• Cost to U.S. exports

• Reputation as an unreliable supplier

Current sanctions prohibit the sale of U.S. commercial aircraft, and U.S. commercial aircraft engines to Iran, Iraq, Libya and Syria. Based on known and projected requirements in those markets for the next five years, the forecast for large aircraft engine sales of several models in different power ranges is about $435M. Calculations based on production of engines for that market indicate an opportunity cost of 331 jobs for each of the next five years. Additionally, the supplier base for the engine production in that period would provide 496 jobs for each of the five years.

(Source: United Technologies Corp., Pratt and Whitney Division)

2. Fighter Aircraft Sale Lost to the U.K.: Saudi Arabia.

• Cost to U.S. exports

• Market substitution

• Reputation as an unreliable supplier

In 1985, Saudi Arabia requested 40 additional F-15 fighter aircraft from the U.S.. These were in addition to the 62 that had been delivered on a previous purchase. Because of congressional opposition to the sale, in February 1986 Saudi Arabia turned to the U.K. and initially bought 72 Tornado fighter aircraft. By July 1988, the Saudi's had negotiated for an additional 48 Tornados. Up to this time, the U.S. had been the supplier of choice. It became evident however, that to assure a reliable flow of equipment for its defense requirements, Saudi Arabia would diversify its sources. It must be noted here that certain models of the Tornado are designed for low level (terrain following) strike missions in day-night, all weather operations. The Tornado capabilities in such missions exceed that of the F-15 model then under consideration for sale to Saudi Arabia. The consequence of denying Saudi Arabia the F-15's included their acquiring a greater long range strike capability than had the U.S. proceeded with the sale. Included in the U.K. defense package were some 50-60 Hawker trainer aircraft, helicopters, up to six mine hunters, training and service contracts, infrastructure, and construction of two new air buses. Total value of this sale is estimated over $29B.

(Source: "The Domestic Economic Impact of an F-5 Replacement Decision By Saudi Arabia, " by Dr. William D. Bajust and David J. Louscher, Science Applications International Corporation, no date)

3. Fighter Aircraft Engine Market: Latin America; Pakistan; Taiwan.

• Cost to U.S. exports

• Market substitution

U.S. policy has been to deny modern day fighter aircraft sales to Latin America, excluding the 24 F-16's sold to Venezuela in the mid-1980's. At that time, the market was estimated at 260 aircraft. Soon however, Latin American countries will start a decision process extending over the next several years to modernize their air forces. Aircraft selections will fill requirements for the next 20+ years. Both Brazil and Chile have already released Requests for Information to potential suppliers for 88 to 169 fighter aircraft, a sales value of $2.5 to $5B.

While U.S. foreign policy has closed the market to U.S. contractors, the French have supplied about 60% of the high performance fighter force structure for the region. Also, in late 1996, Belarus sold a squadron of 12 MiG-29 fighters and 14 SU-25 attack aircraft to Peru at an undisclosed price. Had they been U.S F-16's, at the lowest flyaway cost of $25M each, the sale of these aircraft would have been worth $650M - $800M. With additional revenue from follow-on support over the next 25 years valued at twice the cost of the aircraft, the total value of this sale to the U.S. would have been $1.95B to $2.4B. At this writing, a decision to change the current policy and allow U.S. fighter sales to Latin America is pending in the White House.

In 1988 and 1989, Pakistan ordered 71 F-16's with Pratt and Whitney engines. Twenty eight aircraft of this contract were produced, but because of the Pressler Amendment, they were not delivered. There was a loss not only of the full order, but potential future sales as well. The value of engines for the full 71 aircraft order was about $279M, and 59 jobs per year for the next five years.

