Keep the Sanctions Option
Powell is wrong.

By Frank J. Gaffney Jr., president of the Center for Security Policy
February 1, 2001 12:20 p.m.

t has been apparent for several weeks now that one of the early foreign-policy challenges facing the new Bush administration will be to contend with Secretary of State Colin Powell's proclivity to make policy by personal fiat. A case in point was a pronouncement he made to Sens. Chuck Hagel, Richard Lugar, and others on the Senate Foreign Relations Committee in the course of his confirmation hearings: "I would like to participate with you in discussing how to get rid of most of [the United States' economic sanctions against other countries]."

Fortunately, there is reason to believe Secretary Powell will not get away with his effort to eliminate unilateral economic sanctions as an instrument of U.S. foreign policy. Notably, President Bush has just made clear that he intends to keep them in place with respect to Libya until its government acknowledges responsibility for PanAm 103. And Vice President Cheney has said he sees no end in sight on sanctions on Cuba until there is a regime change there.

The question is: How much damage will Mr. Powell do to unilateral economic sanctions as a necessary security-policy tool in the process of trying to "get rid of most of them"?

The damage could be severe since Powell's anti-sanctions message plays well in certain circles, both on Capitol Hill and off. In recent years, with the Cold War fast receding from memory, Republican members of Congress have shown increasing sympathy for agricultural and business interests who view dealing with odious regimes in places like Cuba, China, Iran, Libya, Iraq, and North Korea exclusively in commercial terms — i.e., whether they will be able to compete with French, German, Canadian, and other Western companies and to secure taxpayer subsidies that are often required to make such transactions lucrative. This faction within the GOP has created working majorities by making common cause with left-wing Democrats who feel a certain solidarity with such regimes, notably with respect to the latters' antipathy towards a domineering United States and their claims that the sanctions are only harming innocent civilians and retarding political reform in their countries.

A far more disciplined, organized and well-funded effort on the part of special interests — notably a consortium known as "USA Engage" — has been instrumental in engineering this unholy marriage of convenience. Television and print ads, intensive lobbying, and generous campaign contributions have secured a number of victories for the agribusinesses, exporters, and others among the anti-sanctions crowd. These include: passage of a rider to the Fiscal Year 2001 agriculture bill authorizing the shipment of food and medicine to countries on the State Department's terrorist-sponsors list; Madeleine Albright's visit to North Korea among other initiatives meant to bring an end to U.S. sanctions against the despotic and increasingly dangerous "Hermit Kingdom"; the adoption of Permanent Normal Trade Relations for Communist China; and the substitution of the term "states of concern" to temper the perception that what were formerly and properly dubbed "rogue states" are now governed by people with whom we can safely do business.

Not content with these victories, USA Engage and its legislator-allies are seeking statutory changes that would effectively eliminate the United States' ability to impose economic sanctions on a unilateral basis. Senate Majority Leader Trent Lott has announced that sanctions-reform legislation would be one of his priorities in the first session of the 107th Congress.

Presumably, what Sen. Lott has in mind is something along the lines of the disingenuously named "Enhancement of Trade, Security and Human Rights Through Sanctions Reform Act," first introduced by Sen. Lugar in 1998. The Lugar bill would radically change the latitude that currently exists with regard to the imposition and implementation of unilateral economic sanctions. For example, it would require all future sanctions to include presidential-waiver authority. President Clinton demonstrated the folly of universally offering such an out; virtually without exception, he utilized waivers to defeat the clear intent of Congress with respect to odious Chinese, Iranian, and Cuban misconduct.

The Lugar reform legislation would also establish burdensome reporting requirements designed to discourage the adoption of sanctions, a mandatory 60-day delay in their imposition, and the "grandfathering" of all contracts concluded before the sanctions went into effect. Taken together, these arrangements effectively mean that no such sanctions will be deemed workable or practicable, virtually assuring that no other nation will join us in their imposition. That prospect will make it all the easier to oppose such a step in the first place, since it is generally agreed that multilateral sanctions are more effective than unilateral ones. For good measure, Sen. Lugar would "sunset" all U.S. sanctions, making the maintenance of constraints needed to deny economic life-support to well-entrenched and hostile regimes exceedingly difficult, if not as a practical matter impossible.

These sorts of measures would, in short, significantly impinge upon the government's present authority under the Constitution to utilize sanctions in response to foreign-policy crises or national-security threats. The nation would thus be left with just two, generally unsavory, options: take military action or issue often ineffectual diplomatic warnings.

Tying our hands in that way is all the more ill-advised in light of fact that the costs of unilateral sanctions to the economy are usually greatly exaggerated. As the Congressional Budget Office's Jan Paul Acton told Congress on June 3, 1998: "To date, the cost of existing sanctions to the overall economy has been quite modest. CBO's review of research indicates that the net cost may be less than $1 billion annually of lost national income. That compares with $6.6 trillion of total national income in 1997…. The main reason that sanctions have had such a small effect on the overall U.S. economy is that the principal targets of sanctions have been countries with which the United States conducts relatively little trade."

To be sure, unilateral economic sanctions are rarely an ideal foreign-policy tool. Wherever possible, other, more precisely targetable measures, should be utilized. For example, policies aimed at removal from power of the likes of Saddam Hussein and Slobodan Milosevic are much to be preferred over economic sanctions, unilateral or otherwise.

In addition, more emphasis should be given to the use of carefully crafted financial sanctions — including limiting access of offending foreign government-controlled entities to the U.S. debt and equities markets. Such measures would affect an area of economic activity where the United States enjoys a clearly dominant position. Restrictions on the issuance of stocks and bonds in the U.S. market, for example, would not jeopardize underlying American exports, jobs, or people-to-people contacts.

It behooves Secretary Powell and the rest of the Bush team to preserve the latitude to impose the option of economic sanctions, by rejecting legislation like Sen. Lugar's, while working in less counterproductive ways to ensure that those sanctions which are imposed are as effective as possible, with as few unintended and undesirable impacts on American businesses, farmers, and other interests.