Reinsch Calls ILSA "Counterproductive"

Thursday, 28 June 2001

"We support ILSA's goals. However, it is creating collateral diplomatic damage to U.S. interests for essentially symbolic purposes," Reinsch said. "Because these issues are so important, they require a more sophisticated and targeted approach than a very blunt instrument such as ILSA."

Reinsch emphasized the strained relationships with many U.S. allies and trading partners over the threat of ILSA's secondary boycott. For instance, the Congressional Research Service reported that $10.5 billion of foreign investment has taken place in Iran's oil and gas sector since 1997. Iran also expects $1.5 billion to be invested in its petrochemical sector this year. These investors are from France, Canada, Italy, the Netherlands, the United Kingdom, Japan and Norway - companies from the United States' closest allies and most important trading partners, which have not joined the U.S. in its sanctions, nor been deterred by the threat of ILSA.

"ILSA has created precisely the situation it sought to avoid - Iran and Libya are increasingly able to develop their oil and gas reserves through foreign investments from which American firms are excluded. In short, it does not meet a national interest test," he said.

"We are opposed to renewing these sanctions because they have been ineffective, costly to American economic interests, and posed significant diplomatic complications for the United States. Allowing ILSA to expire would clear the way for a new policy based on current realities, and better designed to U.S. interests and carefully considered policy objectives," Reinsch concluded.

USA *ENGAGE is a coalition of 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. For more information on USA* ENGAGE and the harmful effects of unilateral trade sanctions, visit the USA* ENGAGE web site at www.usaengage.org.

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