24 October 1997
Journal of Commerce
Richard Lawrence

House bill seeks to limit use of unilateral trade sanctions

Legislation tries to ensure sanctions work and cause as little damage as possible to U.S. companies

WASHINGTON - Legislation making it more difficult for the federal government to impose unilateral sanctions was introduced Thursday with largely favorable response from the Clinton administration.

The bill sets out new procedures aimed at making sure U.S. sanctions against other countries work, and that they have the least possible cost to the U.S. economy.

Meanwhile, Undersecretary of State Stuart Eizenstat disclosed that the United States is not only investigating a proposed Iranian gas field project, involving France, Russia and Malaysia, but also an Iranian oil field project involving Canadian and Indonesian investors.

He held out the prospect of economic sanctions against all the participants, if they are violating the Iran-Libya Sanctions Act. U.S. officials, he said, are gathering "with alacrity" the facts involving both projects to decide whether to apply the sanctions. He declined, however, to say when the decision might be made.

Separately, the House Ways and Meqans trade subcommittee approved legislation to help expand U.S. trade and investment ties with Sub-Saharan Africa.

The bill would create a high-level U.S. economic cooperation forum with the region, authorize a U.S.-Sub-Saharan free trade area, and expand special duty-free benefits for sub-Saharan African textile and other exporters. It further directs the U.S. Export-Import Bank and the Overseas Private Investment Corp. to expand their sub-Saharan Africa activities.

Reflecting the business community's mounting frustration with U.S. economic sanctions, two key House members -- Rep. Lee Hamilton, Ind., the House International Relations Committee's ranking Democrat, and Rep. Philip Crane, R-Ill., the Ways and Means trade subcommittee chairman, introduced what they called a sanction reform bill.

Existing U.S. unilateral sanctions, economists estimate, cost U.S. exporters close to $20 billion a year in lost business. According to an Institute for International Economics study, they achieve their foreign policy goals in only 13% of the cases.

Still, the number of sanctions keeps rising, totaling more than 60 imposed since 1993. Close to 20 other sanctions measures are pending in Congress. Though the bill introduced Thursday would not affect existing sanctions, it sets forth procedures for the president and Congress to follow before imposing future sanctions.

For example, independent cost-benefit studies would be conducted in advance of a sanctions decision. And, once approved, a sanction would be subject to a two-year "sunset" provision.

The bill, said Rep. Hamilton, is not "a red light for sanctions but rather a yellow, caution light." Mr. Eizenstat, testifying before the Ways and Means subcommittee, endorsed many of the bill's principles. It seems to have some "very positive" elements, though the administration still must review it, he told reporters.

Too often, he acknowledged, sanctions are applied without analyzing their likely impact. The administration, Congress, state and local communities, businesses and nongovernmental organizations must work together, he said, "to see that our use of sanctions is appropriate, coherent and designed to attract international support."

Home |  About Us |  Resources |  Press Releases |  Federal Activity & Legislation
State & Local Activity |  NFTC Lawsuit |  Contact Us |  Site Index

.