Pakistan Embargo Lifted

Jul 16, 1998

WASHINGTON, DC — Following the reinstatement of U.S. Department of Agriculture (USDA) Credit Guarantee Programs, Congressman Bob Smith, Chairman of the House Agriculture Committee, today announced that Pakistan has purchased 300,000 tons of U.S. Wheat in the July 15th tender.

On July 14th, the President signed the Agriculture Export Relief Act (S. 2282), legislation with language introduced by Chairman Smith providing a one-year exemption to the Pakistan-India embargo for agricultural products and USDA financial assistance.

"I couldn't be happier to see all our hard work pay off. My colleagues and I have worked tirelessly to defeat these sanctions and it's good to see our farmers won't be subjected to the devastating losses that would have resulted if they were left in place," Smith said.

"For American farmers and ranchers, the export credit guarantee program facilitates sales that are an essential part of their livelihood," said Ranking Committee Member Charlie Stenholm. "Abandoning export credit guarantee programs, one of the few promotion tools left to agricultural producers, is an ineffective means of achieving our foreign policy goals. I am encouraged that, with enactment of this legislation, we move a step closer to a more equitable and effective policy on sanctions."

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 was 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, Chairman Smith and Ranking Committee Member Charlie Stenholm (D-TX) 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 effectively led to an embargo on one of the largest wheat markets for American farmers.

Since then, numerous legislative efforts were introduced to lift these sanctions. Among these was a provision in the House-passed Agriculture Appropriations Act, sponsored by George Nethercutt (R-WA), to permanently exempt agricultural credits from sanctions. On Tuesday, Chairman Smith introduced the Agriculture Export Relief Act (H.R. 4195), which was then substituted for the provisions in Senator Mitch McConnell's (R-KY) bill S. 2282. This final legislation, which was signed into law Tuesday night, provides a one-year exemption for agricultural commodities and financial assistance and made Pakistan's recent purchase of 300,000 tons U.S. wheat possible.

Smith represents Oregon's Second Congressional District — which includes most of eastern, central, and southern Oregon — in the U.S. House of Representatives. Stenholm represents Texas' Seventeenth Congressional District, a sprawling agricultural district in west central Texas.