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Iran/Iraq: U.S. Administration Pressured On Food Sanctions

Boston, 10 June 1999 (RFE/RL) -- Members of the U.S. Congress pressured the administration of President Bill Clinton on Wednesday to help finance sales of food and medicine to nations that have been subject to U.S. embargoes.

In a hearing of the House of Representatives (lower chamber) Agriculture Committee, several congressmen urged the administration to provide U.S. official financing for food sales to embargoed countries like Iran. Such a move would go beyond President Clinton's recent policy decision of simply allowing exports of food and medical items on humanitarian grounds.

But congressmen representing farm states argued that it will take years before countries such as North Korea will achieve credit status that would allow it to buy U.S. food on ordinary commercial terms. Other countries which compete with the United States also support their sales with government loan guarantees, they said.

But U.S. Undersecretary of State Stuart Eizenstat stressed in his testimony made available to RFE/RL that "there will be no U.S. government funding, financing, guarantees or other support of these sales because we believe it would be inappropriate for these countries in light of their continuing conduct to benefit from such taxpayer-financed programs."

Eizenstat added that the administration would continue to "monitor" the situation to measure the impact of withholding official financing support.

The finance restriction represents an effort to strike a balance between those who favor easing all food sanctions and those who fear the move would undercut U.S. policy against countries that Washington regards as terrorist states.

On April 28, President Clinton announced a new policy of permitting sales of food and medical items to Iran, Libya and Sudan on a case-by-case basis. Other nations which have been labeled as "terrorist" by the United States, including Iraq, Cuba and North Korea, were not directly affected, although some U.S. shipments have been previously allowed to those countries under measures including the United Nations oil-for-food program for Iraq.

The move signaled a shift in the U.S. position on Iran, clearing the way for a $500 million grain sale that had been advocated for months by the U.S. agriculture industry. But the U.S. bureaucracy has been slow to produce the needed regulations that would allow the farm exports to proceed. Eizenstat said that the rules are expected to be issued by the end of this month.

The question of financing continues to be a problem for the policy, however. Senator Jesse Helms, the powerful chairman of the Senate Foreign Relations Committee, has reportedly insisted on the financing ban as a condition of supporting food and medicine exports to non-governmental organizations in Cuba, for example. But without loan guarantees, the policy may yield little actual change in U.S. exports.

Despite the resistance from Helms, the Congress appears to be undergoing a change in its thinking on sanctions after years of unanimous votes for a series of unilateral embargoes.

"I am hard-pressed to conclude that any country, whether it's Iran, Iraq or any other terrorist regime, is going to shoot grain back at Americans," said Congressman George Nethercutt, a Republican from Washington state, who supports a more comprehensive sanctions exemption.

The hearing also provided an opportunity for the Clinton administration to voice its objections to other measures that seek to modify policy on the future use of unilateral economic sanctions and lift U.S. penalties on India and Pakistan for its nuclear weapons tests in May 1998. Eizenstat said the administration broadly supports legislation by Senator Richard Lugar, a Republican of Indiana, to limit the use of unilateral sanctions in the future. The Lugar bill would require Congress to consider the costs and benefits of any new sanctions before they are enacted. New sanctions would also expire after two years, unless Congress votes to reauthorize them. But President Clinton wants several changes in the bill to limit sanctions, Eizenstat said.

The most important issue is the presidential power to waive any sanction on the grounds of U.S. national interest rather than national security, which is seen as a more difficult test. The legislation currently provides only a national security waiver.

Eizenstat noted that President Clinton had used a national interest waiver in the Iran-Libya sanctions law to suspend penalties against Russia's Gazprom. In May 1998, President Clinton agreed to waive trade penalties against Gazprom, as well as the French oil company Total and Petronas of Malaysia, for their participation in a major gas development project in Iran. The result was that Russia had agreed to tighten its own export controls, Eizenstat said.

With regard to India and Pakistan, Eizenstat said the administration was concerned about a Senate measure that would suspend nuclear sanctions for five years. The provision was added Tuesday to a Defense Department funding bill. The administration opposed the measure in its current form because of its possible effect on proliferation, he said.

A House measure, now favored by the administration, would extend President Clinton's authority to extend a one-year waiver of the nuclear penalties for another year. But the administration is also seeking full and permanent waiver authority for the nuclear sanctions, as well as earlier congressional curbs on military assistance to India and Pakistan, Eizenstat said.