Embargoes Essay

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A nation  or group of nations  can make trade with a particular country or countries difficult or impossible. The main types of trade restrictions  are tariffs, quotas,  embargoes,  licensing  requirements,  standards, and subsidies. A trade embargo is a ban on trade with another  country  (called target  country)  or group  of countries.  This restriction  can be on exports and/or imports, and it can be a total ban on trade or be limited  to  specific products.  An embargo  can  restrict exports of certain products to the target country (i.e., a ban on export of defense articles or services, as in U.S. economic  sanctions  against  China  imposed  as a U.S. response  to the Chinese government’s crackdown against a fledgling democracy movement in the spring of 1989).

Usually, embargoes are declared against a specific country  to  isolate  it, pressure  its government,  and cause it to reverse a specific policy. Embargoes, and other  economic  sanctions,  are widely seen as a less violent alternative  to war and as a tool for coercive foreign policy. U.S. president Woodrow Wilson called sanctions a “peaceful, silent, and deadly remedy” that no nation  can resist. Embargoes  are a tool of economic warfare—the use of economic means against a country in order to weaken its economy and thereby reduce its political and military power.

Embargoes can take shape as either unilateral  or multilateral. In the first case, sanctions are imposed by only one country against a target country. In the second  case, sanctions  are imposed  by more  than one country.  The United  States is the country  that has most frequently applied unilateral economic sanctions after World War II. Well-known examples include those meted out to punish Cuba (1962), the Iraqi dictatorship,  Chinese  antidemocratic actions, and the Yugoslavian government  in the 1990s. In a parallel way, several measures imposed by the United Nations  (UN) Security Council have taken place in recent  years. The UN Charter  grants  the  Security Council  powers  to  decide  the  sanctions  that  have to be taken in order to maintain  or restore international  peace and  security.  These powers  are made in the form of Security Council Resolutions under Chapter  VII (Action with Respect to Threats to the Peace, Breaches of the Peace, and Acts of Aggression) of the UN Charter. The EU also imposes embargoes consistent  with its Common  Foreign and  Security Policy objectives.

The type of UN sanction  most widely used is the arms  embargo,  such  as those  imposed  on  Angola, Ethiopia, Iraq, Liberia, Rwanda, Sierra Leone, Somalia, Côte d’Ivoire, and Sudan. There have also been commodity embargoes, for example, on diamond exports from Angola, Sierra Leone, Liberia, and Côte d’Ivoire; travel bans and asset freezes on individuals in Angola, Sierra Leone, Liberia, Côte d’Ivoire, and Sudan; and a ban on the sale of petroleum  products to the Angolan rebel movement UNITA.

Embargoes And Negative-Sum Games

In  an  increasingly  integrated  global economy,  it is important to have a clear understanding of the costs and benefits of embargoes. The focus of the literature on economic sanctions has been twofold: their effectiveness and their  economic  impacts  on the sender (the sanction-imposing) country, the target country, and the neighbors.

As to the  question  of effectiveness, most  studies conclude that economic sanctions have limited utility for changing the behavior of governments  in target countries.  Moreover, for these countries,  the effects of banning economic exchanges can cause isolation, reduction in trade and investment flows, and deterioration in their overall economic welfare.

As to economic impacts, several studies have focused on the strategic interaction  between targets and senders of sanctions, and on quantifying the costs to both parties. The main findings suggest a relatively high cost  of economic  sanctions  to  the  economies of both parties while sanctions are in place. The evidence   that   comprehensive   sanctions   affect  bilateral trade  flows between  the  sender  and  the  target countries   is  strong.  Allegedly, sanctions  also  hurt third countries, neighbors or major trading partners. Research suggests that UN sanctions  cut off trading routes, increase transportation and other transaction costs, and disrupt established trading ties with clients and suppliers. This reduces trade flows between land neighbors and the rest of the world.

As embargoes  can also lead to serious economic recession, macroeconomic effects in the target country cannot be underestimated. Restrictions on imports and exports reduce overall gross national product and per capita income, employment  falls, the decline in state  revenue  leads  to  reduced  capital  investment, and to lower levels and quality of social services. On August 6, 1990, the Security Council imposed  economic  sanctions  on Iraq. Seven years later, the UN Committee  on Economic, Social and Cultural Rights noted  that  the  living standard  of a large section  of the Iraqi population had been reduced to subsistence level since the imposition  of the embargo. Per capita income was estimated to have declined by about three-quarter from 1990–93, increasing social inequality.

As we can see, economic sanctions often hurt those people in the target country who are least responsible for the policies that prompted  the imposition of sanctions, and who are also least likely to be able to change these policies. The impact of trade sanctions  on the citizens of some countries  raises the question  of the relationship  between  civil and  political,  and  social and economic rights. This is why, in recent years, the international community has become increasingly concerned  about the humanitarian impact of embargoes and other economic sanctions. For example, in the case of worldwide sanctions against South Africa (1977–94), critics argued that the sanctions  harmed the group the sanctions were supposed to help. Several researchers have also pointed out the evidence of the impact of sanctions against Cuba, Haiti, and Iraq, specifically on health and health services. Since 1991, international agencies have documented Iraq’s explosion  in  child  mortality  rates,  waterborne   diseases from untreated water supplies, and malnutrition in large sectors of the population.

To mitigate  the humanitarian implications,  three important  international initiatives—the  Interlaken, the Bonn-Berlin, and the Stockholm Processes—were launched between 1998 and 2002, with the objective of making UN sanctions  more effective by targeting them more precisely on political objectives. The efficacy of embargoes as an instrument of foreign policy is in great doubt. Now the goal is to influence decision makers in the target country while avoiding negative humanitarian effects.

Bibliography:   

  1. Garfield, The Impact of Economic Sanctions on Health and  Well-being (Overseas  Development Institute, November, 1999);
  2. C. Hufbauer, A. E. Kimberly, C. Tess, and E. Winston, U.S. Economic Sanctions: Their Impact on Trade, Jobs and Wages, Working papers (Institute  for International Economics, 1997);
  3. C. Hufbauer, J. J. Schott, and K. A. Elliott, Economic Sanctions Reconsidered, 2 vols., 2nd ed. (Institute for International Economics, 1990);
  4. Damien Fruchart and Daniel Strandow, United Nations Arms Embargoes: Their Impact on Arms Flows and Target Behaviour (SIPRI, 2007);
  5. E., Rennack, and R. D. Shuey, “Economic Sanctions to Achieve U.S. Foreign Policy Goals: Discussion and Guide to Current Law,” CRS Report 97-949F (November  1, 1999);
  6. United Nations  Office for the Coordination of Humanitarian Affairs, Humanitarian Information  Centres and Partners, www.humanitarianinfo.org (cited March 2009);
  7. United Nations Security Council, Resolutions 1946 to Date, www.un.org (cited July 2008);
  8. Yang, H. Askari, J. Forrer, and H. Teegan, “U.S. Economic Sanctions: An Empirical Study,” International Trade Journal (v.18/1, 2004).

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