[Congressional Record Volume 144, Number 73 (Tuesday, June 9, 1998)]
[Extensions of Remarks]
[Page E1078]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


        AGRICULTURAL COMMODITIES SHOULD BE EXEMPT FROM SANCTIONS

                                 ______
                                 

                     HON. GEORGE R. NETHERCUTT, JR.

                             of washington

                    in the house of representatives

                         Tuesday, June 9, 1998

  Mr. NETHERCUTT. Mr. Speaker, today, I am introducing legislation on 
behalf of more than thirty original cosponsors to exempt federally 
guaranteed agricultural commodities from the application of sanctions 
under the Arms Export Control Act. Recent nuclear tests in India and 
Pakistan forced the Administration to impose sweeping economic 
sanctions on both countries, with potentially devastating consequences 
for American agricultural exports to South Asia.
  Under the terms of the Arms Export Control Act, the President has 
very little flexibility in the imposition of sanctions. When a non-
nuclear weapon state detonates a nuclear device, the U.S. government is 
required to terminate sales of defense articles, end foreign military 
financing, oppose all loans from international financial institutions, 
and prohibit all commercial loans from U.S. banks, except for the 
purchase of agricultural commodities. The Act also requires the 
government to deny any credit guarantees or financial assistance by any 
department or agency.
  This sanction could effectively cut off any federally guaranteed 
agricultural exports to either India or Pakistan. These new sanctions 
come at a difficult time for many American farmers, who are 
experiencing historically low grain prices, and who could now be locked 
out of a market of 1.1 billion consumers.
  Some of these sanctions may have a place, and U.S. interests are 
certainly served by limiting the flow of technologies and financing 
that contribute to weapons proliferation. But having failed to deter 
nuclear testing, what continued purpose do the broader, unilateral 
sanctions serve? If international competitors quickly fill the market 
that the U.S. has unilaterally abandoned, the effects of most sanctions 
will be negligible. In a classic case of unintended consequences, the 
sanctions on both India and Pakistan may severely impact certain 
sectors of the American economy while having relatively little 
consequence on the target nations.
  I am particularly concerned about sanctions which deny all U.S. 
credit guarantees to both nations, a prohibition which could 
unintentionally punish American agricultural producers. Export credit 
guarantee programs administered by the Department of Agriculture are a 
critical tool for foreign agricultural sales, but the Arms Export 
Control Act could effectively cut off any federally guaranteed exports 
to either India or Pakistan. Such sanctions come at a difficult time 
for many American farmers, who are experiencing historically low grain 
prices, and who could now be locked out of a market of 1.1 billion 
consumers.
  The issue goes beyond the specific programs guaranteed through the 
Department of Agriculture by undermining American's reliability as a 
supplier. Sanctions introduce an uncertain element that makes our 
trading partners reluctant to do business with us when more consistent, 
reliable trade partners are available. International competitors have 
already indicated a willingness to fill orders for American 
agricultural commodities. Our farmers lose twice in this situation--we 
miss the first sale and will have difficulty convincing the governments 
of India and Pakistan to buy from us in the future.
  This legislation provides a necessary clarification of applicable 
sanctions under the Arms Control Export Act. While I believe that the 
Secretary of Agriculture has the authority to make this determination, 
the terms for an exemption remain unclear and require codification. 
This effort must be part of a larger process of reviewing the 
effectiveness and hidden costs associated with unilateral sanctions. 
Legislated, mandatory sanctions force diplomatic flexibility to the 
side in favor of a chainsaw approach to carving out foreign policy 
positions. The Arms Export Control Act has forced the President into a 
corner and marginalized the role of the United States in South Asia. 
Pulling India and Pakistan away from the precipice of armed 
confrontation will require an element of delicate maneuvering that 
should be accommodated in the U.S. Code.

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