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Sanctions Against Rogue States: Do They Work?

Speakers: C. Fred Bergsten, Director, Institute for International Economics, and Robert G. Torricelli, Member, U.S. Senate (D-NJ)
Moderator: Leslie H. Gelb, President, Council on Foreign Relations
May 20, 1998
Council on Foreign Relations


Great Debate Series
Between Robert G. Torricelli (D-N.J.) and Dr. C. Fred Bergsten

New York, N.Y.

Dr. LESLIE GELB (President, Council on Foreign Relations): Good evening. My name is Leslie Gelb. I’m president of the Council on Foreign Relations. And welcome to the Council on Foreign Relations and another in our series of Great Debates sponsored by some of our members on behalf of Home Box Office.

Tonight’s topic, “Sanctions Against Rogue States: Do They Work?,” is another in our effort to bring major foreign policy issues to the attention of our membership and the public. Economic sanctions has been a controversial tool whenever it’s been used, and it’s been used with increasing frequency in recent years by the United States to deal with what we call rogue states, such as Iraq or Iran or Libya or Cuba.

As we will hear tonight, as we’ve heard before, there are very important and hot differences of opinion about the effectiveness of this tool, with some feeling that they do, in fact, undermine the leadership of the regime that we are targeting, and others arguing that we hurt ourselves with economic sanctions more than we hurt the intended victim.

With us this evening, we have two terrific people to talk about this subject: Senator Robert Torricelli, Democrat of New Jersey, and Dr. C. Fred Bergsten. Senator Torricelli was elected to the Senate from New Jersey last year. Before that, he was for 14 years a member of the House Foreign Affairs Committee. And he comes to us both as an expert on foreign affairs and as a champion of human rights. In fact, he was the author of the Cuban Democracy Act, one of the economic sanctions instances we’ll be talking about this evening.

C. Fred Bergsten is director of the Institute for International Economics, the finest economics think tank in this country and, I would say, anywhere. He is also the author of so many books and articles as to give Hulk Hogan a hernia. Before Fred was 21, he was an assistant secretary of the Treasury and the international economics expert on Henry Kissinger’s National Security Council staff.

The routine will be, as always, each presenter will talk for roughly five minutes. When I stand next to them, that’s the signal that they’re about to be interrupted and should really begin interrupting themselves. They’ll have a minute or less at that point. And we really try to hold as strictly as possible to those time limits, roughly five to seven minutes. Then you’ll have two minutes each to rebut. And then I’ll ask a question of each of you, and you can begin to talk to each other. We’ll then open it up to our colleagues in the audience, and you’ll both have an opportunity to respond to whatever question.

Senator Torricelli, will you begin, please.

Senator ROBERT G. TORRICELLI (Democrat, New Jersey): Thank you very much, and thank you so much for this opportunity tonight. I should, by way of introduction, offer some comparison. As many of you may know, that during the 1970s, Fred and I both served in the Carter administration. Fred was the director of international policy for the Treasury Department and I carried Walter Mondale’s briefcase through much of the administration. Fred has, in the years since, written extensively on this subject and is the author of a number of books, and I, of course, am the proud author of my remarks this evening. So we come to this with these backgrounds.

When the various trends of the twentieth century in American foreign policy are written by some future generation, among the changes and the trends which will be most notable is the use of economic power as an element of foreign policy—the arrival of the twentieth century and the advance of the technology of death in war with the economic interdependence of our times. Among the first reactions to the First World War is, there had to be an option. In 1919 Woodrow Wilson said, “Apply economic sanctions peacefully, silently and effectively, and there will be no need for war.”

This was a reaction to the convergence of these three great factors: economic interdependence in the twentieth century that had never existed to such an extent before, the tremendous advance of technology in war and a changing notion of sovereignty. There are things that nations would do internally, even with their own people, that were no longer acceptable.

I cannot claim that these sanctions always kept the peace, but they did make a difference in the twentieth century. Sometimes they did as little as simply define the aggressor—Mussolini in 1937 with Abyssinia. As the world was watching the competing sides going into the great conflict of the second World War, the international community, even with an institution as weak as the League of Nations, was able to define for the international community, for those who were watching, right and wrong. Sometimes, at least in the margins, it even had an impact on future conflicts: 1940, Japan.

