HTML _ RL30108 - Economic Sanctions and U.S. Agricultural Exports
20-Mar-2000; Remy Jurenas; 11 p.

Abstract: Various statutes and regulations authorize the President to restrict or prohibit trade with targeted countries for national security or foreign policy reasons. The exercise of these authorities has resulted in restrictions or prohibitions at times being placed on the export of U.S. agricultural commodities and products. The U.S. government currently restricts exports of agricultural products as part of across-the-board economic sanctions imposed on Cuba and Iraq. Exceptions are made for humanitarian reasons, allowing food to be sold or donated to these two countries. The Clinton Administration moved last year to lift prohibitions on U.S. commercial sales of most agricultural commodities and food products to four other countries. The U.S. Department of Treasury on July 27, 1999, issued export licensing regulations to implement the Administration's policy decision to exempt sales of food and medical products from future, and some current, sanctions. This will allow sales that meet specified conditions and safeguards to be made to Iran, Libya, and Sudan. Since this policy went into effect, Treasury has approved licenses allowing for U.S. exports of corn to Iran and durum wheat to Libya. A separate September 17th White House announcement on easing sanctions against North Korea likely means that sales of agricultural products will be allowed under a less restrictive licensing policy. A USDA analysis estimates that U.S. economic sanctions on these countries ¨reduced U.S. agricultural exports by roughly $500 million in 1996.¨ The likely impacts, according to a CRS analysis presented in this report, suggest that these ¨lost export sales¨ may have in 1996 reduced farm income by $150 million. Those in favor of changing U.S. sanctions policy to exempt agricultural exports argue that restricting exports only hurts U.S. farmers and business, undermines our reputation as a ¨reliable supplier,¨ and does not change targeted countries' behavior. Those opposed to change argue that current law gives the President flexibility to permit food to be shipped for humanitarian reasons and that U.S. food, if sold, could be misused by foreign governments and/or not made available to those in need. Because of concern about declining farm exports, Congress in recent years has focused increased attention on exempting food from U.S. sanctions. In 1998, the 105th Congress overrode nonproliferation sanctions to permit USDA financing of U.S. wheat sales to Pakistan (P.L. 105-194). In 1999, the House and Senate approved bills that differ in their approach to sanctions. H.R. 17 (adopted by the House June 15, 1999) lays out congressional procedures to approve or disapprove a future embargo on agricultural products that is not part of an embargo on all products to a country. Senate action proposed changes to current as well as future embargoes. It approved an amendment to its FY2000 agriculture appropriations bill (S. 1233) exempting commercial sales of agricultural and medical products from all current U.S. unilateral sanctions, and from future unilateral sanctions proposed by the President, unless Congress first approves. This provision was dropped in conference because of objections by those opposing any commercial sales to Cuba and because it represented a significant change in U.S. sanctions policy. The Senate plans to consider H.R. 17 during the week of March 20th. The Senate Foreign Relations Committee also reportedly will include food exemption language similar to last year's floor amendment in a foreign trade and assistance bill to be considered on March 23. [read report]

Topics: International, Economics & Trade, Agriculture

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