Feb 8, 2010

sanctions, trade, and private actors

Regarding the Jan/Feb economic sanctions resolution, some affirmatives argue that economic sanctions are immoral because they interfere with free trade, punishing not only citizens in sanctioned nations, but entrepreneurs and corporations in the nations levying the sanctions.

At first glance, the argument seems compelling--but how significant is the impact? In "Economic Sanctions: Public Goals and Private Compensation," found in the Fall 2003 issue of the Chicago Journal of International Law, Gary Hufbauer and Barbara Oegg analyze the economic effects of sanctions.

First, the impacts on trade are relatively small:
Over the past decade, the emergence of new senders such as the European Union and the United Nations, coupled with an expanding list of foreign policy goals, has lead [sic] to a proliferation of new sanctions initiatives. Despite these developments, the total amount of trade disrupted by sanctions remains relatively small. Our estimates indicate that US trade loss due to extensive sanctions ranged from 0.7 percent to 1.8 percent of total US merchandise trade. Lost EU trade is probably much smaller. Similarly, average annual costs of economic sanctions to the target countries seldom exceed 3 percent of GDP. Compared to the tremendous expansion of international trade and capital flows in the last decade, the costs of sanctions in terms of national income or bilateral trade flows seem minor.
However, investment impacts are considerably larger; according to Hufbauer and Oegg's calculations, sanctions affect "as much as 10 percent of world [Foreign Direct Investment]," and that this, on average, would decrease target countries' GDP by a "substantial" 6%.

If the economic impacts are mixed, what might represent another approach for the affirmative? First, consider the wording of the resolution--"... to achieve foreign policy objectives," which in most readings applies exclusively to governments. The affirmative might argue that private actors are a more appropriate agent of action--that individuals and corporations, through grassroots direct action, nonviolent revolution, and litigation, can go after rights violators and rogue regimes.

Hufbauer and Oegg note the Free Burma Coalition, which
...claims that it successfully pressured companies such as Eddie Bauer, Columbia Sportswear, Apple Computer, Motorola, Heineken, Eastman Kodak, Amoco, and Pepsi, among others, to withdraw their businesses from Burma. Some 39 major US retailers have also announced their decisions to cut off all business ties with Burma. Grassroots divestment campaigns are not solely a US phenomenon. Under pressure from the Burma Campaign UK, eight UK investment funds launched an initiative highlighting the unique problems for foreign investors in Burma including the threat of international boycotts, corruption, and the loss of shareholder confidence.
Hufbauer and Oegg also foresee a future in which private litigation, enabled by legislation such as the FSIA and the Alien Tort Statute, and by courts with growing international reach, put a much larger crimp in the economic style of state sponsors of terrorism.

I'm not sure it's worth building a whole case around, but at least it offers a potential block to Negatives arguing that no realistic peaceful alternatives exist.


Stephen Foley said...

The free trade affirmative bites directly into a WTO disad - given that the WTO relies upon economic sanctions to enforce free trade regulations (free trade is only the optimum trade strategy when no one defaults, so the incentives to cheat in certain markets need to be checked by more substantial consequences), in a sanctionless world, free trade faces many more disruptions.

For further reading, see Robert Z Lawrence "Crimes and Punishments? Retaliation in the WTO".

Anonymous said...

could this be used as a negative argument? i have not really looked into the Burma issue, but it seems like, depending on the definition of sanctions, that countries like Burma need to have the right to restrict international trade to prevent human rights abuses. In this sense, could restrictions on trade become a self-defense mechanism?

(the international policy objectives could be handled in regard the international trade, and lack thereof)