Wto - Should All Trade Sanctions Be Stopped?

SHOULD ALL TRADE SANCTIONS BE STOPPED?

To most of the world, sanctions are a mixed blessing. On the one hand, they reinforce trade rules and promote respect for them. On the other hand, they tend to undermine the principles of free trade and provoke a kind of 'trade envy'(Charnovitz) in other international organizations.

Trade retaliation goes back quite a ways; we see examples of it in much of US law:

-Antidumping Act of 1916, which has seen little use.(Charnovitz)

-International Labor Organization, from the Treaty of Versailles 1919, which served as an international dispute system, but no economic measures were ever recommended until 2000, against Burma.(Charnovitz)

-UN Security Council, which handles breaches of peace, only used sanctions 3 times between 1920-1990, but now uses them much more frequently.(Charnovitz)

To understand the difficulty I have agreeing with the suggestion that all trade sanctions must be stopped, I feel it is important to discuss some of the good, the bad, and the ugly involved with imposing sanctions. I'll start my discussion with some of the good that comes from restricting trade, move into some of the negative affects, and summarize with improvements I feel could be made to this defunct system.

The first advantage that comes to mind about imposing trade sanctions would have to be the ability of the sanctioning government to let everyone know how pissed they are, make their own people relatively happy, and then move on. Although this may only be temporary.(Charnovitz)

Individual countries, especially major world powers, like to impose trade sanctions even when the probability of forcing a change in the target country's policy is small. In addition to indicating a resolution and suggesting their disapproval to the direct wrong doer and to other countries, politicians may also want to pose for their own people.(Library of Economics) If you look at the example of the US, European, and British sanctions against South Africa as well as US, European, and Japanese sanctions against China in the wake of the Tiananmen Square massacre, you can see that these were specifically designed to put their own citizens at ease, to make a moral and historical statement, and to send a warning to future offenders of international order. The effects on the specific target countries can almost be observed as secondary. World leaders often decide that the most obvious alternatives to sanctions are no good - military action would be too strong and diplomatic protests too weak. Sanctions can provide a satisfying dramatic display, but avoid the high costs of war.(Library of Economics) This isn't to say that sanctions don't cost a thing, just that they're often less costly than the alternatives.

A second advantage to sanctions can be seen through foreign pressure to promote internal change, assuming that the sanctioned government wants to comply with the rules, but can't because of domestic politics.(Charnovitz) We can see in many cases that sanctions are being imposed primarily for signaling purposes - either for the benefit of allies, other third parties, or once again, their own citizens. If the sanctions aren't carefully targeted or the costs are too high for the sanctioning country, the intended signal may be lost.(Library of Economics)

Sanctions intended to change the behavior or government of a target country are very difficult to design. They have to be imposed as quickly and easily as possible.(Library of Economics) By moving too slowly, it gives the target country time to adjust by finding alternative markets, finding new allies, and by gaining domestic support of its own policies.

Another advantage of trade sanctions is the fact that they have the power to be enacted immediately, unlike a suggestion of compensation, which requires a bilateral agreement.(Charnovitz) This is a big advantage over alternative instruments. A monetary enforcement assessment sounds like a good idea, but there is no way to make them pay up.(Weiss)

Some say that sanctions can be seen as a 'defacto political safeguard'(Charnovitz) for the sanctioned country. A good example of this would be Europe's 'willingness' to accept US sanctions, rather than having to accept hormone produced beef into their society.

A final thought on the good that comes from sanctioning trade would have to be the fact that, most importantly, sanctions promote compliance. Most of the time, just the threat of sanctions is enough to get what you want.

When talking about sanctions, you need to look at both sides. It's not a game, and countries don't always play nice, that's why many sanctions just don't work. Some people say we need to give them more bite by creating a 'true community sanction.' (Charnovitz) But large countries like the idea of hurting others, while others can't really hurt them.

You have to understand that it's very hard for me to weigh these advantages and disadvantages, some of them will be in complete contradiction. So I must state that I feel the bad outweigh the good.

Throughout most of our recent history, sanctions have either preceded or accompanied war. Only when the horrors of WWI prompted President Woodrow Wilson to call for new methods of dispute settlement were sanctions seriously considered as alternatives to war.(Library of Economics)

"A nation that is boycotted is a nation that is in sight of surrender. Apply this peaceful, silent, deadly remedy and there will be no need for force. It does not cost a life outside the nation boycotted, but it brings a pressure upon the nation which, in my judgment, no modern nation could resist." President Woodrow Wilson 1919(Elliott)

Most people are right in thinking that the US views sanctions as an instrument of foreign policy that is positioned somewhere between diplomacy and military engagement.

Other negative affects of sanctions can be seen through economic difficulties passed through to private traders ('the teeth bite back"(Charnovitz)). We have to pay higher prices for substitute products. T.E.G. Gregory and Adam Smith both believed that a retaliatory trade war causes losses among both parties. Since total embargoes are rare, most trade sanctions are selective, affecting only one or a few goods. The economy-wide impacts of these sanctions are usually limited. Because sanctions are often unilateral, trade may only be diverted rather than cut off.(Yang,Teegen)

A smart sanctioning country tries to inflict costs on its target in 2 ways - with trade sanctions