Evaluation Of The Effectiveness Of Trade Embargoes

Essay, Research Paper

Abstract

Although I am a strong critic of the use and effectiveness of economic sanctions, such as trade embargoes, for the sake of this assignment, I will present both their theoretical advantages and their disadvantages based upon my research. Trade embargoes and blockades have traditionally been used to entice nations to alter their behavior or to punish them for certain behavior. The intentions behind these policies are generally noble, at least on the surface. However, these policies can have side effects. For example, FDR’s blockade of raw materials against the Japanese in Manchuria in the 1930s arguably led to the bombing of Pearl Harbor, which resulted in U.S. involvement in World War II. The decades-long embargo against Cuba not only did not lead to the topple of the communist regime there, but may have strengthened Castro’s hold on the island and has created animosity toward the United States in Latin America and much suffering by the people of Cuba. Various studies have concluded that embargoes and other economic sanctions generally have not been effective from a utilitarian or policy perspective, yet these policies continue.

Contents

Abstract2

Contents3

Title4

Evaluation of the effectiveness of Trade Embargoes4Strengths4

Weaknesses5

Lessons Learned6

Summary7

Reference8

Evaluation of the effectiveness of Trade Embargoes

Strengths

Trade embargoes and other sanctions can give the sender government the appearance of taking strong measures in response to a given situation without resorting to violence. Sanctions can be imposed in conjunction with other measures to achieve conflict prevention and mitigation goals.

Sanctions may be ineffective: goals may be too elusive, the means too gentle, or cooperation from other countries insufficient. It is usually difficult to determine whether embargoes were an effective deterrent against future misdeeds: embargoes may contribute to a successful outcome, but can rarely achieve ambitious objectives alone. Some regimes are highly resistant to external pressures to reform. At the same time, trade sanctions may narrow the domestic support of authoritarian regimes and aggravate internal divisions.

Economic sanctions can raise the cost of trade and finance to the targeted nations, but in most cases do not ruin their economies. Denied finance can compound the cost to the target country by inhibiting its ability to engage in trade without formal trade controls being imposed. Over time the target nation can develop alternative suppliers and markets, although at increased cost. The target country may receive economic or military aid from other countries opposing the embargoes. If “saving face” is important to the target nation, or if the embargo receives substantial publicity, it may provoke a backlash from the targeted regime and instead increase violent conflict. Backlash from the sender?s allies may be exacerbated if attempts are made to enforce the sanctions extraterritorially.

Weaknesses

Skeptics question whether the costs paid by senders of trade embargoes are worth the benefits derived, or if the costs to innocent groups in the target countries are justified. Trade embargoes often do not succeed in changing the behavior of other countries, depending on various factors. In contrast to most foreign and defense actions financed by the government treasury, the embargo?s costs are mostly felt by businesses whose trade is affected. They can amount to a discriminatory, sector-specific tax to finance foreign policy. Complaints of losses to domestic firms may undermine an embargo?s initiative when it interrupts trade and financial contacts; businesses may fear loss of their reputation for reliability. Trade embargoes may alienate the sender?s foreign allies.

Popular regimes are more vulnerable than authoritarian regimes to domestic pressure for the state to change its behavior. Governments with high degrees of control over information can manipulate the public to blame foreign countries for unjustifiably inflicting damages against them. Embargoes can impose a high cost on noncombatants in the target country.

In addition to trade embargoes, diplomatic sanctions such as breaking bilateral ties or denying a target country organizational membership, deny sender states and organizations some of their direct leverage against the target regime.

Sender governments may fail to honor their commitments to enforce embargoes, gaining political advantage from cooperating in international efforts while reaping economic benefits by looking the other way as their companies evade the embargoes and illicitly take over the market share of other sanctioning countries.

Trade embargoes are blunt tools with limited ability to focus economic pressure against particular groups in the target society. They can have substantial inadvertent adverse impact on the economy and non-targeted population groups; more authoritarian regimes may use their population?s suffering to motivate senders to lift sanctions. Senders can try to design embargoes to impact most heavily on the political leadership instead of the most vulnerable populations. Embargoes imposed on one sector of an economy will spill over into other sectors.

Trade embargoes are of limited utility in compelling a target regime to take actions it strongly resists. Embargoes which target small countries for relatively modest policy goals have greater prospects of altering foreign behavior. They are more successful in achieving objectives such as upholding international norms by punishing the target nation for unacceptable behavior, and deterring future objectionable actions. The availability of goods from other sources lessens the impact of the embargo, raises the level of the international cooperation required to implement it, and increases the domestic political costs of maintaining the controls. It is preferable to impose embargoes on goods not readily obtainable in foreign markets.

Lessons Learned

The likelihood of successfully attaining the foreign policy goals of an economic sanction such as a trade embargo is usually not determined by the actual economic damage caused by the measures. It is important to distinguish the impact of the sanction?change in target country policies or behavior?from their effectiveness?the role the sanction played in producing the desired political response.

Summary

The effectiveness of economic sanctions, such as trade embargoes, depends greatly on the target country government?s sensitivity to its own population. Embargoes work best when there is strong internal political opposition to the target government pressuring the government to accede to the sender?s wishes. Particularly internationally oriented commercial interests that want to retain business ties with the country imposing the sanctions. Policy-makers often have inflated expectations of what sanctions can accomplish. If the objective is military impairment or major policy change, sender countries need to have a near monopoly over trade with the target country. The greater the number of countries needed to implement sanctions, the less likely it is they will be effective. International cooperation can increase the moral suasion of the sanction, help isolate the target country from the global community, and preempt foreign backlash and evasion, especially among allies. Without significant cooperation, a sender has little chance of achieving important policy goals through embargoes. However, international cooperation does not ensure success. Countries in distress or experiencing significant problems are far more likely to succumb to coercion by the sender. An embargoed state with financial resources will always be likely to find willing suppliers somewhere.

References

Anderson, Stuart. 1998. Unilateral Sanctions, in Cato Handbook for Congress: 105th Congress, Washington, DC: The Cato Institute (http://www.cato.org.html)

Bartlett, Bruce. 1985. What?s Wrong With Trade Sanctions, Policy Analysis No. 64. Washington, DC: The Cato Institute (http://www.cato.org.html)

Dorn, James A. 1996. Trade and Human Rights: The Case of China. Cato Journal Vol. 16, No. 1 (Spring/Summer), (http://www.cato.org.html)

Doxey, M. 1980. Economic Sanctions and International Enforcement. Washington, DC: Institute for International Economics.