful results.
But unilateral sanctions should only be used as the foreign policy tool of last resort. This is not the case today. The United States has imposed sanctions against 10 nations. Stiffer sanctions are possible against some of these, and new sanctions may be imposed on six additional countries. Together, these countries represent a substantial chunk of the global market. This increasing use endangers the ability of American energy companies (and many other U.S. companies) to compete in international trade.
In many instances, unilateral sanctions do not have a major impact on the economies of the nations we target. Rather, sanctions actually end up hurting American businesses, workers and consumers. In a sense, unilateral trade sanction sometimes can equate to unilateral commercial disarmament.
From my own experience, I have seen the futility of unilateral trade sanctions. Two years ago, Conoco finalized plans to develop two offshore oil and gas fields in Iran. Today, the French company, Total, is developing those fields because Conoco was precluded from doing so by our government's imposition of unilateral sanctions against Iran.
I recognize there are times when unilateral sanctions are the best choice after other options prove lacking. But the options are often ignored, and their exercise can provide remarkable results.
Among these results are the business relationships that now exist between American companies and nations, such as Vietnam and Russia, that once were our military and political enemies. In 1994, Conoco became the first U.S. energy company to develop a new oil field in the former Soviet Union with a Russian partner company. This resulted in development of a major oil field above the Arctic Circle. I believe virtually every American company now doing business in Russia would agree our government has championed our interests there. Together, our goal has been to help preserve the new democracy by transforming the controlled economy of the past into a free market economy of the future. This is an example of how American economic strength can be effectively used as part of our nation's foreign policy.
Unilateral sanctions not only result in American companies losing out to companies from other nations. They also can cause US firms to be viewed as risky suppliers and business partners by other nations that otherwise would be eager customers of our exports of goods and services.
Second, in those cases when our government believes trade sanctions are the only viable policy, more should be done to win support from other nations. A good example of international cooperation on trade sanctions is the high degree of unity between the United States, and European Union and other nations to impose trade restrictions and embargoes on the regime of Saddam Hussein in Iraq. Instead of viewing American economic strength as a stick in international policy, our government should view it as the carrot.
American industry can spread investment through out the world, help develop new markets, aid the economies of emerging nations and create economic opportunity.
It is to be hoped these actions will further the ideals of our nation and the goals of our foreign policy. History has shown political obstacles crumble under the weight of economic forces. For our part, Conoco has encouraged the respected Center for Strategic and International Studies(CSIS) to undertake a comprehensive review on the effectiveness of unilateral sanctions and possible alternatives to sanctions. The CSIS has expertise in the areas of international markets and U.S. foreign policy, and it is my hope the center will provide alternatives to trade sanctions in the months ahead.
Finally, it also is time for those American corporations that do business worldwide to take a more active role on the world's stage. It does little good for international companies to simply complain about unilateral sanctions. We must find ways to shed a stronger light on the positive ways American business and industry can help promote our nation's ideals around the world. Toward that goal, I urge other chief executive officers to join me in looking for ways to help our government examine its foreign policy goals without putting American industry at a disadvantage in the world trade competition of the 21st century
Archie W. Dunham is president and chief executive officer of Conoco. Conoco does business in 30 countries from the Norwegian Sea to Kuwait and Venezuela.
.
Return to Top
Home | About Us | Resources | Press Releases | Federal Activity & Legislation
State & Local Activity | NFTC Lawsuit | Contact Us | Site Index