The United States of Sanctions
The Use and Abuse of Economic Coercion
Daniel W. Drezner
Foreign Affairs, Nova York – 16/09/2021
In theory, superpowers should possess a range of foreign policy tools: military might, cultural cachet, diplomatic persuasion, technological prowess, economic aid, and so on. But to anyone paying attention to U.S. foreign policy for the past decade, it has become obvious that the United States relies on one tool above all: economic sanctions.
Sanctions—measures taken by one country to disrupt economic exchange with another—have become the go-to solution for nearly every foreign policy problem. During President Barack Obama’s first term, the United States designated an average of 500 entities for sanctions per year for reasons ranging from human rights abuses to nuclear proliferation to violations of territorial sovereignty. That figure nearly doubled over the course of Donald Trump’s presidency. President Joe Biden, in his first few months in office, imposed new sanctions against Myanmar (for its coup), Nicaragua (for its crackdown), and Russia (for its hacking). He has not fundamentally altered any of the Trump administration’s sanctions programs beyond lifting those against the International Criminal Court. To punish Saudi Arabia for the murder of the dissident Jamal Khashoggi, the Biden administration sanctioned certain Saudi officials, and yet human rights activists wanted more.Activists have also clamored for sanctions on China for its persecution of the Uyghurs, on Hungary for its democratic backsliding, and on Israel for its treatment of the Palestinians.
This reliance on economic sanctions would be natural if they were especially effective at getting other countries to do what Washington wants, but they’re not. The most generous academic estimate of sanctions’ efficacy—a 2014 study relying on a data set maintained by the University of North Carolina—found that, at best, sanctions lead to concessions between one-third and one-half of the time. A 2019 Government Accountability Office study concluded that not even the federal government was necessarily aware when sanctions were working. Officials at the Treasury, State, and Commerce Departments, the report noted, “stated they do not conduct agency assessments of the effectiveness of sanctions in achieving broader U.S. policy goals.”
The truth is that Washington’s fixation with sanctions has little to do with their efficacy and everything to do with something else: American decline. No longer an unchallenged superpower, the United States can’t throw its weight around the way it used to. In relative terms, its military power and diplomatic influence have declined. Two decades of war, recession, polarization, and now a pandemic have dented American power. Frustrated U.S. presidents are left with fewer arrows in their quiver, and they are quick to reach for the easy, available tool of sanctions.
The problem, however, is that sanctions are hardly cost free. They strain relations with allies, antagonize adversaries, and impose economic hardship on innocent civilians.Thus, sanctions not only reveal American decline but accelerate it, too. To make matters worse, the tool is growing duller by the year. Future sanctions are likely to be even less effective as China and Russia happily swoop in to rescue targeted actors and as U.S. allies and partners tire of the repeated application of economic pressure. Together, these developments will render the U.S. dollar less central to global finance, reducing the effect of sanctions that rely on that dominance.
Washington should use sanctions surgically and sparingly. Under a more disciplined approach to economic statecraft, officials would clarify the goal of a particular measure and the criteria for repealing it. But most important, they would remember that there are other tools at their disposal. Sanctions are a specialized instrument best deployed in controlled circumstances, not an all-purpose tool for everyday use. Policymakers should treat them like a scalpel, not a Swiss Army knife.
A HISTORY OF ECONOMIC VIOLENCE
Economic statecraft has been a vital component of U.S. diplomacy since the early days of the republic. As president, Thomas Jefferson urged passage of the Embargo Act of 1807 to punish the United Kingdom and Napoleonic France for harassing U.S. ships. That effort at sanctions was a disaster. Back in the day, the United States needed European markets far more than the United Kingdom and France needed a fledgling country in the New World; the Embargo Act cost the United States far more than it did the European great powers. Even so, the United States continued to use trade as its main foreign policy tool, focusing on prying open foreign markets for export and promoting foreign investment at home. This was only natural given the paltry size of the U.S. military for most of the nineteenth century. The preeminence of the British pound in global finance also meant that the U.S. dollar was not an important currency. Trade was the primary way the United States conducted diplomacy.
At the end of World War I, the United States renewed its enthusiasm for trade sanctions as a means of regulating world politics. President Woodrow Wilson urged Americans to support the League of Nations by arguing that its power to sanction would act as a substitute for war. “A nation boycotted is a nation that is in sight of surrender,” he said in 1919. “Apply this economic, peaceful, silent, deadly remedy and there will be no need for force. It is a terrible remedy.” Americans were unconvinced, and the United States never joined the League of Nations. In the end, sanctions imposed by the league failed to deter Italy from invading Ethiopia in 1935 or stop any other act of belligerence that led to World War II. To the contrary, the U.S. embargo on fuel and other war materials going to Japan helped precipitate the attack on Pearl Harbor.
Policymakers should treat sanctions like a scalpel, not a Swiss Army knife.
The advent of the Cold War expanded the array of tools of economic statecraft available to the United States. For the first time, the country supplied a significant amount of multilateral and bilateral foreign aid; stopping that aid was an easy way of applying economic pressure. The United States’ most successful use of economic sanctions in this period came during the 1956 Suez crisis. Outraged by the British-French-Israeli invasion of Egypt, Washington prevented the United Kingdom from drawing down its International Monetary Fund reserves to defend its currency. The subsequent run on the pound forced London to withdraw its troops.
