Sanctions vs. trade: a U.S. contradiction

By William Pomeroy

The moves in the U.S. Senate for a relaxation of the trade embargo on exports to Cuba, specifically in regard to the export by U.S. companies of food and pharmaceuticals, reflect the growing discontent in imperialist ranks over the boomerang effect of U.S. sanctions policy.

That fact was underscored by the visit to Cuba in mid-August by two U.S. senators representing farmer interests in the Dakotas, Senators Tom Daschle and Byron Dorgan, whose lengthy talk with Fidel Castro clearly had to do with lifting the U.S. ban on export of farm-produced goods to Cuba.

On an accelerating scale in recent decades, sanctions involving total trade embargoes or punitive tariff or fining measures have been ranked beside bombing as a weapon in imposing an imperialistic U.S. foreign policy.

As ever, that policy is chiefly designed to promote the interests of U.S. corporations engaged in trade and investment abroad. A point has been reached, however, where the aggressive use of sanctions is having the contradictory effect of damaging U.S. trade.

Varied forms of sanctions are in effect, ranging from wholesale sanctions against entire countries (Iran, Iraq, Libya, North Korea, Yugoslavia, besides Cuba), aimed at overturning governments, to lists of industries, to acts against individual foreign companies (such as companies dealing with Cuba that can be penalized in U.S. courts for disregarding the bans under the Helms-Burton Act).

By now the impact of a shoot-from-the-hip sanctions policy is causing an estimated loss of $15 to $20 billion of exports, and U.S. business groups have been organizing against it. The growth of opposition to the sanctions policy, extending to steps toward relaxing the embargo against Cuba, comes unsurprisingly at a time when the U.S. is experiencing one of the worst trade deficits in its history. Adding to this is the threat of a major trade war with the countries of the European Union that is aggravated by the use of sanctions.

One of the aspects of sanctions that arouses much of the bitterness against it that has mounted abroad is the way in which the U.S. has used its superpower position to employ the World Trade Organization as its instrument. In two major instances in the recent period the U.S. has resorted to the WTO to impose its sanctions and demands connected with them.

In what was known as the "banana war," U.S. fruit companies producing and exporting bananas to Europe from their plantations in Central American and Ecuador demanded a "free" share of the banana market in Europe, which had long enabled preferential entry for banana producers in the Caribbean islands under the Lome Convention that Europe maintains with developing countries.

Charging trade discrimination, the Clinton administration backed the fruit companies (which produce not a banana in the U.S. itself but make large contributions to Democratic Party funds) and imposed retaliatory sanctions in the form of 100 percent tariffs, amounting initially to a quarter of a billion dollars, on a wide range of industries in Europe that export to the U.S., driving some of the smaller ones to the wall.

This issue was taken to the World Trade Organization, which promptly ruled in the U.S.' favor, supporting its sanctions and U.S. demands on the European market and merely somewhat reducing the amount of cost. The ruling caused deep resentment in Europe and despair in the Caribbean where it will cause impoverishment for economies dependent on the single banana crop.

Before the banana war has ended (the WTO ruling is being appealed by Caribbean victims) a more acrimonious trade battle has developed over the export to Europe of U.S. beef that has been injected with a hormone, which European scientists and officials believe to be a possible cancer threat and insufficiently tested. The European Commission has banned U.S. hormone-treated beef pending adequate testing

The reaction of the Clinton administration to this has been more sanctions, another punitive 100 percent tariff on a list of mainly small agrarian producers, of Roquefort cheese, foie gras, truffles, beef and pork products, canned tomatoes, mustard, which have struggled for a place in the U.S. market and now face disaster. On July 22 the WTO approved the U.S. imposition of sanctions in this case, amounting to $116.8 million.

This time the European producer victims are not taking it lying down. Angry French farmers who are affected, especially those belonging to the militant Confederation Paysanne, have staged fierce demonstrations against premises of U.S. businesses. In the town of Millau in southern France, a farmer's protest demonstration turned into an attack on a McDonald's restaurant, wrecking it. The ubiquitous and high-profile McDonald's became a target across France, angry farmers dumping loads of manure in front of them.

Resentment against U.S. sanctions policy is no doubt figuring in a growing official tendency to take steps against activities of major U.S. companies. Officials of the European Commission raided the offices of the Coca-Cola corporation in Germany, Austria and Denmark for evidence of unethical commercial practices in squeezing rival drinks off shop shelves. Monsanto was censured by the advertising standard authority for making false claims for its genetically modified (GM) foods in newspaper ads.

The build-up of anger against U.S. sanctions is expected to rise far higher as the issue of U.S. GM food exports are increasingly banned in a Europe where trade is becoming a political issue.