From the early 1980's, Taiwan had expressed a strong desire to purchase F-16 fighter aircraft from the U.S. to replace its obsolescent fighters and meet its continuing defense requirements. However, the U.S. consistently denied these requests, which then moved Taiwan to develop its Indigenous Defense Fighter (IDF). Of a total IDF program to produce 130 aircraft, by 1997 some 60 had been built. However, Taiwan still had a requirement to fill which was partially met when the Bush Administration agreed to sell 150 F-16's. For the remaining shortfall, Taiwan turned to the French and ordered 60 Mirage 2000 fighters. The loss in U.S. fighter engine sales for what could have been F-16 sales, was 140 engines for the IDF and another 70 for the French Mirage buy.

The estimated loss in fighter engine sales in the Pakistan and Taiwan examples is a value of about $1.03B and a cost in jobs of 142 per year for each of the next five years.

(Source: United Technologies Corp., Pratt and Whitney Division; Aerospace Industries Association)

4. Helicopter Market: China.

• Cost to US exports

• Market substitution

• Reputation as an unreliable supplier

In 1984, China bought 24 Sikorsky S-70C commercial variant BLACK HAWK helicopters. However, the configuration for China included the T700-GE-701A engine and certain avionics that are on the State Department Ô s Munitions List, thereby controlled by the State Department . The commercial airframe is under jurisdiction of the Commerce Department, and decontrolled. In 1989, negotiations were underway for 20 additional S-70C' s with a contract expected in late 1989. Longer term sales were 250-300 aircraft for a total value of $3.1 to $3.7B.

Following the Tiananmen Square incident, sanctions on China prohibited export licenses for items on the Munitions List. This action has prevented support for the T700-GE-701A engines and those Munitions List avionics items. Sanctions remain in effect. Yet there are no unique military of technical reasons to deny support for the T700 and the avionics affected by the sanctions. Furthermore, there is available now a commercial model of the T700 that is equal in performance, the GE CT7-2D, and commercial avionics equal in capabilities to those under sanction. When configured with the commercial CT7-2D engine and commercial avionics, the S-70C is a decontrolled aircraft, hence exportable and not subject to the Tiananmen sanctions.

The effect on Sikorsky aircraft has been to deny it the sale of 20 additional S-70C's and a potential sale of up to 300 aircraft valued at $3.7B. For China and the broader international market, the effect is also to identify Sikorsky as an unreliable supplier. To meet its requirement for helicopters in the S-70C class, China has purchased 80 Russian MIL-17 helicopters. As S-70C sales, the value to Sikorsky would have been $1B. China has also purchased six Cougar helicopters from France, produces the French Dauphine under license, and now participates in the EC 120 European helicopter consortium. Loss of the market thus far in China translates directly not only to lost revenues, but also to lost opportunities for jobs at Sikorsky and its suppliers. Loss of this market also converts to higher unit cost of production for Sikorsky because of defense procurement reductions; higher unit cost and a reputation as an unreliable supplier places Sikorsky at a considerable disadvantage in international competition.

(Source: United Technologies Corp., Sikorsky Aircraft Division)

5. Commercial Aircraft: Iran, Iraq; Lebanon; Libya; and Syria.

• Cost to U.S. exports

• Market substitution

• Reputation as an unreliable supplier

• Loss of market

U.S. sanctions prohibiting the sale of large civil aircraft to Iran, Iraq, Libya and Syria have not stopped these countries from acquiring civil aircraft from European sources. Syria is a case in point. In the last year, Syrian Arab Airlines has acquired at least two British Avroliner RJ airplanes with U.S. manufactured engines, as well as six Airbus A320 aircraft. This represents an immediate loss of $250 millions of U.S. civil aircraft exports and ties the airline to European equipment and systems which will be very difficult to reverse if the sanctions are lifted. Continuation of the United States travel ban on Lebanon is closing out that market to U.S. civil aircraft manufacturers, with the airline acquiring the same Airbus A320/A321 air craft as its neighbor.

A clear cut and documented case of the long term effect of sanctions, after they are lifted, is the case of Vietnam Airlines. Prior to the U.S. lifting its trade embargo, Vietnam Airlines was able, under certain conditions, to lease aircraft. It was understood that the models leased would become the mainstay of the Vietnam Airlines fleet once the embargo was lifted. The reason is that once an airline has invested in its people, training, ground support equipment and route determination to support a type of aircraft, it stays with that type of aircraft for future procurements.

In 1993, anticipating removal of the U.S. trade embargo, Vietnam Airlines was prepared to acquire six Boeing 737 model aircraft. Instead the embargo was extended and the airline was required to lease Airbus A320 narrow body aircraft. When those leases recently expired, the airline naturally leases eight more A320s. Vietnam Airlines plans to lease two additional A320s this year. By the year 2000, the Airline plans to acquire a total of thirty narrow body aircraft. This narrow body market has a value of about $1.6 billion. In summary, U.S. sanctions forced Vietnam Airlines into Airbus equipment. Initial loss to U.S . manufacturers was about $211 million. A loss which could grow to $1.6 billion by the year 2000, even though the embargo has been lifted.

( Source: Boeing Commercial Airplane Group )

6. China Missile Sanctions

• Market Substitution

• Lost U.S. Exports

In August 1993, the State Department declared that China had violated the Missile Technology Control Regime, thereby activating sanctions under U.S. law (the "Helms Amendment"). U.S. companies were thus banned from selling satellite and rocket components for two years to China and Pakistan. This action affected seven planned launches of satellites in China. The estimated loss of U.S. exports was $1.5 billion and 28,650 jobs. The business was taken over by European suppliers.

(Source: The Council on Competitiveness, "The Dollars and Sense of U.S. Foreign Policy," February, 1994.)

Iran had a flourishing agricultural sector and a demand for refrigeration equipment to transport produce. With the overall degradation of its economy and disrepair because of war and internal instability, there has been a corresponding decline in demand for transport refrigeration. The same applies to Iraq. For Iran, under sanctions applied to its present economic conditions, the estimated loss of sales for truck and trailer refrigeration is about $240,000 annually.

Libya is also a market for truck and trailer refrigeration equipment. Here the estimated sales opportunities are $320,000 annually. However, in the past year, inquiries have surfaced for a potential order of 200 transportation refrigeration units worth from $1.2M to $1.6M.

(Source: United Technologies Corp., Carrier Transicold Division)

In 1991, the United States imposed sanctions on Haiti following the overthrow of its democratically-elected government. The sanctions included prohibitions on payments and financial transfers from U.S. persons to the Haitian government.

Sylvania Lighting at that time employed over 400 Haitians assembling automotive circuit breakers. The impact of sanctions was to immediately, and without warning, prohibit payments of any type to the Haitian government. This included port and harbor fees, thus preventing Sylvania from making payments necessary to import or export products.

As a result, Sylvania directly idled about 400 Haitian employees, 200 Puerto Rican employees, and 50 U.S. employees while alternate production was arranged. Of greater note, the interruption of the flow of these automotive components produced a significant loss of productivity in several U.S. automotive assembly plants. This example is significant, not for its direct dollar impact on the U.S., but rather to illustrate that broad financial sanctions can have sweeping and unintended effects.

(Source: GTE)

In November 1996, the Daewoo Corporation, a joint venture partner of the Carrier Corporation in Korea, received a request to supply three commercial air conditioning units for a hospital in Benghazi, Libya. Total U.S. dollar value was $1.1M with equipment to be manufactured in the U.S. In January 1997, a request for humanitarian exception to the current sanctions was denied by the Office of Foreign Assets Control in the Treasury Department. Information is that the sale will now go to Carrier competitors in Switzerland or Japan.

(Source: United Technologies Corp., Carrier Division.)

2. Air Conditioning, Residential and Commercial Market: Cuba.

• Loss of market

• Market substitution

Cuba sanctions extend to foreign subsidiaries of U.S. companies, thereby closing the market to U.S. firms. The effect is to abdicate the Cuba market for commercial air conditioning equipment to foreign competitors. That market is valued today at over $10M. However, if U.S. sanctions on Cuba were removed, economic development would create a greater demand for commercial chillers, and also establish a market for residential air conditioning equipment.

(Source: United Technologies Corp., Carrier Division)

3. Elevator Market: Cuba.

• Loss of market

• Market substitution

Although the elevator market in Cuba is presently not very large, there are European and Canadian companies in that market, primarily in projects with new or modernized hotels catering to the tourism trade. These suppliers come with a general contractor who offers a financing package, including elevators. The absence of Otis Elevator Company in that market means a large portfolio of Otis units previously installed but poorly maintained for 30 years, is denied a huge modernization business potential. Especially important is that competitors are positioning themselves in Cuba for the inevitable change of economic fortune in that country. By contrast, before the fall of communism in East Europe, Otis did business in Poland, Czechoslovakia and Hungary. Large new equipment projects were sold, installed and maintained. But in Cuba, we have abdicated the market to foreign competitors Schindler of Switzerland, Hitachi of Japan and others who are in a position to supply not only new equipment and spare parts, but also in a position to convert existing Otis products to their own configurations. This service base will subsidize future equipment sales to help dominate the elevator market.

(Source: United Technologies Corp., Otis Elevator Division)

4. Elevator Projects: Iran.

• Market substitution

• Reputation as an unreliable supplier

As a measure of how sanctions have affected Otis, inquiries to its European Operations from government and private projects in Iran fell from 153 in 1995 to 75 in 1996. The business has shifted to Otis' competitors because of their reliability in providing new equipment, and servicing new and previously installed equipment. When U.S. sanctions are eventually lifted in Iran, Otis will have been displaced in that market by other foreign suppliers.

(Source: United Technologies Corp., Otis Elevator Division)

In November 1994, it was agreed to sell medical X-ray film and processing chemicals to the Iranian Red Crescent for diagnostic imaging. The product was to be exported from the U.S. to Europe and stored in Belgium for subsequent shipment to Iran. Because of internal financial problems in Iran, the required letter of credit for the shipment was delayed until after U.S. sanctions were imposed on Iran. The products were of U.S. origin and not made elsewhere in the world. Total value of the lost sale was about $1.5 million.

(Source: E.I. du Pont de Nemours & Co.)

2. Perflourinated Membranes Denied Export: End user Iraq; Vietnam.

• Cost to U.S. exports

• Market substitution

Perflourinated membranes are used for water treatment purification/desalination. In 1992, an export license was denied to an Austrian company in that Iraq is the end user of the equipment in which the water treatment membranes were to be used. The export was denied although the justification for the export was on humanitarian grounds.

A similar case involved Vietnam. There, du Pont was advised that its export application for these membranes would be denied, only to have the sanctions on Vietnam removed within days after the product was deleted from the contract. The business was lost to the Asaki Glass company of Japan. Not only was this particular project lost, but also the opportunity to explore the entire new membrane market in Vietnam.

(Source: E.I du Pont de Nemours & Co.)

Prior to 1978, Caterpillar Inc. had about 85% of the market for heavy construction equipment in the USSR. However, in 1978 exports to the USSR, including equipment produced by Caterpillar, were restricted to protest human rights violations. Although Caterpillar could still sell parts and machines to the Soviet union, export licenses were required. This condition introduced delay and uncertainty with Caterpillar as a supplier. The business then shifted to Komatsu of Japan, where on time deliveries were more assured. Between 1978 and 1981, Caterpillar's market share in the USSR dropped from 85% to 15%.

In 1981, the situation for Caterpillar business with the Soviet Union became worse. Plans were announced to build a natural gas pipeline to Western Europe and represented a huge sales opportunity for Caterpillar equipment. In an effort to block the pipeline construction, the US government controlled the export of pipeline laying equipment. West European Allies were not willing to comply with the U.S. embargo; some needed the supply of gas. In the end, Caterpillar was denied permission to export 200 machines for the project, Komatsu got the business, and the pipeline was completed ahead of schedule. The cost to Caterpillar was about $400M in exports for 1981 and 1982, and 12,000 man years of employment for its workers and suppliers.

