ASA Urges Senate to Exempt Ag Commodities from Unilateral Economic Sanctions

May 11, 1999… Saint Louis, Missouri… The American Soybean Association (ASA) today voiced strong support in testimony before two separate U.S. Senate committees for legislation that would reform unilateral economic sanctions that are denying U.S. soybean farmers access to export markets. With world demand and farm prices at historic lows, these lost market opportunities only worsen the current crisis in the U.S. farm economy.

ASA’s comments were presented today before the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, in support of S.566, "The Agricultural Trade Freedom Act," and the U.S. Senate Committee on Foreign Relations, in support of S.425, "The Food and Medicine for the World Act of 1999."

ASA President Mike Yost, a soybean producer from Murdock, Minn., said, "The use of unilateral economic sanctions by our government has been a recurring nightmare for soybean producers and all of U.S. agriculture for nearly three decades. Every year, these actions deny U.S. farmers, processors, and exporters access to multi-billion dollar markets."

In a report completed last August, ASA determined that restrictions on exports to Iran, Iraq, Libya, Sudan, Cuba, and North Korea resulted in lost U.S. sales of nearly $150 million annually for soybeans and soybean products alone. Even more damaging than the loss of annual sales to specific countries, unilateral sanctions establish the reputation of the U.S. as an unreliable supplier.

"The restrictions on agricultural exports due to supply shortages imposed by Presidents Nixon and Ford in 1972 and 1973 sent shock waves through countries that had become dependent on the U.S. as a supplier of basic food products, including soybeans," Yost said. "Within a few years, major importers led by Japan initiated a long-term investment program to develop the agricultural potential of South American countries, particularly soybean production in Brazil. Twenty-five years later, Brazil is our chief competitor for global soybeans, soybean oil, and soybean meal markets."

S.566 would exempt commercial sales of U.S. agricultural commodities from unilateral economic sanctions unless the president determines that the exemption should not apply for foreign policy or national security reasons. In the event of such a determination, the president is required to submit a report explaining these reasons and assessing the actual or potential importance of the sanctioned country as a market for U.S. agricultural exports, and the effect of the sanctions on exports. The report would also access the impact of the sanctions on the income of U.S. agricultural producers, on the potential increase in competition from other countries, and on the reputation of the U.S. as a reliable supplier.

 "In ASA’s view, this legislation represents a positive step toward reforming U.S. policies governing unilateral economic sanctions," Yost said. "It would force an administration to assess and publicly state the likely impacts that a particular unilateral economic sanction would have on U.S. agriculture, and the extent to which the U.S. would be displaced by other suppliers to the sanctioned country. In every case we have examined, these responses would amount to prior acknowledgement that a sanction will be ineffective and will benefit our competitors at the expense of our own producers."

S.425 would exempt U.S. exports of agricultural and medical products from unilateral economic sanctions unless requested by the president and approved by both houses of Congress. The only exceptions to this exemption are in the event Congress has declared war, the president has declared a state of national emergency, or in the case of products which could have some military application. Also, the bill would not exempt products included in any multilateral sanction.

"This legislation would set a precedent for exempting sales of agricultural and medical supplies from export restrictions, unless conditions meeting the standard of a national emergency exist," Yost said. "This bill would also protect humanitarian exports under the Food for Peace Program, Section 416, and the GSM export credit guarantee program. These authorities are extremely important to the U.S. soybean industry since we depend on food assistance and credit sales programming for a significant part of our annual exports."

ASA strongly supported the administration’s April 28 decision to lift unilateral sanctions on sales of food and medicine to Iran, Libya and Sudan. This action opens markets worth more than $4.2 billion annually, and would allow a requested sale to Iran of $500 million of U.S. agricultural commodities, including soybean oil and soybean meal, to be completed.

"Enactment of S.566 and S.425 would send a signal to both our customers and our competitors that the U.S. is beginning to understand that unilateral sanctions are not good foreign policy tools," Yost said.

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Mike Yost, ASA President, (320) 875-2654, myost@midstate.tds.net
Bob Callanan, Communications Director, bcallanan@soy.org
American Soybean Association
Woodcrest Executive Drive, Suite 100, Saint Louis, MO 63141
Phone: (314) 576-1770, Fax: (314) 576-2786

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