SANCTIONS

Sanctions involve the deliberate withdrawal, or threat of withdrawal, of customary trade or financial assistance by one or more countries against another country. Also known as embargoes, economic sanctions refer to measures taken by one or more nations against another country to halt trade with the target country. Sanctions may be imposed on exports or imports of specific products, financial assistance, and specific methods of transportation. When a government imposes a sanction, businesses that violate the sanction are subject to legal penalties.

There are a variety of political and economic reasons for imposing sanctions, or embargoes, against other countries. Under international law, the United Nations may impose economic sanctions on a nation that is deemed to be a threat to international peace and security. When the United Nations imposes an embargo or sanction, as it has done against such countries as Southern Rhodesia, South Africa, and the former Yugoslavia, member nations are requested to stop trading with the specified country. The embargo or sanction may cover all trade, or it may be limited to specific goods, such as the arms embargo that was in effect against South Africa.

Under the General Agreement on Tariffs and Trade (GATT), economic sanctions can be imposed by the World Trade Organization (WTO). GATT members could request that sanctions be imposed on countries they felt were obstructing trade. It remained to be determined how such powers would be used to affect a country's nontariff barriers. For example, the United States was concerned that such powers to impose sanctions could affect its food labeling and pollution standards laws, for example, if they were regarded by other nations as obstructing international trade.

Outside of the United Nations and the WTO, sanctions may be imposed unilaterally by a single country, as the United States did against Nicaragua in the 1980s, or multilaterally by a group of countries, as the Arab States have done against Israel. Imposing economic sanctions puts economic pressure on a country to change its political or economic policies. Unilateral and multilateral sanctions, however, may be broken by rival countries that do not agree with them. The United States has had an embargo on trade with Cuba since the early 1960s, but its effect was diminished by the massive aid Cuba received from the Soviet Union during the Cold War.

Unilateral sanctions are typically imposed by one country on another for the purpose of applying pressure or in retaliation for certain economic or political policies. The United States first imposed sanctions for the purpose of opening another country's market to American products in 1988. In an effort to open the Japanese market for cellular telephones, the United States resorted to trade sanctions against selected Japanese products in 1994. In 1994 the United States also imposed economic sanctions on Taiwan to protest that nation's illegal trade in tigers and rhinoceroses. Thus, the objective of a particular sanction may be very limited, or it may be very ambitious, as in the case of sanctions imposed during wartime between hostile nations.

More than 100 sanctions were applied between the end of World War II and the United Nations embargo against Iraq during the Gulf War. The United States took a leading role in approximately two-thirds of them. For the United States, economic sanctions were a major foreign policy tool during that period. They continued to be used during the Clinton administration, when the United States imposed more than 60 sanctions, more than half of all U.S. sanctions in the 20th century. Examples include those mentioned as well as sanctions against Russia and India for selling missile technology, expanded sanctions against Cuba, and sanctions against Myanmar (Burma) for human rights abuses. As of mid 1998 the United States had sanctions in effect against more than 70 countries, and the U.S. Congress was considering 30 additional sanctions.

While the United States has imposed sanctions more often than any other nation, sanctions can sometimes have a negative effect on domestic businesses. While tariffs are designed to protect domestic industries, sanctions prohibit domestic companies from doing business in the targeted countries. When other countries fail to support U.S. sanctions, then it is foreign competitors doing business in the targeted countries who benefit. Other negative effects of trade sanctions include making it difficult for domestic businesses to forecast where the next sanctions will be imposed and making it seem as if U.S. suppliers are unreliable when they can no longer do business in a targeted country.

Sanctions, like tariffs, are a barrier to free trade. Although some sanctions have resulted in the desired political or economic objectives, their effectiveness as a foreign policy tool can also be called into question. Sanctions can be imposed to express disfavor with a country's political or economic policies, allowing one country to take action against another short of going to war. Yet, in the case of sanctions imposed against Cuba and Iraq, studies have shown that is it not the political leaders of the country who suffer, it is the general population.