Index

Statement of Dan Glickman
Secretary of Agriculture
Before the House Committee on Agriculture
Washington, D.C.

Mr. Chairman, members of the Committee, I am pleased to appear before
you accompanied by Under Secretary of State Stuart Eizenstat to
discuss sanctions and their effects on U.S. agricultural trade.

Reform of U.S. Sanctions Policy

Mr. Chairman, several weeks ago, President Clinton announced that the
United States will exempt commercial sales of agricultural commodities
and products, medicine, and medical equipment from future unilateral
economic sanctions, unless the President finds that it is in the
national interest to include such items due to compelling
circumstances. This is a significant change in U.S. unilateral
economic sanctions policy and it has important implications for
American agriculture. While this new policy does not mean automatic
approval of agricultural sales, it places the presumption on the side
of approval and gives U.S. producers and exporters an opportunity to
compete in more markets.

The new policy will permit licensing of commercial sales for exports
to countries where unilateral economic sanctions are now in effect.
Because under current policy, sales of certain items are already
conditionally licensable for Iraq, North Korea, and Cuba, this change
would affect only Iran, Libya, and Sudan.

We are working to implement these changes as quickly as possible. In
conjunction with the Department of Treasury, we are developing
licensing criteria consistent with standard industry practice to guide
this review. These criteria will be designed to facilitate trade while
encouraging that sanctioned governments do not gain unjustified or
unwarranted benefits. Sales must be at prevailing market prices and
sales generally will be restricted to non-government entities or
government procurement bodies not affiliated with coercive organs of
the state. However, sales to some quasi-governmental organizations
could be authorized provided they are not affiliated with coercive
organizations.

This policy change will cover agricultural commodities and products,
medicine and medical equipment. We are working with the Departments of
State, Commerce, and Treasury to develop precise definitions of the
products to be covered.

This important step toward sanctions reform should help boost U.S.
agricultural exports of largely bulk commodities such as wheat, corn,
rice, and vegetable oil. We estimate that our producers may sell an
additional 500,000 to 1 million tons in exports of both wheat and corn
as a result of this change in policy. In addition, some of these
countries were once major markets for U.S. rice, and we hope our rice
producers will re-capture some of these lost sales.

For example, Iran, a nation of 60-70 million people, represents around
a $3 billion food market. Two decades ago, with only about half its
current population, Iran was the biggest customer for American rice
and one of the biggest for American wheat. Now our producers will have
the opportunity to recapture their share of that market.

Conclusion

Mr. Chairman, the Clinton Administration is committed to the reform of
U.S. sanctions policies. We need to ensure that unilateral economic
sanctions to the extent they exist, are effective; that the costs to
U.S. interests are minimized; and that they contribute to U.S. foreign
policy goals.

The changes we are discussing today follow through on the President's
belief that agricultural commodities and other human essentials should
not be used as instruments of foreign policy, absent compelling
circumstances.

When it comes to monitoring rogue nations and combating international
terrorism, we will continue to be as vigilant as ever. But we have
found too often that sanctions on agricultural products and medicine
have no influence on the behavior of governing regimes. Instead, they
may harm innocent and poor citizens, who may be denied basic tools of
survival.

And, of course, sanctions can have negative economic effects here at
home. American agricultural export shares in these markets are
frequently captured by our global competitors. Just as innocent people
abroad should not be punished for the policies of their governments,
there is no reason why American farmers should be punished either.

With farm prices still low and global demand still soft, this new
sanctions policy could not have come at a better time. Our farmers are
hurting, and they deserve every opportunity to reach out to as many
potential consumers as possible around the world. They produce the
very best food that the world has to offer, and we cannot afford to
handicap them by ceding potentially lucrative markets to our global
competitors.

Mr. Chairman, that completes my statement. I will be happy to answer
any questions.