Most of the time, however, U.S. sanctions failed. In the early years of the Cold War, the United States embargoed Soviet allies to deny them access to vital resources and technologies. That embargo succeeded as an act of containment. But sanctions designed to compel changes in behavior had little bite, since the Soviet Union simply stepped in to offer economic support to the targeted economies. In the early 1960s, for example, as the United States tightened its embargo on exports to Cuba, the Soviets threw Fidel Castro’s regime an economic lifeline by channeling massive amounts of aid to Havana. Later in the Cold War, the United States used economic sanctions to pressure allies and adversaries alike to improve their human rights records. Beyond the rare success of sanctioning a close ally, economic pressure worked only when it came from a broad multilateral coalition, such as the UN sanctions against apartheid-era South Africa.
The end of the Cold War brought an initial burst of hope about sanctions. With the Soviets no longer automatically vetoing UN Security Council resolutions, it seemed possible that multilateral trade sanctions could replace war, just as Wilson had dreamed. Reality quickly proved otherwise. In 1990, after Iraq invaded Kuwait, the Security Council imposed a comprehensive trade embargo on Iraq. These crushing sanctions cut the country’s GDP in half. They were nonetheless unable to compel Saddam Hussein to withdraw from Kuwait; it took the Gulf War to accomplish that. Sanctions against Iraq continued after the war, but the humanitarian costs were staggering: infant mortality rates were widely viewed to have skyrocketed, and per capita income remained stagnant for 15 years. Iraq manipulated figures to exaggerate the humanitarian costs of the sanctions, but the deception worked. Policymakers came to believe that trade sanctions were a blunt instrument that harmed ordinary civilians rather than the elites whose behavior they were intended to alter. So they searched for smarter sanctions that could hit a regime’s ruling coalition.
The centrality of the U.S. dollar seemed to offer a way of doing just that. Beginning in the late 1990s and accelerating after 9/11, the United States made it harder for any financial institution to engage in dollar transactions with sanctioned governments, companies, or people. U.S. and foreign banks need access to U.S. dollars in order to function; even the implicit threat of being denied such access has made most banks in the world reluctant to work with sanctioned entities, effectively expelling them from the global financial system.
These sanctions have proved more potent. Whereas restrictions on trade incentivize private-sector actors to resort to black-market operations, the opposite dynamic is at play with measures concerning dollar transactions. Because financial institutions care about their global reputation and wish to stay in the good graces of U.S. regulators, they tend to comply eagerly with sanctions and even preemptively dump clients seen as too risky. In 2005, when the United States designated the Macao-based bank Banco Delta Asia as a money-laundering concern working on behalf of North Korea, even Chinese banks responded with alacrity to limit their exposure.
As U.S. sanctions grew more powerful, they scored some notable wins. The George W. Bush administration cracked down on terrorist financing and money laundering, as governments bent over backward to retain their access to the U.S. financial system. The Obama administration amped up sanctions against Iran, which drove the country to negotiate a deal restricting its nuclear program in return for the lifting of some sanctions. The Trump administration threatened to raise tariffs and shut down the U.S.-Mexican border to compel Mexico to interdict Central American migrants; in response, the Mexican government deployed its new National Guard to restrict the flow.
Yet for every success, there were more failures. The United States has imposed decades-long sanctions on Belarus, Cuba, Russia, Syria, and Zimbabwe with little to show in the way of tangible results. The Trump administration ratcheted up U.S. economic pressure against Iran, North Korea, and Venezuela as part of its “maximum pressure” campaigns to block even minor evasions of economic restrictions. The efforts also relied on what are known as “secondary sanctions,” whereby third-party countries and companies are threatened with economic coercion if they do not agree to participate in sanctioning the initial target. In every case, the target suffered severe economic costs yet made no concessions. Not even Venezuela, a bankrupt socialist state experiencing hyperinflation in the United States’ backyard, acquiesced.
Sanctions cannot and will not go away anytime soon. Other great powers, such as China and Russia, are becoming increasingly active sanctioners. China has used an array of informal measures to punish Japan, Norway, South Korea, and even the National Basketball Association over the past decade; Russia sanctioned former Soviet republics to deter them from joining an EU initiative in eastern Europe. Aspiring great powers, such as Saudi Arabia, have also tried their hand at economic coercion. There will be more sanctions in the future, not fewer.
But that doesn’t mean the United States has to be part of the problem. Even the countries now discovering sanctions still rely on them for only a fraction of their foreign policy goals; they also sign trade deals, engage in cultural diplomacy, and dole out foreign aid to win friends and influence countries. So did the United States once. Washington needs to exercise the policy muscles it has let atrophy, lest a statecraft gap emerge between it and other governments. U.S. policymakers have become so sanctions-happy that they have blinded themselves to the long-term costs of this tool. To compete with the other great powers, the United States needs to remind the world that it is more than a one-trick pony.
DANIEL W. DREZNER is Professor of International Politics at the Fletcher School of Law and Diplomacy at Tufts University.
Para acessar a íntegra: https://www.foreignaffairs.com/articles/united-states/2021-08-24/united-states-sanctions