I want to begin by thanking the members of this Commission for the opportunity to testify on this important subject. Even more, I want to applaud them for devoting the time and energy to the consideration of what has become an increasingly common but rarely examined tool of American foreign policy.
It is difficult to exaggerate the role of economic sanctions. The United States now maintains economic sanctions against literally dozens of countries. What is critical, however, is not just the frequency with which economic sanctions are used but their importance. Increasingly, sanctions define or dominate a number of significant relationships and policies.
Sanctions—best defined as the introduction of penalties aimed at a state or other entity for the purpose of altering its behavior—are employed for a wide range of foreign policy purposes and take many forms. But whatever the purpose or form of a particular sanction, the reality is that economic sanctions are unlikely to achieve the desired results if the aims are large or time is short. Sanctions-even when they were comprehensive and enjoyed almost universal international backing for nearly six months—failed to get Saddam Hussein to withdraw from Kuwait. In the end, it took nothing less than Operation Desert Storm. Nor could sanctions dissuade Serbia and Bosnia’s Serbs to call off their military aggression for several years.
Nevertheless, sanctions can be of value. Under the right circumstances sanctions can achieve (or help to achieve) various foreign policy goals ranging from the modest to the fairly significant. Sanctions introduced against Iraq in the wake of the Gulf War increased Iraqi compliance with resolutions calling for the elimination of its weapons of mass destruction. Such sanctions also diminished Iraq’s ability to import weapons and weapons-related technology of any sort. In the former Yugoslavia, sanctions were one factor that contributed to the Serbian decision to accept the Dayton agreement.
Both the Iraq and Yugoslav experiences were largely multilateral. Unilateral sanctions are rarely effective. In a global economy, unilateral sanctions tend to impose greater costs on American firms than on the target who can usually find substitute sources of supply and financing.
This is not to argue that unilateral sanctions never have an impact. Unilateral sanctions did penalize Haiti, and continue to do the same with Cuba. Sanctions mandated by the Pressler amendment have hurt Pakistan, which was receiving substantial U.S. military and economic aid. Such cases are the exception, though; as a rule, unilateral sanctions are little more than statements or expressions of opposition except in those instances in which the tie between the United States and the target is so extensive that the latter cannot adjust to an American cut-off.
The problem is that garnering international support for particular sanctions is often extremely difficult. Prospects for succeeding in bringing others on board tend to reflect a range of factors, including their commercial stakes, policy preferences, and the availability of funds to compensate lost revenues. Sanctions tend to work best when international political consensus exists as to the wisdom of employing sanctions and non-targeted countries, who must bear an economic cost as a result of the sanctions, are compensated. In most instances, the preference of other governments is for no or minimal sanctions. Other countries tend to place a higher value on commercial interaction than the United States and are less willing to forfeit it voluntarily. In addition, the notion that economic interaction is desirable because it promotes more open political and economic systems is an argument that normally has more resonance in other capitals.
Such thinking makes achieving what is desirable, namely multilateral support for sanctions, less feasible than the United States tends to want. It usually takes something truly egregious—Saddam’s invasion and occupation of Kuwait, incontrovertible support of terrorism such as in the Lockerbie case—to overcome this anti-sanctions bias. And even in the case of Iraq, generous compensation for affected states, including Egypt and Turkey, was a prerequisite for these government’s and others sustaining support for sanctions.
Trying to compel others to join a sanctions effort by threatening or introducing secondary sanctions against those third parties unwilling to sanction the target—as was done in the cases of Cuba, Iran and Libya—can cause serious harm to a variety of U.S. foreign policy interests. This approach has had some deterrent effect on the willingness of certain individuals and firms to enter into proscribed business activities, but at a significant political price. It has increased anti-American sentiment, stimulated challenges that had the potential to jeopardize the future of the World Trade Organization, distracted attention from the provocative behavior of the target governments, and made Europeans less likely to work with us in shaping policies to contend with post-Cold War challenges.
Unilateral sanctions can be expensive for American business. There is a tendency to overlook or underestimate the direct cost of sanctions, perhaps because the costs of intervening with sanctions (unlike the costs of military intervention) do not show up in U.S. government budget tables. Sanctions, do, however, affect the economy by reducing revenues of U.S. companies and individuals. Moreover, even this cost is difficult to measure because it needs to reflect not simply lost sales but also forfeited opportunities stemming from governments and overseas companies electing not to do business with the United States for fear that sanctions might be introduced and thereby interrupt the supply of spare parts or otherwise complicate or prohibit normal commercial relations.
What, then, needs to be done? Multilateral support for economic sanctions should normally constitute a prerequisite for the introduction of economic sanctions by the United States. Such support need not be simultaneous, but it should be all but certain and likely to follow with little delay. Unilateral sanctions should be avoided except in those circumstances that the United States is in a unique situation to derive leverage based on the economic relationship with the target. Implementing this guideline will require intense, often high-level diplomatic effort and even then may not succeed. If this is so, then the task for policymakers is to compare what can be achieved by weaker sanctions as opposed to some alternative.
One instrument that can increase compliance is the provision of assistance to third parties in order to offset the economic cost of implementing sanctions. Arrangements to compensate countries whose support for the sanctions is central thus can be critical. This was the case with the Iraq sanctions; it is possible that sanctions against Haiti might have proved stronger had the Dominican Republic been more cooperative. Greater use should be made of Article 50 of the UN Charter, which sets forth a means by which third party states hurt by sanctions aimed at another state can approach the Security Council for redress. In addition, Congress should consider establishing a fund for this purpose within the U.S. foreign assistance budget.
