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The Impact of Trade Sanctions on U.S. Agriculture
September 20, 2000
While more than a year has passed since President Clinton announced that the United States will exempt commercial sales of food, medicine, and medical equipment from unilateral economic sanctions, misunderstandings still exist on how sanctions affect U.S. farm exports. The following facts may help clear up these misunderstandings.
On April 28, 1999, President
Clinton announced that the United States would exempt commercial sales of
agricultural commodities and products, as well as medical equipment, from
future unilateral Executive Branch economic sanctions regimes, unless he
determines that our national interest requires otherwise. The Executive
Branch has extended this policy to existing sanctions regimes by regulation.
Even before the new policy was
announced, the United States prohibited or restricted commercial sales of
agricultural commodities to only six countries: Cuba, Iran, Iraq, Libya,
North Korea, and Sudan. However, even then, conditioned sales of certain
items were permitted under license to Iraq, North Korea, and Cuba. USDA has
estimated that the sanctions against the six countries cost U.S. farmers
about $500 million a year in lost sales–the equivalent of about 1 percent
of U.S. agricultural exports.
Under the new policy,
commercial sales of agricultural commodities are permitted on a case-by-case
basis to Iran, Libya, and Sudan, opening these markets to U.S. farm exports.
In effect, the only market remaining off limits to U.S. exports is Cuba
because of the current statutory prohibition on trade with that country.
This policy change has paid off.
American farmers have exported or contracted to export more than 700,000
tons of corn to Iran, as well as lesser amounts of grain to Libya and Sudan.
The United States believes that
food and medicine should not be used as a tool of foreign policy except
under extraordinary circumstances.
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