04 October 1997
New Orleans Times-Picayune
Editorial

Blunderbuss diplomacy

The United States is about to have a serious run-in with its allies because of its propensity for hurling at adversaries economic thunderbolts that miss the target and return as boomerangs.

These thunderbolts are unilateral economic sanctions designed to hurt real adversaries such as Iran and Libya but instead only freeze major U.S. companies out of the competitive international marketplace while correspondingly enriching other nations' companies.

Coming into play again is last years Iran-Libya sanctions act which authorizes President Clinton to impose sanctions on any company anywhere that invests more than $20 million in Iran or $40 million in Libya. The motive is pure: Both countries sponsor terrorism and should be made to suffer for it. The problem is that they are not, but we are, and enforcing the act will only start a needless fight with our allies.

France's big oil company, Total Oil Group, with Russia's Gazprom and Malaysia's Petronas, has announced a $2 billion contract to develop Iran's South Pars natural gas field. The field is expected to produce 20 billion cubic meters of gas a year, about half of France's consumption.

The matter has already brought a testy exchange. The State Department said it will conduct an investigation before deciding if sanctions are warranted, and Secretary of State Madeleine Albright declare despairingly that our allies "just don't get it."

French Foreign Minister Lionel Jospin scoffed, "Nobody accepts that the United States can pass a law on a global scale. American laws apply in the United States. They do not apply in France." The European Union has readied retaliatory measures.

Total has already taken over a deal the law prevented America's Conoco from making. Coca-Cola, having become in 1994 the only U.S. soft drink maker to open a plant in Iran, had to pull out when President Clinton tightened the sanctions. Boeings Co. lost a $1 billion deal to sell Iran 16 757-400s when Washington blocked it.

The winners in such situations are the companies from Europe, Japan, South Korea, China and Russia that think one can work to change adversaries' behavior without damaging one's own economy. E.U. Trade Commissioner Leon Brittan, for example, called the U.S. law "counterproductive," saying it created "tension between Europe and the United States, which makes it more difficult to work together to achieve shared political objectives in Iran. It plays into hands of hard-liners in Teheran."

Europe has no illusions about Iran's truculence. Most European ambassadors were pulled out of Tehran in April after a German court declared that certain political killings in Berlin were ordered by top Iranian leaders.

The United States has imposed unilateral economic boycotts against 38 countries, and sanctions are pending against nine more. Few are much affected by them. This seems a good time to rethink the concept, and an instrument for that has been introduced in Congress. A bill by Sen. Richard Lugar, R-Ind., and Rep. Lee Hamilton, D-Ind., would allow a unilateral sanction only when a finding indicates it is likely to have the desired effect and that the benefit exceeds the costs to innocent parties, with annual reviews and expiration after two years if not extended by vote.

Such sanctions can work in a limited number of situations, and the law should provide for them. But as it is now, we're sanding alone firing a blunderbuss that hits everything - including ourselves - but the targets.

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