June 10

Two officials from the Clinton Administration Wednesday explained a new sanctions policy the White House has announced but not put into regulation yet. It calls for a licensing procedure that some in agriculture believe is an "onerous" way to go.

President Clinton announced the change in policy April 28. The administration generally will exempt commercial sales of agricultural commodities and products, medicines and medical equipment from future unilateral sanctions "where we have the discretion to do so," State Department Under Secretary Stuart E. Eizenstat told the House Agriculture Committee.

Potential agricultural sales could total $500 million, mostly in bulk commodities such as wheat, corn, feeds and fodders, rice and vegetable oils, he added. Such sales "do not generally enhance a country's military capacities or support terrorism."

Agriculture Secretary Dan Glickman told the committee USDA and the Treasury Department are developing licensing criteria "consistent with standard industry practice" to implement the policy. The administration will permit licensing of commercial sales for exports to countries where unilateral economic sanctions now are in effect, said Glickman. Currently sales of certain items are conditionally "licensable" for Iraq, North Korea and Cuba; the change would affect Iran, Libya and Sudan, Glickman added.

"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," said Glickman. "In addition, some of these countries were once major markets for U.S. rice, and we hope our rice producers will recapture some of these lost sales."

The licensing criteria will be "country-specific," based on the principle "that the sanctioned governments should not reap unjustified economic benefit" from the policy change, said Eizenstat. Sales will be restricted to non-government entities or government procurement bodies "not affiliated with the coercive organs of the state."

Daniel G. Amstutz, president and CEO, North American Export Grain Association, told the committee it was "regrettable" the regulations on the policy changes had not been released yet. "We fear that the regulations will insist on the consummation of a completed sale prior to requesting an export license," he said. That "would create great price change risk for exporters unless license approvals would be granted immediately upon filling."

The American Farm Bureau Federation views replacing economic sanctions with "administratively onerous licensing regulations" not commercially acceptable. "In fact, the practical application of obtaining a license to export to these nations will hinder our ability to trade with them," said David Hillman, Arkansas Farm Bureau vice president.

"This new policy, as structured with the need to obtain a license for each export transaction,' is unnecessary and cumbersome. It does not signal automatic approval of food sales and does not provide certainty to U.S. producers wishing to compete in these previously closed markets," he added.