Freedom of Exchange

The Acton Institute affirms the moral and practical necessity of free trade across open borders. The freedom to engage in mutually beneficial exchange is an essential component of a just social order. Isolating countries from the global economy only strengthens the immoral regimes that govern them, harms the material well being of their citizens, and heightens international tension. Therefore, we oppose trade sanctions on moral grounds.

FEATURED ARTICLE:
“Peace and trade, not sanctions, will change Iraq”
by Rev. Robert A. Sirico
National Catholic Reporter, September 24, 1999

The Vatican has come under pressure from the United States to shun Iraq, the birthplace of the Prophet Abraham, during the travels of Pope John Paul II. The State Department is reportedly concerned that the pope's scheduled December visit will be manipulated by Saddam Hussein "for political purposes."

No doubt Saddam will try to do so. But there are few heads of state anywhere whose political motivations are more suspect than Saddam's; meanwhile the pope's motivations are unquestionably religious and humanitarian. It should be clear whose message will prevail.

The real trouble is, from the U.S. point of view, that the pope is a vocal opponent against US sanctions against Iraq, just as he has opposed sanctions against Cuba, another country he visited against US wishes. Indeed, the pope has emerged as a leading critic of sanctions generally, just as the United States has emerged as a leading practitioner of sanctions around the world.

In the pope's view, articulated in many sermons, and undergirded by three magisterial encyclicals on economics, forbidding world trade in nonmilitary goods and services harms the poor, engenders rather than quells conflict, and forestalls political changes consistent with human rights.

Indeed, last month's United Nations' report on the effect of sanctions against Iraq seems to support this view: Half a million children under the age of 5 have died since 1991. Every month, another 4,000 Iraqi children die due to lack of medicine, food and clean water. Malnutrition and disease are widespread. Oil-for-food exchanges have addressed only a tiny part of the problem. The pope cannot be expected to overlook the reality and cause of a crisis of this magnitude.

The problem of sanctions isn't limited to Iraq. The United States maintains some sanctions against 78 countries–which is nearly half the countries in the world. On the list are some holdovers from the Cold War, like Cuba, North Korea and China, as well as the usual lineup of rogue states, including Libya and Iran. Lobbying groups have pushed Congress to impose sanctions for the most menial of infractions. Even Costa Rica, Italy and the tiny Island of Vanuatu have found themselves on the dire receiving end of US trade sanctions.

Along with the rise of sanctions mania, sweeping academic studies have appeared–like Gary Hufbauer's Economic Sanctions Reconsidered (1999)–which have shown sanctions to be economically harmful to the most vulnerable part of the population in the targeted country. Neither do they achieve their stated military or political objectives. After all, Fidel Castro, Muammar al Qaddafi and Hussein still rule their much-sanctioned domains. In each case, sanctions have served to underscore the image of the leader as an embattled opponent of foreign empire.

In contrast, Catholic social teaching has long embraced peaceful international economic relations as an expression of human solidarity. As I saw first-hand on my last visit to Cuba, forbidding trade means barring people from having access to the means of material improvement, which is a sin against charity. It also means using a policy of coercion, rewarding some and injuring others, where peaceful exchange would be more fruitful.

Faced with a long string of failures, the case usually cited in defense of trade sanctions is that of South Africa. After all, didn't the United States join a global boycott of South African products and thereby bring about the fall of the apartheid regime? Isn't this a case of trade sanctions doing exactly what they were intended to and hence leading to greater recognition of human right?

Philip L. Levy of Yale University, writing In the American Economic Review (May 1999), has shown that sanctions did not play the decisive role in bringing down apartheid. Sanctions weren't adopted until 1986, and already the regime had been showing signs of serious strain, dating back to at least 1974. That was when a previous economic growth rate of 4.9 percent per year, dating back decades, downshifted to a 1.8 percent that lasted until 1987.

A key reason was the internal inefficiencies and injustices associated with apartheid itself. As for the sanctions, it is unclear how much damage they caused the regime. The major victims were foreign firms that withdrew from the economy, who sold their assets to local white businessmen who in turn scaled down the operations at the expense of their black and colored workers.

The biggest surprise in Levy's study is what he credits with finally bringing the regime and its most vocal opponents to the negotiation table: not the sanctions but the fall of the Soviet Union. Absent this political change, combined with bondholder pressure and economic restructuring, the regime might have continued to survive the sanctions - as Cuba, Iraq and Libya have done.

We've known since Athens' embargo against Megara in 431 B.C. set off the Peloponnesian War that sanctions are no way to conduct international policy. If we want a world where human rights are respected, the path of peace and trade is to be preferred to a path of ongoing belligerence. Rather than being harassed by the Clinton administration, Pope John Paul II should be praised for setting an example of political independence in the face of a misguided US policy against so many countries.