Sanctions should focus to the extent possible on those responsible for the offending behavior or on penalizing countries in the realm that stimulated sanctions in the first place. The are several reasons for a response that focuses on the unwanted behavior: it helps avoid jeopardizing other interests and the entire bilateral relationship with the target over one area of disagreement; it causes less collateral damage to innocents; and it makes it less difficult to garner multinational backing. Recent legislation aimed at discouraging non-American entities from contributing to Iran’s missile program is a step in the right direction.
Sanctions tend to be a blunt instrument that often produce unintended and undesirable consequences. Humanitarian exceptions should be included as part of any comprehensive sanction, both for moral reasons and because allowing a target to import food and medicine should make it easier to generate and sustain domestic and international support.
All sanctions embedded in legislation should provide for presidential discretion in the form of a waiver authority. Such discretion would allow the President to suspend or terminate a sanction if he judges it is in the interests of national security to do so. The rheostat would replace the lightswitch as the operative metaphor. Such flexibility and latitude is needed if relationships are not to become hostage to one interest and if the executive is to have the flexibility needed to explore whether the introduction of limited incentives can bring about a desired policy end. The benefits of this latitude outweigh any diminution of the deterrent power inherent in automatic sanctions. The comprehensive sanctions mandated by the Glenn amendment and introduced against India and Pakistan in the wake of their May 1998 nuclear tests is a case in point. Congress should act quickly to provide the President the authority to waive those sanctions if he determines that by so doing he would help stabilize South Asia or promote U.S. national security interests in the region and beyond. Indeed, such waiver authority—possibly including a mechanism by which Congress could block a waiver through a two-thirds vote of each chamber—should become a component of any sanction.
Policymakers should prepare and send to Congress a policy statement not unlike the reports prepared and forwarded under the War Powers Act before or soon after a sanction is put in place. Such “impact” statements should be clear as to the purpose of the sanction; the required legal and/or political authority; the expected impact on the target, including possible retaliatory steps; the probable humanitarian consequences and what is being done to minimize them; the expected costs to the United States; prospects for enforcing the sanction; the degree of international support or opposition that can be anticipated; and an exit strategy, i.e., the criteria for lifting the sanction. In addition, policymakers should be able to explain why a particular sanction was selected as opposed to other sanctions or other policies altogether. If need be, portions of this report could be classified secret if this were required to avoid providing information that would be useful to the target. Any sanction initiated by Congress should be approved only after hearings in the relevant committees carefully considered the matter, thereby allowing members being asked to vote to refer to a report accompanying the proposed legislation that addresses these same questions. Similar reports measuring the actual costs and benefits of sanctions should be required thereafter on an annual basis. Congress should press the intelligence community to devote additional resources to this subject so that policymakers receive greater information as well as assessment highlighting the potential as well as actual impact of particular sanctions.
Reports along these lines would introduce much needed rigor into the sanctions decision-making process. Still, there is no quick fix to the sanctions problem. Legislation that would introduce greater scrutiny of sanctions before and after their introduction is desirable. Greater executive activism and discretion would also help. The Clinton administration can be faulted for its failure to veto laws calling for secondary sanctions and for its haste in implementing sanctions triggered by India’s and Pakistan’s nuclear tests.
This said, the challenge goes beyond improving sanctions, something that will tend to make them narrower and less unilateral. The more fundamental question is one of the selection of the most appropriate foreign policy tool to deal with a particular challenge. Sanctions of any sort must be weighed against the likely costs and benefits of military action, covert programs, and both public and private diplomacy.
Sometimes it will be better to use military force. This was the lesson of Desert Storm and Bosnia—and may yet prove to be the lesson of Kosovo. Cuba is also worth considering in this context. Rather than tighten sanctions (which increased the misery of the Cuban people) and go along with Congress’s introduction of secondary sanctions against U.S. allies, the Clinton Administration might have been wiser to launch a cruise missile salvo to take out the MIGs that shot down the unarmed plane flown by Cuban exiles.
In other instances, focused sanctions appear attractive. A more appropriate response to India’s and Pakistan’s nuclear tests would have been export controls designed to slow missile and nuclear bomb development and deployment. With Haiti, narrow sanctions aimed at the illegitimate leadership would not have triggered the human exodus that pressured the Administration into an armed intervention that could have proved extremely costly. Differences with Russia and China over their technology and weapons exports would best be dealt with by narrow sanctions. This said, sanctions will not be able to carry the full burden on non-proliferation policy, and policy tools ranging from preventive attacks on rogue state facilities, a stronger IAEA, and more robust defenses will need to be considered. The principal alternative to economic sanctions, however, is best described as conditional engagement, i.e., a mix of narrow sanctions and political and economic interactions that are limited and made conditional on specified behavioral changes. A package of incentives tied to specific actions has helped manage North Korea’s nuclear ambitions. Such a “road map” approach also might prove effective with Cuba and with Iran.
What these examples make clear is that there is no tool that is always preferable to sanctions, any more than sanctions themselves offer a universal answer. But the trend is clear. While there will be those instances in which sanctions can help, either alone or more likely in conjunction with other tools, recent history strongly suggests that the potential of sanctions to contribute to American foreign policy will be modest—and that asking more of them than that promises to be counter-productive.