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US Businesses Fight Unilateral Trad



Subject: US Businesses Fight Unilateral Trade Sanctions

By Donna Smith 

WASHINGTON, Aug 21 (Reuter) - U.S. businesses alarmed by a proliferation of
trade sanctions by federal, state and local governments are pushing for
legislation to make it harder to use commerce as a weapon in international
disagreements. 

Sen. Richard Luger, an Indiana Republican, and Rep. Lee Hamilton, an Indiana
Democrat, plan to introduce a bill next month designed to slow down the trend
toward unilateral trade sanctions or at least force lawmakers to think twice
before imposing them. 

The proposed legislation is still being written, but a business coalition
that has been lobbying for action said it would likely require an analysis on
the economic costs of proposed trade sanctions and that any sanctions expire
after two years. It also would require a presidential report on whether
proposed sanctions would achieve results. 

USA Engage and its 632 business and organization members argue that
unilateral trade sanctions, such as a U.S. ban on nuclear power plant sales
to China, rarely work and often backfire on American interests. 

``Most of these unilateral sanctions are a very definite form of isolation,''
said Frank Kittredge, president of the National Foreign Trade Council, which
was instrumental in organizing USA Engage. ``They isolate the United States
and they isolate the country from all the things that we believe may change a
country's behavior.'' 

The group argues that a ban on nuclear power sales to China has cost
Westinghouse Electric Corp a multibillion contract that supported thousands
of jobs and has done nothing to stop China's power program. 

The group also argues that the United States lost valuable information about
China's nuclear power program because contracts went to competitors in France
and Japan. 

``In this globalized economy, the fact that the United States won't
participate in a market, doesn't mean the activity isn't going to happen,
it's going to happen because any product or service can be provided by any
number of other countries,'' Kittredge said. 

Lane said Cuba is an example of trade sanctions failing to accomplish their
stated purpose. 

``If the goal of the sanctions is to keep the Cuban people poor, there is
certainly the case that they have been successful,'' he said. ``But if the
goal is to get (Cuban leader Fidel) Castro out, they have been a colossal
failure.'' 

The proposed legislation would have no impact on existing sanctions,
including the so-called Helms-Burton law that targets foreign investment in
Cuba and has enraged U.S. trading partners. 

At the state and local level, the group said it was working with lawmakers on
alternative ways to express concerns about countries and is considering a
court challenge on the constitutionality of sanctions imposed by state and
local governments. 

USA Engage is currently tracking some 189 unilateral economic measures
imposed or proposed against 42 countries by U.S. federal, state and local
governments since 1993. 

``In the last two and a half years we have been working full time not in
trying to convince other countries to lower their trade barriers, but to try
to keep the U.S. government from enacting barriers on our exports and
investments,'' said William Lane, a Caterpillar Inc. lobbyist who has been
actively working with the USA Engage coalition. 

A Massachusetts law banning government purchases from companies doing
business in Burma because of human rights abuses is being challenged in the
World Trade Organization by the European Union. Massachusetts is considering
a similar ban against Indonesia. 

One estimate puts the loss of U.S. exports because of trade sanctions at $20
billion. But Lane said the estimate may be conservative and does not take
into account less tangible costs, including making U.S. companies more
unreliable as suppliers and handing over markets to foreign competitors. 

``If the concern was just a few countries in the Mideast and Cuba, those are
not compelling issues,'' Lane said. ``But what we are now seeing is the
targets are Mexico, they are Switzerland, they are Turkey, they are
Indonesia, they are China and these are some of the most important markets
today and they will be even more important in the future.''  

15:10 08-21-97