[Congressional Record (Bound Edition), Volume 146 (2000), Part 11]
[Senate]
[Pages 15623-15624]
[From the U.S. Government Publishing Office, www.gpo.gov]



             UNILATERAL ECONOMIC SANCTIONS: LESSONS LEARNED

  Mr. LUGAR. Mr. President, the role of unilateral economic sanctions 
in the conduct of American foreign policy has been part of our debate 
in the Congress and in the executive branch for the past three years. 
Attempts to modify or reform the way the United States utilizes 
unilateral economic sanctions in the conduct of our foreign policy have 
consumed the attention of several committees, spawned numerous 
sanctions reform bills--including my own efforts--resolutions and 
amendments, generated a number of floor debates, stimulated countless 
discussions within this body and with the administration and prompted 
many press conferences and news releases. It even moved the 
distinguished Majority Leader to appoint an ad hoc bipartisan Senate 
task force to sort through the issue in the hopes of finding a policy 
path or sanctions that best promotes our national interest.
  Outside the United States Government, virtually every think tank, 
university, trade association, and foreign policy association has 
invested time and resources to studying, analyzing and making 
recommendations on the subject of unilateral economic sanctions. This 
is as it should be. The subject is integral to our approach on foreign 
policy, national security and international trade.
  I have been pleased that our debate and the large volume of 
literature have led to considerable re-thinking about the efficacy of 
unilateral economic sanctions. I have noted that the frequent resort to 
use of unilateral sanctions to achieve foreign policy goals has 
declined and that our sophistication about the inter-relationship 
between unilateral economic sanctions and policy has grown 
dramatically. One of the most important players in our debate over the 
past few years has been the unique coalition of some 675 export-
oriented companies in the United States called USA*ENGAGE. They have 
been critical in helping to shape the debate on unilateral economic 
sanctions, a debate which continues virtually as I speak.
  I recently read a short speech by Mr. William Lane who serves as the 
Chairman of the USA*ENGAGE trade association and the Washington 
Director of Caterpillar corporation titled ``USA*ENGAGE: Lessons 
Learned: The Cost of Conducting Foreign Policy on the Cheap.'' The 
remarks were offered at the French Institute on International Relations 
last month.
  I believe my colleagues will find Mr. Lane's remarks insightful and 
informed so I ask unanimous consent that the full speech be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

          Remarks of William Lane: USA*ENGAGE: Lessons Learned


           the cost of conducting foreign policy on the cheap

       I very much appreciate the opportunity to discuss the issue 
     of economic sanctions before such an influential audience. 
     For the past four years I've been closely associated with the 
     public policy effort known as USA*ENGAGE. Today, I'd like to 
     talk about that effort--with specific focus on the lessons 
     we've learned during what has turned into a rather remarkable 
     campaign.
       USA*ENGAGE was organized in reaction to a disturbing 
     development: for much of this decade the United States has 
     embraced an outdated policy tool--unilateral sanctions--to 
     influence foreign governments. In fact, the U.S. has imposed 
     sanctions with such vigor that by 1997 over half the world's 
     population was the target of some form of economic punishment 
     at the hands of the United States.
       Recognizing that such sanction policies rarely work, are 
     often counterproductive and almost always costly to other 
     national objectives, U.S. business and agriculture felt 
     compelled to challenge the wisdom of a sanctions-based 
     foreign policy. Organized as USA*ENGAGE, the four-year-old 
     effort has had a definite impact on how America's 
     policymakers now view sanctions.
       To appreciate the lessons learned, it is best to recall the 
     scope of the problem. Put bluntly, with the end of the Cold 
     War, many U.S. policymakers embraced the simplistic view that 
     sanctions were the perfect compromise between doing nothing 
     and taking military action.
       So the United States sanctioned. It sanctioned South Korea 
     and Saudi Arabia over labor rights; India and Pakistan for 
     nuclear testing; Colombia for narcotics; and China for human 
     rights abuses and environmental concerns. Citizens of Canada 
     and Israel were sanctioned for doing business in Cuba. Egypt 
     and Germany were threatened with sanctions because of 
     concerns about religious persecution, as were companies in 
     Russia, Malaysia and France for investing in Iran's petroleum 
     sector.
       How many sanctions were imposed? In 1997, the President's 
     Export Council found that the U.S. was targeting unilateral 
     sanctions against 73 countries, while the Congressional 
     Research Service cited 125 measures authorizing unilateral 
     sanctions.
       Did the sanctions work? The Institute for International 
     Economic concluded that less than one in five unilateral 
     sanctions resulted in anything close to the desired result. 
     However, the one thing unilateral sanctions have clearly done 
     is to hurt U.S. interest--annually costing as many as 250,000 
     high-paying American jobs and reducing U.S. exports by about 
     $19 billion.
       From our perspective, sanctions also ran counter to the 
     reality that in many developing countries American business 
     represents one of the most progressive elements of society. 
     By encouraging trade and investment abroad, America not only 
     helps create jobs and higher living standards; if also 
     promotes values that encourage political freedom, the rule of 
     law, and respect for human rights. From better schools and 
     health care to improved infrastructure and housing, 
     commercial engagement can make a positive difference in the 
     lives of millions.
       At the same time, the positive contribution made by the 
     many non-governmental organizations (NGOs) cannot be 
     underestimated. While we recognize there are no guarantees in 
     foreign policy, we've learned that for engagement to work, it 
     needs to be pursued at many levels--political, diplomatic, 
     economic, charitable, religious, educational, and cultural. 
     Rather than view each other as adversaries, business and the 
     NGO communities would be well served to be supportive of 
     common objectives.
       So, the strategy of USA*ENGAGE was to engage friend and foe 
     alike in the sanctions debate. Our original hope was that 100 
     companies would join us. Clearly, this was an issue of great 
     concern for the business community, as our membership quickly 
     swelled to 675 companies.
       Moreover, we engaged the academic community and think 
     tanks. We engaged non-traditional business allies ranging 
     from religious and humanitarian organizations to human rights 
     groups. We engaged the Congress and Clinton Administration. 
     We worked with the media and aggressively used the Internet 
     to engage the public--building a web outreach program that 
     was receiving 140,000 hits per month at its peak. With our 
     encouragement, the sanctions issue even became the national 
     college-debating topic.
       To be frank, our message evolved with time. Initially we 
     stressed what our experience told us was true:
       (1) Unilateral sanctions don't work and can be costly;
       (2) Engagement--when pursued at all levels--can be a strong 
     force for positive change;
       (3) Isolating a country from positive values and means of 
     influence rarely gets results;
       (4) Multilateral actions are almost always more effective 
     than unilateral ones.
       As the public debate continued, our views coalesced around 
     one overriding theme: the United States cannot conduct an 
     effective foreign policy on the cheap. Unilateral sanctions 
     are not only the lazy man's foreign policy, but a symptom of 
     a larger problem: a lack of recognition of the broad array of 
     foreign policy tools--ranging from carrots to sticks--that 
     are available.
       Sanctions--even unilateral ones--at times may be necessary, 
     but other foreign policy tools must be part of the equation. 
     These include the Foreign Service. USAID, military and 
     intelligence agencies, as well as multilateral institutions 
     like the UN, World Bank, IMF and WTO. But for these tools to 
     work, U.S. leadership, commitment, and funding is essential.
       The problem with unilateral sanctions is that they often 
     cut off American influence and hurt the very people the U.S. 
     is trying to help. We don't think it is an accident that the 
     countries the United States has attempted to isolate the 
     most--Cuba and North Korea--have changed the least over the 
     past 40 years.
       The efforts of USA*ENGAGE have prompted a reexamination of 
     many U.S. sanction policies. Sanctions have been lifted 
     against Colombia, Vietnam, and both South and North Korea. 
     The U.S. has rejected sanctions against Mexico, Indonesia, 
     Russia, Malaysia and France and waived sanctions against