(Source: Speech by Donald V. Fites, Caterpillar Inc., Purdue University, March 4, 1988)

When U.S. firms are denied access to projects that challenge technology, they not only lose business, but they fall behind in developing and refining technology that has application not only in the project of immediate application but elsewhere. Foreign companies not bound by like restrictions benefit and become more competitive. Faced with a history of such constraints under unilateral sanctions, companies are disposed to move R&D where U.S. constraints in future opportunities will not apply.

A provision in the Internal Revenue Code denies tax credits for foreign sourced income from countries that support terrorism or that do not have diplomatic relations with the U.S. This places U.S. companies at a price disadvantage when bidding on projects in such countries. In Angola for example, CONOCO had been instrumental in opening huge tracts for international bidding on deep water contracts. Because of the tax code, CONOCO was unable to bid competitively in a project that led to a 1 billion barrel discovery on a project that CONOCO itself had mapped and in effect had identified for the government and industry.

In Libya, geologic formations are carbonate rocks, a condition that is oil producing in only a few other basins of the world. For CONOCO, its units have access to such formations in Dubai, Russia, and Canada. Continuity and expertise from the Libyan sources would have served the company well in the Lodgepole and Val Verde basins of the U.S. and the three foreign locations. The fewer opportunities to develop and apply the expertise means less of it , more mistakes, higher costs where the expertise must be applied. The absence of the U.S. in Libya has been to the benefit of Canadian competitors.

In Iran, most of the geologic condition is of an "overthrust " type. The CONOCO role in the Sirri oil fields development would have given the company a considerable competitive advantage in two areas: understanding the wide - area geology for benefit of other investments in the region, and developing the expertise for the deep and complicated drilling required. That drilling expertise would open the possibility of its application in other areas outside Iran with similar geological and engineering environments, such as parts of the U.S. and Columbia.

In Vietnam, the sanctions prevented U.S. companies from bidding for acreage while non-U.S. companies went forward. This created a serious lag in U.S. deep water drilling expertise while Shell Oil was building its deep water position in the U.S. Gulf of Mexico. Had U.S. companies gone earlier into the Vietnamese deep water fields, and into Angola, the expertise derived from these investments would have competed for some of the U.S. domestic acreage awarded to the Dutch and British and from which they are reaping benefits today.

The general lesson here is that whenever U.S. companies are prevented from investing where international competitors are free to go, those foreign competitors gain experience that serves them well, including in the U.S.

(Source: E.I du Pont de Nemours & Co., CONOCO Division)

2. Soviet Gas Pipeline Sanctions and The U.S. Turbine Industry

• Cost to U.S. exports

• Market substitution

• Reduction of technology advantage

• Design out U.S. components

• Create competitors

In June 1982, in an abortive attempt to thwart the Soviet gas pipeline serving Europe, existing U.S. controls on trade with the Soviet Union were broadened to include a unilateral prohibition on the re-export of all U.S. origin goods and technology by foreign firms. A U.S. turbine manufacturer, GE Power Systems (GEPS), had technology licensing agreements with the leading turbine manufacturers in Europe. Licenses included three major turbine suppliers. The arrangement was that, for a fee, the licensees were able to use GEPS technology to build the low tech components, or about 50% of the turbine, and assemble the U.S. designed turbines. The Europeans were required to purchase the "high-tech" components from GEPS, including the control unit of the turbines. Because of its technology leadership, GEPS was then the global leader with one-fifth of the world market share.

At the time of the embargo, GEPS had ready for export the components for 128 turbines which had been ordered by the licensees for the Soviet pipeline. The value of this inventory, now blocked by the embargo, was between 1/2 and 3/4 of a billion dollars at today's prices or 815 man years of effort.

