Let's do business
All is fair in love and trade
By Shahriar Afshar
June 11, 1999
There have been some recent developments in the sanctions debate in
Washington that have significant impact on the business community. This
is namely due to a recent presidential announcement and several new congressional
bills meant to reinstate the U.S. as a reliable supplier in the international
trade community. But we are no there yet.
On April 28th, 1999 President Clinton announced that his administration
will exempt commercial sales of food, medicines and medical equipment from
future unilateral sanctions regimes where he has the authority to do so.
The Administration will also extend this policy to allow such commercial
sales to currently embargoed countries. The new policy is the result of
a sanctions reform movement taking shape between Capitol Hill and the Administration.
One of the sectors hardest hit by the Administration's sanctions policies
has been the agricultural community. In response, Congress has come up
with a string of new sanctions reform bills such as the Economic Sanctions
Reform Act, the Freedom to Market Act, the Food and Medicine Sanctions
Relief Act, and the Enhancement of Trade, Security, and Human Rights through
Sanctions Reform Act. Further, as a follow up to the April 28th announcement,
the House Agriculture Committee held a hearing on June 9th to discuss the
president's announcement to lift economic sanctions on Iran, Libya, North
Korea, and Sudan.
Here is how the debate is taking form and what each side seems to want.
In this corner, we have congressional sanctions reform proponents, backed
by farmers associations and business lobbies, all promoting prescriptive
regulations on the president on when and how he can impose unilateral trade
sanctions on a particular country. The argument is simple. Every year,
the U.S. losses billions in potential exports, not to mention credibility
as a reliable international supplier. Our global competitors simply move
into countries where we decide to pull out. Unilateral, as opposed to multi-lateral,
sanctions have been an utter failure. They have hurt the U.S. business
community from San Diego to New York far more than countries with questionable
Immediately after the new policy announcement by the President Clinton,
attention shifted to new procedural and licensing requirements. Proponents
of sanctions reform want the Treasury Department's Office of Foreign Assets
Control (OFAC) to implement simple and flexible rules, especially concerning
farm and medical sales to Iran.
In the other corner, we have the Administration which wants to impose
or waive sanctions when it feels like it. The president's interest in retaining
maximum flexibility is meant to be used in foreign and trade policy negotiations.
For example, in 1998 the State Department waived imposition extra-territorial
sanctions under the Iran Libya Sanctions Act (ILSA) when a Russian company
became a partner in an oil development project in Iran.
ILSA was completely un-enforceable anyway since neither Russian nor
any other foreign companies are subject to U.S. laws (unless of course
U.S. companies are subject to Chinese laws?) Nevertheless, the State Department
used a special presidential waiver authority under ILSA to send a good-will
gesture to Russia in gaining their cooperation on exercising restraint
with Iran. Perhaps if the Russian economy was not in such dire straits,
that gesture would have meant something more than it did. It's a tough
fight for survival out there and many developing economies are much more
interdependent on each other than what the U.S. can even relate to.
An old friend once told me that there is no leadership by consensus.
That is a great slogan for a yuppie office poster but truth be known, that
old friend of mine is now very alone and generally considered to be like
a bull in a china shop. No one relates to him because he does not make
an effort to relate to his surroundings or to changing times. In retrospect,
I think shortly after the Cold War, U.S. foreign policy took a left turn
somewhere and got lost when it came to being a team player. The only way
we can find our way back into the international community is to use trade
opportunities abroad as our guiding light.
We just don't live in a zero sum society anymore. The U.S. can exercise
all of the leadership it cares to handle, but lets do it as a member of
a global village. Wouldn't it be nice if at least one of our allies or
trading partners like Canada goes along with our foreign policy initiatives
or trade sanctions? Well, they don't. In fact, they are not even looking
back or making any excuses on dealing with Iran. The official Canadian
policy is to "hurry up and get established in Iran before the Americans
get here!" Well that's gratitude for you from a NAFTA member and our
number one trading partner for the past 50 years. If we can't even get
Canada to accept our sanctions policies, what possible hope do we have
to get anyone else to go along?
Let's support liberalizing our trade practices, promoting free trade,
and encouraging sanctions reform legislation at every opportunity, not
because big business or lobbyists say so, but because its the right thing
to do as a responsible member of a global community. The Canadian-Iranian
example simply goes to prove that all is fair in love and trade. Sometimes
leadership is knowing when to follow.
Shahriar Afshar is the president of the Iranian
Trade Association in La Jolla, California. To top
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