[[Page 15624]]

     India and Pakistan. Earlier this week, the U.S. Supreme 
     Court, in a rare unanimous vote, ruled that state and local 
     sanctions are unconstitutional. There has even been movement 
     toward engaging Cuba, with legislation now moving in the 
     Congress that would open the door to U.S. shipments of food 
     and medicine.
       While a few new sanctions--Burma and Sudan--have been 
     imposed in recent years, it is clear that policymakers view 
     unilateral sanctions in a more critical light. It is 
     important to note that last year, and so far this year, the 
     United States has not imposed any unilateral sanctions of 
     note. This is a far cry from 1996, when USA*ENGAGE was 
     organized. In that year alone, according to the National 
     Association of Manufacturers, the U.S. imposed 23 unilateral 
     sanctions, including two measures--the Helms-Burton Act and 
     the Iran-Libya Sanctions Act--that were unusually onerous in 
     that extraterritorial sanctions were authorized.
       For our part, business now sees value in supporting issues 
     that it previously ignored--such as encouraging America to 
     pay its UN arrears and ensuring that the IMF and Foreign 
     Service are adequately funded.
       Under the leadership of foreign policy and trade experts 
     like Senators Lugar, Kerrey and Hagel and Representatives 
     Crane, Dooley and Manzullo, there is a serious effort in 
     Congress to enact legislation that would put in place a more 
     deliberate process to use when the U.S. considers new 
     unilateral sanction proposals. Known as The Sanctions Process 
     Reform Act, this common sense legislation is a good bill and 
     should be enacted.
       While this legislation is important, it won't be new laws 
     that stop policymakers from adopting new unilateral sanctions 
     rather than pursuing more effective multilateral actions. Nor 
     will new laws ensure that our leaders recognize the full 
     power of engagement and the risks associated with isolation. 
     That is why we must continue to be vigilant and keep U.S. 
     foreign policymakers on a path that included multilateral 
     solutions to international problems.
       What will ultimately change America's sanctions-base 
     foreign policy will be Americans who--armed with the facts--
     demand a more effective foreign policy. To that end, the 
     ultimate success of USA*ENGAGE will depend on whether the 
     lessons learned are reinforced by a commitment from our 
     leaders to refrain from conducting foreign policy on the 
     cheap.
       As a conclusion, I'd like you to note that perhaps the most 
     telling event to illustrate the evolution of U.S. sanctions 
     policy took place earlier this week. The decision this week 
     by President Clinton to drop many of the U.S. sanctions that 
     have been in place against North Korea for nearly a half a 
     century was indeed profound. What better way to mark the 50th 
     anniversary of the Korean War than to finally make 
     significant progress towards ending the Cold War on the 
     Korean Peninsula?
       The United States should now further follow the lead of 
     South Korea, as we too face an opportunity to ease tensions 
     with a hostile neighbor. America can learn from the Koreans 
     by opening a dialogue with the government of Cuba. Engagement 
     is working throughout the world--it can work in our backyard 
     too. Perhaps that will be the greatest lesson we have yet to 
     learn.
       Thank you.

                          ____________________