The Soviets immediately ordered backup components from the U.S. manufacturer's licensee in France. Since GEPS could not deliver on its obligation, the French licensee was able to gain the remaining U.S. technology for the high - tech components. Similarly, the Italian licensee was able to gain licenses for two additional types of turbines, including the high tech components, for gas transmission applications. While these actions were establishing formidable competitors in both market share and technology for a business historically dominated by GEPS, similar damage was being done to other U.S. global leaders in equipment manufacture.

Fortunately for the United States, the excessive territorial aspects of this unilateral economic sanction created enough Allied government pressure on the U.S. to force its withdrawal after only five months. But even though there was no realistic promise of impact on the Soviet project, the U.S. turbine manufacturer had been forced to hand over to its competitors a technological advantage which it had earned over years of R&D investment and hard work in the international market place, and its reputation as a reliable supplier in Europe was destroyed. Moreover, the European market traditionally was closed to U.S. manufactured turbines, and the market access enjoyed by the U.S. supplier because of its technology leverage was permanently damaged. Its market share fell immediately from 18% to 6%. GEPS has been able to regain its global market leadership through productivity, quality, and cost improvements. Nevertheless, the embargo created new full fledged global competitors for U.S. suppliers which reduced income for U.S. investors and led to the loss of thousands of jobs.

( Source: The General Electric Company)

3. Recent Sanctions Implementation Effects.

• Loss of market

• Design out U.S. component

In 1995, a European turbine manufacturer held a $70M order for turbines in Iran when that country was unilaterally embargoed by the United States. The European firm's contract depended on its being able to obtain directly from the U.S. vendor the specially designed control unit. The component would comprise about 3% of a turbine's value and, if taken from foreign inventory, is eligible for reexport to the target country. The Treasury Department advised at the time of the embargo announcement that such exports from the United States would be prohibited by the Executive Order. However, several months later in 1995, Treasury advised exporters that it was uncertain of the legal basis for the earlier interpretation and had submitted the matter for interagency determination.

The other bidder on the original turbine tender, a U.K. firm, offered to accept the order with all U.K. origin components if the U.S. supplier were not permitted to sell the control component. The foreign manufacturer proceeded with designing its own control unit for the turbine to meet such future orders.

As of April 1997, no decision had been reached and the de facto interpretation remains negative. Meanwhile, this action (or inaction) jeopardizes the future of the controls business which has been dominated by the United States.

Third-country customers of U.S. firms again are being reminded that it does not pay to become dependent on U.S. suppliers, even at a de minimis level, and foreign competitors in key equipment industries are being strengthened.

4. Oil Field Machinery Market: Iran

• Cost to U.S. exports

• Loss of market

• Market substitution

The Iranian Sanctions of May 1995 denied about $3M per year in business to a U.S. company that it had enjoyed in the past. This represents about 3% of its annual sales. Indication are that the business was diverted to European competitors, with no impact on Iran's operations other than to decrease available sources for the equipment by one, and to further strengthen the worldwide market position of the competition.

A U.S. company was denied about $500K annually in whole goods and parts by the Iran sanctions. Because of the expense of changing systems, the customer sought to purchase the goods indirectly through foreign subsidiaries. Given the careful monitoring of orders and the prohibition on "facilitating or approving " such business, these orders were also rejected. Numerous European and Japanese companies have the capability to build similar machines, and it is believed that the former customer now purchases the machines elsewhere.

In yet another case, a U.S. machinery manufacturer was actively bidding, and had reason to believe that its products were favored, for an Iranian order of approximately $4M when the sanctions were imposed. The German competitor immediately contacted the Iranian customer and advised it that the U.S. firm would not be able to ship, so the customer should award the contract to the German competitor. The U.S. firm prepared and filed an application for an OFAC export license, but received no response from OFAC. After roughly 30 days, the Iranian customer awarded the contract to the German company. OFAC never responded to the request for a license. These goods will provide a continuous stream of parts and service revenues during their approximately 30 year estimated life span. Even if the sanctions are lifted tomorrow, the Germans have the business for the next thirty years.

Finally, a U.S. machinery company lost sales of about $1M annually, or about 3% of its sales of one particular product. It appears the business was diverted to two European competitors, with no impact on Iranian operations using the product.

