A Growing Menace to Free Trade: U.S. Sanctions
Free traders are alarmed by the defeat of “fast-track” legislation by House Democrats. The defeated bill would have given the President authority to negotiate trade agreements that the House must vote up or down but not amend. Free traders fear that the fast track’s defeat signals eroding bipartisan support for free trade. But tariffs and quotas – the traditional forms of trade restraints - are less damaging to trade than a new restraint that even Republicans favor.
The new curb on free trade goes by the name of sanctions. Unlike tariffs which protect domestic industries from foreign competition, sanctions undermine the position of our domestic companies in international trade by prohibiting them from doing business in the targeted countries.
For example, in early October, as congressional committees were approving authority for the President to reduce tariff and quota trade barriers, the Office of Foreign Assets Control in the U.S. Treasury Dept. was occupied with implementing new barriers to free trade in the form of regulations to implement the Cohen-Feinstein sanctions against Burma.
The U.S. government does not like Burma’s politics and trying to reform that country by prohibiting U.S. companies from doing business there. The effect is to hamstring American companies in Southeast Asia. As a result of the sanctions, Unocal, a U.S. oil company currently involved in development of offshore Burmese natural gas destined for markets in Thailand, cannot build its business beyond this single project. Within the past month, Texaco Inc., developing another offshore gas field, sold its interest to a British company.
Moving targets.In effect, the sanctions against Burma only hit our global oil companies to the benefit of French and British competitors. Another problem with sanctions is that businesses cannot foresee where Washington will next strike. Indonesia is a possible target, as is any country that offends environmentalists, unions, religious groups, legislators, or the State Dept. Formerly, our multinational corporations worried about the political and economic stability of foreign countries in which they had, or were contemplating, investments. Today risk assessment has a new meaning as our companies try to forecast where Washington will next apply sanctions.
Senator Arlen Specter (R-Pa.) and Representative Frank R.Wolf (R-Va.) are sponsoring legislation that would apply trade sanctions against countries in which there is religious persecution. Many countries might regard religious persecution as a category applicable to the U.S., where school prayer is prohibited and the Branch Davidian religious sect was massacred.
Unions want trade sanctions against countries that offend U.S. labor standards. Human rights groups want sanctions imposed to combat political oppression. Many are not content for the sanctions to apply only to U.S. companies but also want to target every foreign country that trades with the offending nation.
Cola controversy.Even state and local governments and universities are getting into the sanctions business. A dozen cities and the state of Massachusetts have bans against purchases from companies with investments in Burma. Harvard University and other wild-eyed universities turned a soft drink company off their campuses for selling Cola in Burma.
The European Union says that the Massachusetts sanctions against Burma are against the World Trade Organization rules, but the EU itself, along with the U.S. government, tried to prevent the Association of South East Asian Nations from admitting Burma as a full member of the trade group.
Unilateral trade sanctions have grown rapidly and changed in nature. Once a cold-war tool applied to the Soviet Union and Cuba, sanctions became a way to retaliate against countries that refused to open their markets to our products. Today sanctions are an instrument with which U.S. state, local, and federal governments attempt to rule foreign countries and to coerce changes in the political, social, and religious policies of other governments.
This is trade policy in chaos. U.S. markets are supposed to be opened to all comers, but U.S. companies are then prohibited from operating in any foreign country that incurs the wrath of an activist group or government agency. The only certain effect of this policy will be to minimize the presence of U.S. companies in global markets and to weaken them in their domestic markets.
Business Week
Notes
1. “fast-track legislation – законопроект, дающий президенту США право заключать торговые соглашения, которые Конгресс может лишь утверждать или отвергать, но не вносить в него поправки, т.е.процедура ускоренного рассмотрения торговых соглашений в Конгрессе
2. the Office of Foreign Assets Control (in the U.S. Treasury Dept.) – Бюро контроля за иностранными активами
3. free trade – trade without restrictions, such as tariffs, quotas, duties, or sanctions
4. to hamstring – (“подрезать крылья”), здесь: наносить ущерб, ограничивать действия
5. unions– trade unions, or labor unions
6. R-Pa. – a Republican (R) senator representing the state of Pennsylvania (Pa) – сенатор от штата…
R-Va. –a Republican representative of the state of Virginia (Va)–конгрессмен от штата...
7. to get into the sanction business – to begin practicing sanctions
8. wild-eyed – экстремистский
9. World Trade Organization (WTO) – Всемирная торговая организация, создана в 1949 гю как преемник ГАТТ (General Agreement on Tariffs and Trade)
Vocabulary
free trade – свободная торговля: международная торговля без каких-либо ограничений, таких как импортные пошлины, квоты, валютный контроль
trade sanctions – торговые санкции; unilateral sanctions – односторонние санкции
fast-track legislation – поцедура ускоренного рассмотрения торговых соглашений в Конгрессе США
trade agreement– торговое соглашение; to negotiate a trade agreement – вести переговоры о заключении торгового соглашения
trade barriers (curbs on trade)– торговые барьеры: tariff – тариф; quota – квота; duty – пошлина;surcharge – дополнительный налог;sanction – санкция; to reduce tariffs (quotas, duties) – сократить, уменьшить размер тарифов (квот, пошлин)
to implement new barriers to free trade– ввести, установить новые барьеры на пути свободной торговли
to offend– нарушить (закон, обычай); to offend labor standards (environmental standards) – нарушить трудовое законодательство, нормативы по труду (экологические нормы); offending nation (offender) – страна-нарушитель таких законов
to assess risks– оценить риски; risk assessment – оценка рисков
to ban smth– запретить ч-л, ввести запрет на ч-л; a ban against smth – запрет ч-л
to retaliate – предпринять ответные шаги; retaliation– ответные шаги, меры
Exercises
- Pronounce the following:
legislation, legislator, amend, bipartisan, Burma, Burmese, politics, environmentalist, contemplate, applicable, Massachusetts, retaliate, coerce, chaos, wrath.
- Explain the following in English:
a U.S. company cannot build its business beyond this single project; doing business in the targeted countries; eroding bipartisan support for free trade; religious prosecution; offending nation; unilateral trade sanctions.
Against Anti-Dumping