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Economic sanctions

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Economic sanctions are domestic penalties applied by one country (or group of countries) on another for a variety of reasons. Economic sanctions include, but are not limited to, tariffs, trade barriers, import duties, and import or export quotas. The most famous example of an economic sanction is the fifty-year-old United States embargo against Cuba.

Economic sanctions are not always imposed because of economic circumstances. For example, the United States has imposed economic sanctions against Iran for years, on the basis that the Iranian government sponsors groups who work against US interests.

The United Nations imposed stringent economic sanctions upon Iraq after the first Gulf War, and these were maintained partly as an attempt to make the Iraqi government co-operate with the UN weapons inspectors' monitoring of Iraq's weapons and weapons programs. These sanctions were unusually stringent in that very little in the way of trade goods were allowed into or out of Iraq during the sanction period [1]). The sanctions were not lifted until May 2003, after the government of Iraqi president Saddam Hussein was overthrown.

There is a United Nations sanctions regime imposed by UN Security Council Resolution 1267 in 1999 against all Al-Qaida- and Taliban-associated individuals which has undergone years of modification by a dozen UN Security Council Resolutions. The cornerstone of the regime is a consolidated list of persons maintained by the Security Council. All nations are obliged to freeze bank accounts and other financial instruments controlled by, or used for the benefit of, anyone on the list.

Trade sanctions

Trade sanctions are trade penalties imposed by a country or group of countries on another country or group of countries. Typically the sanctions take the form of import tariffs (duties), licensing schemes or other administrative hurdles. They tend to arise in the context of an unresolved trade or policy dispute, such as a disagreement about the fairness of some policy affecting international trade (imports or exports).

For instance, one country may conclude that another is unfairly subsidizing exports of one or more products, or unfairly protecting some sector from competition (from imported goods or services). The first country may retaliate by imposing import duties, or some other sanction, on goods or services from the second.

Politics of trade sanctions

Trade sanctions are frequently retaliatory in nature. For example, in 2002 the United States placed import tariffs on steel in an effort to protect its industry from more efficient foreign producers such as China and Russia. The World Trade Organisation (WTO) ruled that these tariffs were illegal. The European Union threatened retaliatory tariffs on a range of US goods, forcing the US government to remove the steel tariffs in early 2004. Economic sanctions frequently result in trade wars. They can be a coercive measure for achieving particular policy goals related to trade or for humanitarian violations; for example the United States sanctions against Brazil over patent law in the late 1980s,[citation needed] or the European Union's sanctions against Burma (Myanmar) based on lack of democracy and human rights infringements.[1]

Effectiveness of Economic Sanctions

Economic sanctions are used as a tool of foreign policy by many governments. Economic sanctions are usually imposed by a larger country upon a smaller country for one of the two reasons- either the latter is a threat to the security of the former nation or that country treats its citizens unfairly. By far regime change is the most frequent foreign policy objective of economic sanctions.[2]However, there is a controversy over the effectiveness of economic sanctions in their ability to achieve the stated purpose. Haufbauer et al. claimed that in their studies 34 percent of the cases were successful [3] When Robert A. Pape reexamined their study, he claimed that only five of their forty so-called "successes" stood out, dropping their success rate to 4%.[4]

Cost Benefit Analysis of Economic Sanctions

Under many circumstances, economic sanctions are used as an alternative weapon instead of going to war to achieve the desired outcome. War is expensive but economic sanction is not cheap either. It also affects the economy of the imposing country to some degree. If import restrictions were made, the consumers in the imposing country would have fewer choices of goods. If export restrictions were made or sanction prohibited businesses in the imposing country from doing business with the target country, the imposing country could lose markets and investment opportunities to competing countries.[5] Accurate cost benefit analysis is difficult to make in most of the cases in terms of how the sanctions also affect the economy of the imposing country.

Recent historical examples of trade sanctions

There have been many examples of such disputes and associated sanctions. For example, US steel companies requested, and were at times granted, protection from steel imports that they claimed enjoyed an unfair advantage due to the economic policy of the steel exporting country. At times it was asserted that the exporting company was dumping steel overseas (in the USA) at below cost. See United States steel tariff 2002

Again, as the Asian economies became more and more effective competitors on the international stage, achieved largely via export-led growth, many countries imposed import tariffs and other measures aimed at protecting domestic industries. The intention was not always permanent protection (of the threatened industry) but sometimes an attempt to give the domestic firms time to adjust to a changed competitive context.[citation needed]

The disagreements that occur are not only bi-lateral and can be fundamental to the working of the global economy and e.g. to the alleviation of global poverty. As of September, 2003, World Trade Organization talks in Cancún broke down between the advanced nations and the developing world. Unresolved issues include the advanced nations subsidizing their agricultural sectors to the detriment of the developing world, which might otherwise sell more agricultural produce into e.g. the USA and Europe.

In mid-March 2010, Brazil introduced new sanctions against the US. These sanctions were on the basis that the US government was paying cotton farmers for their products; an action not allowed by the WTO. The sanctions cover cotton, as well as other products such as cars, chewing gum, fruit, and vegetable products.[6] The WTO is currently supervising talks between the states to remove the sanctions.

North Korea has been the subject of international sanctions since the Korean War, which were eased under the Sunshine Policy and by U.S. President Bill Clinton,[7] but they were tightened again in 2010.[8]

Notes

  1. ^ Howse, Robert L. and Genser, Jared M. (2008) "Are EU Trade Sanctions on Burma Compatible with WTO Law?" Michigan Journal of International Law 29(2): pp. 165-196
  2. ^ Economic Sanctions Reconsidered, 3rd Edition, Hufbauer et al. page 67
  3. ^ Economic Sanctions Reconsidered, 3rd Edition, Hufbauer et al. page 159
  4. ^ Why economic sanctions still do not work, Robert A. Pape , page 66
  5. ^ Griswold, Daniel. "Going Alone on Economic Sanctions Hurts U.S. More than Foes." November 27, 2000. http://www.cato.org/pub_display.php?pub_id=10888 (accessed April 28, 2011).
  6. ^ Stanglin, Doug. "Brazil slaps trade sanctions on U.S. to retaliate for subsidies to cotton farmers." March 9, 2010. Retrieved on March 14, 2010.
  7. ^ http://www.globalpolicy.org/component/content/article/202/42450.html
  8. ^ Template:Vi Hoa Kỳ tăng thêm biện pháp trừng phạt Bắc Hàn

See also

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