USA*ENGAGE Says CBO Sanctions Study Misses the Point

Wednesday, 14 April 1999

"While CBO has accepted the fact that America sacrifices $19 billion in export sales each year due to the imposition of unilateral sanctions, no attempt has been made to quantify, or even consider, either the long term opportunity costs that are incurred by U.S. business and agriculture, or the 200,000 U.S. jobs lost annually," said Kittredge. "Also, there is no recognition that the threat of unilateral sanctions hurts America's reputation as a reliable supplier, and that this has tangible, long-lasting implications. Finally, the cost of unilateral sanctions is particularly great given the fact that they are usually ineffective and often counterproductive."

Kittredge pointed to the classic example of the Soviet grain embargo, lifted nearly 20 years ago. "American farmers are still feeling the effects of the grain embargo, which did little more than hand over a major agriculture market to farmers from Canada, Australia and other countries. Once bitten, it's not difficult to understand why a nation may seek out non-U.S. suppliers if they fear that their American sources may one day dry up."

"The CBO study also conveniently avoids any discussion of the effectiveness of unilateral sanctions -- which most experts would agree are often little more than an empty gesture," Kittredge continued. "American workers deserve to know what the U.S. is accomplishing by ceding critical international growth markets to foreign competitors such as Airbus of Europe, Komatsu of Japan, and Total of France."

In the last two years over 30 studies have been issued by well-respected think tanks of all ideological persuasions, trade associations and governmental organizations such as the International Trade Commission and the President's Export Council, on the issue of unilateral sanctions. These studies point to a common theme: that U.S. unilateral trade sanctions have been overused -- by Congress and the Executive Branch -- and that they are counterproductive, ineffective and often end up hurting U.S. interests more than the target country. (A copy of these studies appears on the USA*Engage Web site.)

"We disagree with the conclusion drawn in this report that $19 billion is 'insignificant.' This conclusion is particularly ill timed given that Americans are now digging deep into their pockets to pay their taxes. I am sure that most Americans would consider $19 billion a significant sum of money...after all, it's more than half of the New York State budget alone.

CBO apparently argues for the worst of all possible worlds -- sacrificing export markets that benefit all Americans, while promoting the use of an ineffective foreign policy tool," Kittredge concluded. USA*ENGAGE is a coalition of over 670 small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad.