STATE DEPARTMENT'S EIZENSTAT ON U.S

[moe@xxxxxxxxxxxxx]

Dear BurmaNetters and Friends,
                                                 here's some useful data
regarding U.S. Sanctions.

Sincerely,

Julien  Moe
--------------------

FILE ID:97091705.ECO

DATE:09/17/97

TITLE:17-09-97  INTERVIEW: STATE DEPARTMENT'S EIZENSTAT ON U.S. SANCTIONS


TEXT:

(Under secretary defends Helms-Burton, other policies) (2510)


Washington -- Economic sanctions should not be the first response to

acts of irresponsible behavior by rogue states, but they do have

value, says Stuart Eizenstat, U.S. under secretary of state for

economics, business, and agricultural affairs.


Rising use of sanctions is a consequence of the end of the Cold War;

U.S. use of unilateral sanctions results from unique leadership

responsibilities, he said in an interview published September 17 in

USIA's electronic journal Economic Perspectives.


According to Eizenstat, the United States tries to make sanctions

multilateral when possible, and to impose unilateral sanctions in ways

that maximize the pain for targeted countries and minimize the pain

for U.S. business and U.S. allies.


Eizenstat criticized challenges by the European Union (EU) in the

World Trade Organization (WTO) of the Helms-Burton Act, which aims at

foreign companies doing business in Cuba, and of a Massachusetts state

law that aims at foreign companies doing business in Burma.


He described Clinton administration objections to bills pending in

Congress for eliminating the president's discretion in imposing

sanctions and expresses interest in proposals for reforming the way

Congress acts on sanctions.


The complete Economic Perspectives journal can be found on the USIA

web site at http://www.usia.gov/journals/journals.htm.


This interview was conducted by USIA Economics Writer Bruce Odessey:



Question: What is the Clinton administration's general policy about

using foreign policy-related economic sanctions?


Eizenstat: Economic sanctions are an important foreign policy tool

intermediate between diplomacy and the use of force. They are used

when other measures are insufficient and when their imposition is

likely to change the behavior of the offending state. They should be

used when traditional diplomatic and other efforts at persuasion have

failed, not as a first order of action. They generally should be

targeted only at rogue regimes that act contrary to international

norms.


Sanctions are not a one-size-fits-all foreign policy tool. If the

administration has the requisite flexibility in applying sanctions, it

designs the sanctions regime to target effectively the vulnerability

and offensive behavior of the sanctioned country while minimizing

damage to U.S. interests.


Sanctions are intended to highlight misconduct by rogue regimes, to

alter the behavior that threatens our national interests and the

stability of the international community. Sanctions address misconduct

in human rights, terrorism, narcotics, weapons of mass destruction,

and other areas where such conduct is considered unacceptable by world

standards.


In order to maximize the effectiveness of sanctions when we do use

them, we prefer sanctions that have multilateral support and

participation. Multilateral sanctions are more likely to be effective

against a targeted country by showing unity of international purpose

and by including a maximum number of business and commercial interests

around the world. Also, multilateral sanctions minimize damage to U.S.

competitiveness by distributing the burden across responsible

countries.


At the same time we are prepared to use unilateral sanctions when we

cannot get a multilateral sanctions regime together and when important

national interests are at stake. These sanctions should be shaped in

ways that are consistent with our international obligations and that

reflect cost-benefit analysis. Presidents should be given flexibility

in utilizing such unilateral sanctions, as Title III of the

Helms-Burton Act does.


It's important for our friends and allies to recognize our feeling

that trade doesn't occur in a vacuum. Prosperity also depends on a

stable and secure world where nations respect common rules of

behavior. Business as usual with rogue regimes can often strengthen

their capacity to harm not only U.S. interests, but also the interests

of our friends and allies as well.


The measures that we've adopted are designed to maximize pressure on

rogue regimes and encourage behavior that respects common, basic

principles and values that underlie the entire multilateral system.


Q: What are the reasons for more frequent U.S. use of sanctions in the

1990s?


Eizenstat: I believe that it has to do with the change in the

international environment. With the end of the Cold War a whole host

of other challenging issues has arisen. And with the United States as

the preeminent, predominant world power, we have an obligation to lead

on these new issues, which often get one directly into sanctions --

issues like drug trafficking, lack of respect for basic human rights,

terrorism, nuclear proliferation. These have always been important,

but they tended to take a back seat to Cold War concerns. Now they're

in the front seat.


And it is often rogue regimes that are most involved in these areas of

international misconduct. Sanctions are a logical way of trying to

deal with these particular situations although, again, they ought not

to be our first order of business, and we should exhaust other

diplomatic and political avenues before resorting to them.


Q: How do you respond to opposition by U.S. business and foreign

allies to unilateral sanctions, as well as to critics who argue that

sanctions usually fail to work?


Eizenstat: We recognize that certain types of sanctions are opposed

both by our allies and our business interests. We always strive to use

sanctions in ways that maximize pressure on the targeted regime while

minimizing tensions with our allies and friends and doing the least

damage possible to our business interests.


We recognize particularly that unilateral sanctions have a cost to

U.S. economic interests. For example, abandoned exports mean lost

exports and lost jobs, not just for the initial sales but often for

years of after-sales service, particularly in a competitive or

emerging market. Sanctions can also severely damage U.S. relations

with the targeted country and disadvantage businesses in

non-sanctioned sectors. U.S. components can get designed out of

products, and U.S. companies can get frozen out of consortia.


Multilateral sanctions are the ones most likely to be effective in

furthering our interests. At the same time, short of a full

multilateral embargo, the loss of a U.S. market or access to U.S.

capital can inflict costs on a targeted country. A logical policy

option, therefore, is to deny this access to a rogue state.


Now let's look at instances where multilateral sanctions have been

generally effective. While they took time, multilateral sanctions

against South Africa clearly were a factor in ending apartheid. They

were clearly a factor in bringing Serbia to the negotiating table in

Dayton. Sanctions have limited the damage Iraq and Libya could do to

the peace-loving countries of the world.


For sure, unilateral sanctions face greater challenges to their

effectiveness. But there are times when it's important for the United

States to stress certain values for which we stand strongly, even

though their immediate effectiveness may be attenuated. And we always

try to balance the responsibilities we have to lead, to project U.S.

values, to protect U.S. and world interests in areas like terrorism

and drug trafficking and proliferation against what we know to be the

costs both to relationships with our allies and to our business

interests. This is a delicate balance. It's not an easy one.


Q: How does the administration respond to allies' complaints about

extraterritorial provisions in the Helms-Burton and Iran-Libya acts?


Eizenstat: First let me say that the Helms-Burton Act deals only with

foreign companies that are profiting from the use of confiscated U.S.

property. By any elemental amount of due diligence they could

determine the property was in fact confiscated because the State

Department maintains a claims registry. So it's hard to see how the

act is doing anything other than legitimately protecting the property

rights of U.S. citizens.


World Trade Organization agreements do not address the issue of

sanctions directly. We realize the concerns about these sanctions, and

that's why we try to maximize the pressure on targeted regimes and

minimize friction with our allies. We believe the actions we have

taken are consistent with our international obligations, we are

prepared to defend those actions, and we strongly believe that the

European Union is incorrect in bringing what are essentially political

disputes into a trade forum.


There has been no challenge to the Iran-Libya Sanctions Act. And the

challenge to Helms-Burton was suspended after the April 11 agreement

allowing the United States and the EU to try to develop an

international discipline that, if implemented and adhered to, could

lead to an amendment to Helms-Burton Title IV.


Q:  What is the state of play in your negotiations with the EU?


Eizenstat: We have worked very hard with the EU over several

negotiating sessions to begin to develop international disciplines for

deterring investment in confiscated property worldwide. I think that,

while many obstacles remain, we have begun to make some progress. Both

sides are negotiating in good faith.


At the same time, we've begun a genuine dialogue with Congress with

the view of obtaining an amendment providing the president with waiver

authority for Title IV if those disciplines are negotiated and if

they're adhered to. We've had a very transparent process with Capitol

Hill, with leading senators and congressmen, to inform them as to

where we are.


And we think this is the way to resolve these issues -- not by

bringing to a trade panel what essentially are political disputes.

