Committee Acts to End Agricultural Sanctions

Jun 18, 1998

WASHINGTON, D.C. -- The House Agriculture Committee by voice vote today passed the Selective Embargoes Act (H.R. 3654) after adopting an amendment sponsered by Chairman Bob Smith (R-OR) and ranking member Charlie Stenholm (D-TX) to exempt credit, credit gaurantees, and other financial assistance for the provision of food or agricultural commodities from sanctions under the Arms Export Control Act.

Following the detonation of nuclear devices by Pakistan and India in May, President Clinton called for wide-ranging sanctions as mandated under Section 102 of the Arms Export Control Act. However, there is disagreement within Clinton's cabinet as to whether GSM credits, which are used solely for agricultural exports, are exempt from the sanctions.

On May 29, Smith and Stenholm sent a letter to President Clinton urging him to recognize that Congress intended GSM credit guarantees to be outside the scope of the Arms Export Control Act. The President did not respond to the Chairman's letter and his failure to make a favorable decision regarding this issue has effectively led to an embargo on one of the largest wheat markets for American farmers.

"I strongly believe that Section 102 of the Arms Export Control Act does not apply to USDA credit guarantee programs or other USDA programs related to food or agricultural commodities. Nevertheless, I have come to the conclusion that the Committee must act because of the uncertainty placed on the U.S. wheat market," Smith said.

"My amendment clarifies that USDA credit, credit guarantees, or other financial assistance for the purchase or provision of food or other agricultural commodities are not included in the sanctions provided for in Section 102 of the Arms Export Control Act," Smith said.

"Today's Committee action sends forward to the House two important measures to open up markets to U.S. producers," said Stenholm, "I look forward to working with Chairman Smith on the larger issues of Fast Track, IMF funding, and MFN for China."

"I am pleased that the Assistant to the President for National Security Affairs has indicated the Administration's support for this legislative language. I regret that it became necessary to take this action because I believe it was within the authority of the Administration to exclude the vital USDA programs for food and agricultural commodities from these sanctions," Smith said.

H.R. 3654, sponsored by Representative Tom Ewing (R-IL), amends the Agriculture Trade Act of 1978 to require the President to report to Congress if he imposes an agriculture-specific embargo on a foreign country. In addition, the bill provides that if within 100 days of receiving the President's report, a joint resolution is enacted that approves the embargo, the embargo will end on the date determined by the President or one year after the date of enactment of the joint resolution, whichever is earlier. If a joint resolution disapproving the embargo is enacted during that 100 day period, the embargo will terminate at the end of that period.

"The Soviet Grain Embargo remains a stark example of how foreign policy decisions can have disastrous economic consequences at home. Every farmer in my District remembers the hardship and financial losses that the Soviet Grain Embargo triggered in rural America. We owe it to our farmers to make sure that agriculture is not singled out," said Ewing.

Smith represents Oregon's Second Congressional District — which includes most of eastern, southern, and central Oregon. Stenholm represents Texas' Seventeenth Congressional District, a sprawling agricultural district in west central Texas. Ewing represents Illinois' Fifteenth Congressional District -- which includes eleven counties in East-Central Illinois.

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