By Philip Shenon
April 29, 1999
Washington -- The Clinton Administration announced Wednesday that it had decided to ease its sanctions policy to permit the sale of food and medical supplies to Iran, Libya, Sudan and other nations accused of supporting terrorists. The new policy, which had long been sought by farm-state lawmakers and lobbyists for several large corporations, will make a general exemption for food and medicine whenever trade sanctions are put on countries considered adversaries of the United States.
The shift would not directly affect trade sanctions against Cuba, Iraq and North Korea, in part because American companies are already permitted to carry out some trade in food, medicine and other supplies with those countries. Stuart E. Eizenstat, Undersecretary of State for Business and Economic Affairs, said that President Clinton had approved the policy after a two-year review concluded that the sale of food and medicine "doesn't encourage a nation's military capability or its ability to support terrorism."
In fact, he told reporters, a ban on such sales can backfire by eroding support for American foreign policy, by depriving American companies and farmers of the chance to sell their goods and by harming innocent civilians abroad who are deprived of needed food and medicine. Joe Lockhart, the White House spokesman, said President Clinton had decided that "food should not be used as a tool of foreign policy, except under the most compelling circumstances."
The policy shift reflects a growing sense, in the corridors of the White House and on Capitol Hill, that sanctions are not an effective way to make foreign policy and punish rogue states. Business leaders have long argued that economic sanctions rarely produce changes in foreign governments and instead often taints American corporations as unreliable suppliers.
Human rights groups disagree, insisting that economic sanctions have been a factor in the collapse of pariah governments, notably the apartheid Government of South Africa. Cargill, Farmland Industries and a number of other large agricultural and commodity-trading companies had lobbied intensively for the policy change.
USA Engage, a powerful coalition of more than 670 companies that has sought an easing of American trade sanctions, welcomed the Administration's announcement. "This is good news for American agriculture, it's good news for U.S. producers of farm equipment and it's an outstanding development for American foreign policy," said Bill Lane, Washington director of Caterpillar Inc. and the coalition's chairman.
Clinton Administration officials insisted that Wednesday's move was not meant to be a gesture of friendship toward Iran, but they acknowledged that the action would doubtless encourage improved ties between the United States and the Government of President Mohammad Khatami, who is perceived to be a relative moderate among Iranian leaders.
The policy shift comes only two weeks after President Clinton made strikingly conciliatory comments about Iran during a public appearance in the White House in which he saluted that nation's "enormous geopolitical importance over time" and said that it had "been the subject of quite a lot of abuse from various Western nations."
An American exporter, Niki Trading Company, recently sought a special export license from the Treasury Department to sell millions of tons of food products, mostly grain, for about $500 million, to Iran, a deal that now seems likely to be approved. Administration officials had seen the deal as a promising line of contact with Iran after two decades of bitter hostility following the 1979 Iranian revolution.
While the State Department labeled Iran last year as the "the most active state sponsor of terrorism," the Administration is hopeful that easing the sanctions might help give Khatami leverage that could allow him to rein in rival factions of the Government that support anti-American terrorist groups.
Under the policy shift, the sale of food, medicine and other "human necessities" would be included in trade sanctions only if a nation is in armed conflict with the United States or is diverting food and medical supplies for military purposes. Wednesday's move by the Administration would not affect trade with Cuba, which is limited principally by Congressional sanctions.
Eizenstat noted that the sale of medicine and medical supplies to Cuba was already allowed under legislation approved in 1992, and the regulated sale of food, pesticides and related items was permitted under a policy shift announced in January. American companies are allowed to sell food, medicine and other goods to Iraq under the so-called oil-for-food program overseen by the United Nations.
American companies are already permitted to trade food, medicine and other goods to North Korea under a deal brokered by the State Department to end that country's program to develop nuclear weapons. The United States Government has provided tens of thousands of tons of donated food to North Korea as a result of the widespread famine in that country.
Few of the countries affected by today's decision offer large markets to the United States. With a population of nearly 70 million people and its oil riches, Iran is a notable exception. The official Iranian news agency reported this week that more than 15 percent of Iran's food was imported last year, worth about $3 billion. It imported about 3.8 million tons of grain in 1998.
Iran had been eager to resume trade with the United States. In August, it lodged an official complaint with the United Nations, asserting that the American sanctions had created a "scarcity of essential goods needed for the improvement of the nutritional and health-care standards of the Iranian people." The decision to permit trade in food and medicine could also ease tension somewhat with Libya.
A variety of international economic sanctions on Libya were lifted earlier this month when two suspects accused of bombing Pan Am Flight 103 in 1988 were handed over to prosecutors in the Netherlands. Separate American trade sanctions remain in place.