That will only weaken the WTO; it will hold it up to unnecessary

criticism and opprobrium in the Congress. The WTO is not the

appropriate forum for resolving political differences, but rather for

traditional trade disputes. No one really can contend that, for

example, the Iran-Libya Sanctions Act or Helms-Burton were imposed as

a trade protection device. Rather, they were imposed to advance

foreign policy agendas with no intention of benefiting U.S. business

at the expense of businesses elsewhere in the world.


Q: What's your view of proposed legislation for eliminating the

president's six-month waiver authority in Title III of Helms-Burton?


Eizenstat: This would be a very serious mistake because we've been

able to utilize the discretion in Title III to achieve the broadest

multilateral coalition of interests in promoting democracy and human

rights in Cuba that we've had in the 37 years that Castro's been in

power.


The European Union's action in December on a common position

conditioning any improvement in political and economic relations on

specific changes in the human rights and democratic conduct of Cuba,

the actions by our Latin friends in the Ibero-American summit, actions

by European nongovernmental organizations and by European business

interests -- all of these have been possible because of the discretion

provided by Title III.


If you take that flexibility away, it will lead, I think, to a

substantial impairment of the progress we've made and act directly

contrary to the efforts that this Congress shares with the

administration in obtaining cooperation from the broadest number of

countries in isolating Castro and in pressing for changes in Cuba on

human rights and democracy. It would be a very, very serious blow and

a very serious mistake.


Q: Does the administration have a policy in general on sanctions

measures imposed by U.S. state or local governments, or in particular

on the Massachusetts law imposing sanctions on companies doing

business with Burma?


Eizenstat: In general, it is best to allow the president and the

secretary of state to conduct foreign policy. At the same time we

recognize the reasons, the moral and human rights concerns, that led

Massachusetts to act and led other states in other instances to act.


Here again we're disappointed that the European Union requested WTO

dispute-settlement consultation when we were working in good faith to

resolve the matter. It's another instance of using the WTO on a

measure clearly not motivated by trade protectionism.


This is especially the case given the strong interest that the United

States and the European Union share in improving the human rights

situation in Burma. And, by the way, the European Union has taken

steps -- more so than I think many recognize. For example, they cut

off economic aid to Burma. They don't participate in fora with Burma.


In light of this and in light of the unanimous resolution by the

European Parliament calling on the European Commission to refrain from

addressing the Massachusetts law in the context of a WTO panel

process, it makes it all the more surprising that the EU would have

acted in this way.


Since we're facing potential litigation, I'm not prepared to go into

our view of the allegations on the law's effects, and it would be

premature to discuss our legal strategy. But we'll continue to consult

with officials from Massachusetts and the European Union to try to

reach a mutually satisfactory resolution.


Q: What is your view of the bill sponsored by Representative Bill

McCollum and passed by the House of Representatives for eliminating

the president's discretion in imposing sanctions against State

Department terrorist-list countries Syria and Sudan?


Eizenstat: I've talked with Congressman McCollum, who is sincerely

interested in trying to deprive states on the terrorist list from

perpetrating acts of terror, and we greatly respect his motives. We do

have some concerns with the breadth of the legislation and with its

impact on certain countries like Syria. We're trying to engage Syria

in a peace process that would mitigate the very terrorist activities

that the congressman is legitimately concerned about. We are trying to

work out those differences with the sponsors on Capitol Hill. We're

not there yet, but Congressman McCollum has assured me that he is

willing to meet with us to discuss our concerns.


Q: What is your view of the Specter-Wolf bill for imposing unilateral

sanctions against countries practicing religious discrimination?


Eizenstat: We're looking at this legislation. We feel very strongly,

of course, about religious discrimination. The president and others in

the administration, including the secretary of state, have spoken up

very strongly against it. But we want to make sure that we are using

the most effective devices to protect religious freedom.


Q: What is your view of suggestions from a few members of Congress

about reforming the process by which Congress imposes sanctions,

including tests for likely effectiveness as well as cost-benefit

analysis?


Eizenstat: We've begun to follow this and to talk to people in the

business community and others about it. It reflects the concerns

business has about the growing use of sanctions. We will look at this

legislation, now still in formation, and at the concerns of the

business community in the weeks and months ahead, making sure that our

sanctions policy is effective and that we have the maximum discretion

and flexibility to use sanctions when we need to do so for national

security reasons, but in ways that minimize damage to our own business

interests and to relations with our allies. Creating that correct

balance is something we have an interest in achieving.