Laws that establish conditions for U.S. nuclear cooperation with China are: (1) Joint resolution approving the Agreement for Nuclear Cooperation between China and the U.S., enacted in 1985; (2) Tiananmen Square sanctions in PL101-246, These legislative actions complement requirements of the Atomic Energy Act of 1954, and the Nuclear Non-Proliferation Acts of 1978 and 1994. The Tiananmen sanctions added human rights conditions and a higher threshold to existing laws by requiring clear and convincing evidence of compliance with conditions in the law. After completing its own nuclear power reactor in 1991, China bought two 900 MW reactors from France for $2B U.S. (Daya Bay 1 & 2). China has also contracted for two additional French reactors for $2B U.S. (Ling Ao 1 & 2), and two 700 MW Canadian reactors for $3B U.S. (Qinshan III). Negotiations are advanced for two 1000 MW Russian reactors. South Korea and Japan are also pursuing opportunities in the market.

Chinese officials have told U.S. firms they intend ultimately to standardize on a single western technology in both nuclear and conventional power generation. If China adopts a non-U.S. technology, and it will absent a U.S. presence, the power market (nuclear and conventional) will be closed to U.S. firms. Yet, China is the only major market that can support the U.S. nuclear power industry in the near to mid-term. If continued to be denied China, U.S. companies will be out of the business, with a corresponding loss of trained personnel to support the 100 U.S. civilian nuclear power plants. There are also implications for continued support to U.S. Navy nuclear programs.

Presently, only U.S. companies are prohibited from competing for projects in China, the world's largest and fastest growing market for nuclear power. The lifting of the prohibition on nuclear exports to China would allow U.S. firms to compete for projects worth about $15 billion over the next 14 years. This equates to 225,000 U.S. job years in high skill occupations such as design and construction engineering, management, and manufacturing. Up to one third of the value of a power plant project is sourced from suppliers to the major U.S. turbine manufacturers. Workers in 28 states are affected by the current export ban; 19 states are major centers of the nuclear power industry; an additional 10 states have a significant supplier presence

In addition to lost revenues and jobs in the United States, another cost of the sanctions is the loss to China over the 50-year life of new nuclear plants of the state-of-the-art safety features found in U.S. equipment.

(Sources: Westinghouse Electric Corporation and the U.S. Industry Coalition for Civilian Nuclear Trade With China, February 1995)

Tourism in Cuba is estimated will create a demand for about 100 to 200 bus air conditioning units per year. This would equate to about $1M to $2M annually in sales. Sanctions prohibit these sales.

(Source: United Technologies Corp., Carrier Transicold Division)

2. Commercial Highway Truck Market in Iran

• Market Substitution

After having been placed on the Commodity Control List in August 1991, validated export licenses for sales to Iran were required for on-highway tractors. The Iran-Iraq Arms Non-Proliferation Act of October 1992 then prohibited sales to Iran of any product requiring a validated export license. U.S. producers of on-highway tractors were thus excluded from the Iranian market. No other country has imposed such controls. Because of weight and maneuverability, on-highway equipment is ill suited for military use. European and Japanese producers Mercedes Benz, Volvo, Fiat, Mitsubishi, and Renault are displacing U.S. companies in the Iran market. The cost in U.S. exports was estimated at $1 billion and 19,100 jobs.

(Source: Council on Competitiveness, "Economic Security: The Dollars and Sense of U.S. Foreign Policy," February, 1994.)

1. Vietnam Markets

• Lost U.S. Exports

The U.S. embargo on Vietnam abdicated market opportunities to foreign competitors. By 1992, imports to Vietnam had reached $2.5B. Estimates of U.S. market opportunities lost per year were estimated at $1.5 billion and 28,650 jobs in power systems, transportation (locomotives), medical systems, lighting, aircraft, construction equipment, information technology, crude oil, and natural gas.

(Source: The Council on Competitiveness, February, 1994.)