Statement of Dan Glickman
Secretary of Agriculture
Before the House Committee on Agriculture
June 9, 1999
Mr. Chairman, members of the Committee, I am pleased to appear before you accompanied by Under Secretary of State Stuart Eizenstat to discuss sanctions and their effects on U.S. agricultural trade.
Reform of U.S. Sanctions Policy
Mr. Chairman, several weeks ago, President Clinton announced that the United States will exempt commercial sales of agricultural commodities and products, medicine, and medical equipment from future unilateral economic sanctions, unless the President finds that it is in the national interest to include such items due to compelling circumstances. This is a significant change in U.S. unilateral economic sanctions policy and it has important implications for American agriculture. While this new policy does not mean automatic approval of agricultural sales, it places the presumption on the side of approval and gives U.S. producers and exporters an opportunity to compete in more markets.
The new policy will permit licensing of commercial sales for exports to countries where unilateral economic sanctions are now in effect. Because under current policy, sales of certain items are already conditionally licensable for Iraq, North Korea, and Cuba, this change would affect only Iran, Libya, and Sudan.
We are working to implement these changes as quickly as possible. In conjunction with the Department of Treasury, we are developing licensing criteria consistent with standard industry practice to guide this review. These criteria will be designed to facilitate trade while encouraging that sanctioned governments do not gain unjustified or unwarranted benefits. Sales must be at prevailing market prices and sales generally will be restricted to non-government entities or government procurement bodies not affiliated with coercive organs of the state. However, sales to some quasi-governmental organizations could be authorized provided they are not affiliated with coercive organizations.
This policy change will cover agricultural commodities and products, medicine and medical equipment. We are working with the Departments of State, Commerce, and Treasury to develop precise definitions of the products to be covered.
This important step toward sanctions reform should help boost U.S. agricultural exports of largely bulk commodities such as wheat, corn, rice, and vegetable oil. We estimate that our producers may sell an additional 500,000 to 1 million tons in exports of both wheat and corn as a result of this change in policy. In addition, some of these countries were once major markets for U.S. rice, and we hope our rice producers will re-capture some of these lost sales.
For example, Iran, a nation of 60-70 million people, represents around a $3-billion food market. Two decades ago, with only about half its current population, Iran was the biggest customer for American rice and one of the biggest for American wheat. Now our producers will have the opportunity to recapture their share of that market.
Mr. Chairman, the Clinton Administration is committed to the reform of U.S. sanctions policies. We need to ensure that unilateral economic sanctions to the extent they exist, are effective; that the costs to U.S. interests are minimized; and that they contribute to U.S. foreign policy goals.
The changes we are discussing today follow through on the Presidents belief that agricultural commodities and other human essentials should not be used as instruments of foreign policy, absent compelling circumstances.
When it comes to monitoring rogue nations and combating international terrorism, we will continue to be as vigilant as ever. But we have found too often that sanctions on agricultural products and medicine have no influence on the behavior of governing regimes. Instead, they may harm innocent and poor citizens, who may be denied basic tools of survival.
And, of course, sanctions can have negative economic effects here at home. American agricultural export shares in these markets are frequently captured by our global competitors. Just as innocent people abroad should not be punished for the policies of their governments, there is no reason why American farmers should be punished either.
With farm prices still low and global demand still soft, this new sanctions policy could not have come at a better time. Our farmers are hurting, and they deserve every opportunity to reach out to as many potential consumers as possible around the world.
They produce the very best food that the world has to offer, and we cannot afford to handicap them by ceding potentially lucrative markets to our global competitors.
Mr. Chairman, that completes my statement. I will be happy to answer any questions.