At a hearing today of the House Agriculture Committee, Members led by Chairman Larry Combest (R-TX) urged the Clinton Administration to move quickly on its policy of removing agricultural products from unilateral sanctions and to expand this policy to allow credit guarantees and other export assistance.
"The use of economic sanctions is a subject that has captured the attention of all of us who are interested in the prosperity of our farmers and ranchers," Combest said. "We all can agree with the President's statement that food should not be used as a tool of foreign policy and I especially welcome the Administration's April 28th announcement regarding lifting of certain economic sanctions."
The United States prohibits or restricts exports of agricultural products as part of across-the-board economic sanctions currently imposed on six countries: Cuba, Iran, Iraq, Libya, North Korea and Sudan. A U.S. Department of Agriculture (USDA) analysis estimates that these sanctions reduced U.S. agricultural exports by roughly $500 million in 1996. Moreover, the Congressional Research Service has determined that, in the same year, farm income was reduced by approximately $150 million, overall economic activity decreased by $1.2 billion, and 7,600 jobs were lost in the United States.
"Food should not, under most circumstances, be used as a weapon," Combest said. "Such a policy ends up harming our farmers and ranchers, and all involved in agriculture production, processing and distribution. There are three things that can happen when agricultural sanctions go into effect and none of them are good. Exports go down, prices go down, and farmers and ranchers lose their share of the world market."
"The use of unilateral sanctions to prohibit exports of U.S. agricultural products not only undermines our reputation as a reliable supplier to our customers, it also creates opportunities for competitors such as Canada, the EU and Argentina to gain long term market share," said Ranking Member Charlie Stenholm (D-TX).
On April 28, 1999, President Clinton announced that the Administration would exempt commercial sales of food, medicine and equipment from the unilateral economic sanctions, except in extraordinary circumstances. In addition, the new policy will extend to existing unilateral sanctions permitting case-by-case review of specific proposals for commercial sales. However, the Administration does not support the use of U.S. government funding, credit guarantees or other support in assisting sales of commodities to countries currently embargoed.
"The Administration has an opportunity to open markets for U.S. agriculture by quickly issuing the regulations to implement the April 28th announcement," Combest said. "According to USDA, the impact of the sanctions currently in place is lost agricultural sales of at least $500 million per year. I urge the Administration to issue the regulations as soon as possible and in a form that can implemented quickly by U.S. agricultural exporters."