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Let's do business
All is fair in love and trade

By Shahriar Afshar
June 11, 1999
The Iranian

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 policies.

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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