TRADE AND HUMAN RIGHTS

We Only Hurt Ourselves With Sanctions by Ronald Lee If the US wishes to punish the violators of human rights, why would it impose measures that only hurt itself? Using trade sanctions to improve human rights in other countries has rarely been successful in the past. These sanctions do, however, hurt the performance of the US economy. In fact, pursuing a policy of economic cooperation between countries can actually help to promote human rights. The US government faces the difficult task of choosing policy instruments to enforce human rights. Trade sanctions are a way for the US to express its outrage without the risk of losing American lives. Many policy makers feel that sanctions are instruments that can do unsustainable damage to other countries' economies. That argument presupposes that foreign countries are desperate to trade with the US and rely on North America as a market for their goods. Do sanctions really have such a dramatic effect? When countries are subjected to US sanctions, they simply find other countries to trade with. When the United States banned the sale of cars to Nicaragua to protest its human rights record, Nicaragua simply turned to Japanese and Korean car-makers. Nicaragua has little reason to revert to trade with the United States when sanctions are lifted. Moreover, there is the risk that the US could become a secondary supplier. Hence, in both the short and long term, the United States will be hurt as a result of its own unilateral trade sanctions. Everyone would agree that US enforcement of trade sanctions has some negative effects on the US economy. Conservative estimates point out that trade sanctions cost the US 15 billion dollars and 200,000 high-wage jobs annually.1 In 1996, the US earned $94 billion dollars trading with countries now at risk of being the targets of US trade sanctions.1 These estimates suggest that policy-makers should pursue different methods of promoting human rights. The US should consider cutting foreign aid or encouraging further NGO involvement. Why should American taxpayers subsidize the brutality of tyrants abroad? When trade sanctions really do hurt the target country's economy, living standards drop and even starvation can become a problem. In Iraq and Haiti, embargoes were intended to overthrow the respective regimes; instead, they caused economic chaos. To advance human rights, the US must increase its economic interaction with other countries. Trade can improve the living standards of oppressed peoples and this development can limit an authoritarian regime's grip on power. International trade leads to decreased dependence on the state, allowing for movements to decentralize political control. Furthermore, foreign trade enables fundamental human values to be passed on to people living under oppressive regimes. From this perspective, US renewal of "most favored nation status" for a nation like China hurts its authoritarian leadership and will eventually help to bring human rights to its oppressed people. One must acknowledge that there are exceptions that justify the use of trade sanctions as an instrument to improve human rights. For instance, in times of wars, the lives saved through an arms embargo are worth the cost of the lost trade. Nevertheless, advancing human rights at an international level is not a simple moral issue; the US has to consider a number of factors before imposing trade sanctions the combinations of which can have adverse effects.

We Cannot Trade With Human Rights Violators by Frederico Gil Sander Imagine you were born in East Timor. The Indonesian army decimated half of your brothers and sisters, and you consider yourself lucky to still be alive. You do not understand how this world, which claims to be so civilized, allows such a tragedy to take place. You understand even less why the United States, the country which sees itself as the world champion of human rights, is selling weapons to Indonesia. As someone concerned about the well being of your neighbor, you are probably thinking: "But what can we do? Should the United States intervene militarily to protect the Timorese?" Although some may claim this is a moral obligation, it is not a practical alternative. Perhaps the United Nations could tell the Indonesians to stop? That has been tried and proven entirely ineffective. Perhaps a boycott on Indonesian goods would put pressure on the government? That would be a sensible alternative; after all, it is something everyone can do relatively easily. But what is the impact of one individual's boycott? Almost none. Although I may be concerned about human rights, I do not have enough incentives to take the trouble to screen the goods I buy. If all people think the same way, the boycott will clearly fail. This is the notorious "collective action" problem: I would like everybody to boycott, but each consumer does not have enough incentives to pursue the boycott individually. There is, however, a simple way to resolve this collective action problem: trade sanctions. A domestic government can boycott foreign goods by preventing their entry into the country. This will make an impact on the targeted economy and pressure the targeted government to change its policies. Consider the case of South Africa: The world staged a massive boycott of that country's goods and imposed trade sanctions because of its discriminatory racial practices. These measures put pressure on politically powerful sectors of the economy and forced the government to give in. Although internal factors were clearly important, the role of trade sanctions in bringing an end to apartheid cannot be understated. Some object to trade sanctions because they feel that they will hurt ordinary people more than they hurt the true perpetrators of human rights abuses. Two responses can be offered to this objection. The first concerns the sale of goods to the foreign country. While preventing the sale of food or medical supplies clearly hurts everyone and hits the poor the hardest, prohibiting exports of military equipment directly targets human rights violators. The second response refers to purchases of goods from the foreign country. If the sanctions affect only concentrated, capital intensive industries, they will hurt the owners of the industries more than the workers. Although industrialists may not be violators of human rights, they have much more lobbying power with the government than those affected by human rights abuses. Other opponents of trade sanctions point to the fact that sanctions should never be allowed because they may be used by interest groups as an excuse to achieve protection from foreign competition. Although this is a valid point, this issue can be readily addressed by appropriate legislation. Trade sanctions, therefore, when appropriately designed and implemented, are an effective policy instrument for the protection of human rights and have an incredible potential to affect change, as the case of South Africa has shown.