Newspaper article The Christian Science Monitor

US Rethinks Trade Sanctions Policy Using Trade Penalties against China and Other Countries May Hurt US Business Most of All

Newspaper article The Christian Science Monitor

US Rethinks Trade Sanctions Policy Using Trade Penalties against China and Other Countries May Hurt US Business Most of All

Article excerpt

THIS week Joel Johnson, vice president of international operations at the Aerospace Industries Association, heard disturbing news from State Department contacts about their newest strategy to press for progress in China's human rights.

Aware that revoking most-favored-nation (MFN) trading status could hurt US exporters and consumers as much as the Chinese and cause a backlash from the US business community, the Clinton administration is considering other ways to reach its objectives. The latest recommendation, to withdraw US Export-Import Bank financing for China-bound US exports, prompts Mr. Johnson to say: "That would jeopardize the couple of billion dollars' worth of aerospace deals we do a year there and put 40,000 jobs on the line."

Washington's trouble in developing a strategy to deal with Beijing is just one of many vexing problems it has with foreign governments considered threats to US national security, recalcitrant trade partners, or both. The administration has no common "sanctions" approach toward these nations. In fact, issuing bellicose statements one day and conciliatory ones the next, US officials have shown themselves divided in their approach toward any given country.

In recent days, they have sent mixed messages to North Korea, whose nuclear program profoundly concerns leaders here and abroad. Defense Secretary William Perry warned last week the US is prepared to block North Korea's development of a nuclear arsenal militarily. At a town meeting on Tuesday, President Clinton called for stiff economic sanctions against Pyongyang and cautioned against escalating tensions by "talking tough."

Japan, South Korea, and Russia - central to Washington's strategy to squeeze North Korea - have expressed discomfort with Washington's admonishments and have hinted they will pursue dialogue before backing Pyongyang into a corner.

If US efforts to further isolate North Korea economically show how difficult it is to draw on international support for sanctions against nations who pose security concerns, Washington's search for allies to impose sanctions against countries based on economic grounds - such as a multilateral response to Japan's closed markets - is practically hopeless.

Johnson, who has worked as a senior official on trade issues at the State Department, and at the Senate Foreign Relations Committee, says the more narrow the measure, the less likely it is to fail. He refers to Mr. Clinton's aim at Japan last month with his revivial of the "Super 301" section of the 1988 trade law that unilaterally imposes sanctions on nations considered to be obstructing free trade.

Designed to target some industries and sectors for retaliatory action, Super 301 effects some change in Japan's behavior, he says. "If we didn't do anything, they'd ignore us entirely." While some observers worry a trade war will ensue, Johnson says it's easier for targets of sanctions to respond to focused demands, adding that "asking a government to commit suicide {by making concessions beyond what constituents will tolerate} to fundamentally change their political system" is doomed to fail. …

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