After the Second World War, the lessons of what the League had attempted with sanctions that the United States sometimes had done unilaterally with sanctions was learned and applied much more aggressively. What had been the problems of technology in the first World War accelerated into atomic weapons. What had been a problem with human rights abuses was now the Holocaust. And global economic integration was almost complete. Understandably, sanctions became much more prevalent.

In the 50 years that followed, 115 cases of economic sanctions being used for conflict avoidance or other purposes with a great range of success and sometimes frustrations, often used to separate dictators from their oligarchies that would support them: Trujillo in the Dominican Republic, Allende in Chile. Sometimes to express simply moral outrage because there’s nothing else we could do: Libya with Pan Am 103, the Soviets with Soviet Jewry, the invasion of Afghanistan.

But for all the frustrations, there were also extraordinary successes. How would the history of Rhodesia had been different in 1965 if not for economic sanctions, the entire international community taking a common view on an issue of moral outrage, or South Africa with apartheid? Indeed, some cases, even where military options proved impossible or unavailable, it did yield results, if not perfectly. The end of re-education camps in Vietnam certainly was impacted by the varied and economic sanctions that remained and the Vietnamese desire to regain the international economic community. North Korean intransigence yielded the negotiations about their desire for atomic power and reactors.

There are no perfect lessons, but Kimberly Elliott writes in her “Factors Affecting Success of Sanctions” that in those cases where sanctions produced at least a 2 1/2 percent decline in GNP, there were results. And where a 5 percent decline in GNP resulted from economic sanctions, in those 11 cases, nine of them produced a political result. We know now that it is not a perfect tool, but the lesson of the twentieth century is that economic sanctions are an alternative to military power to be seen on a ladder of escalation. If the diplomatic note is the low end of that escalation and if military attack is the high end, there is another factor, a middle course—economic sanctions—that established either a moral position or economic leverage or to meet at a minimum defined issue.

It is not necessary, finally, that they always succeed. The United States will often be alone in promoting economic sanctions. But I recall in the latter years of the 1980s, when the Cold War was coming to its conclusion, meeting with students in Athens, talking about the United States, their anger over the colonels and our immoral position in the Cold War and being asked simply, “When there is no Soviet Union and when there is no Cold War, will the United States still be championing the cause of human rights and democracy around the world, or will it no longer matter?”

This many years after the fall of the Soviet Union, that is not altogether clear. But every time the United States stands alone in the defense of a principle, against a dictator, even at the cost of our own businesses or ourselves, that message is going out around the world. No, Fred, they are not a perfect alternative. Economic sanctions will not work in every case and they have been misused. But so many years ago, Woodrow Wilson had it right, as he did in so many other ways. It is an alternative to war. It is a chance to take and capture the high moral ground. It is a chance to define an issue. Economic sanctions in a world where war is no longer a viable option are a realistic and a real alternative.

Dr. GELB: Thank you very much. Fred, you’ve got six minutes and 27 seconds, but I know you’ll take more.

Dr. C. FRED BERGSTEN (Director, Institute for International Economics): Les, thank you, and congratulations to you and the Council for holding one of your Great Debates on this topic. I say that because sanctions are a very big issue for U.S. foreign policy. Those in place now directly hit more than 30 countries with over 50 percent of the world’s population. Because we now apply our sanctions to firms based in third countries who deal with the countries we don’t like, our sanctions indirectly hit every country that’s a home base to multinational firms. That includes every one of the world’s major economies, including, of course, the Europeans, Canada, Japan, in addition to the targets themselves. So this is, in fact, one of the biggest foreign policy issues we have, and a debate like this is eminently worthwhile.

It’s also worth noting that our study of last year concluded that the cost to the U.S. economy of current sanctions is about $15 billion to $20 billion a year in lost exports. Now I’ll come back to the economics of that later, but the point here is that that is equal to the total budget cost of American foreign policy. There’s a discriminatory impact of that foreign policy expenditure. It hits the companies and workers who just happen to sell to countries that we don’t like that year. And so I think we should give enormous attention to the overall policy of sanctions before we continue its escalation, as has been the case in recent years.

I want to offer four basic conclusions on the topic. I do that based on an enormous amount of research at our institute, which I thank Les for those kind comments. We had a team that’s worked on sanctions for 15 years, led by Gary Hufbauer, to whom I give enormous credit for that, Jeffrey Schott, Kimberly Elliott, who is here with me, and I was delighted that the senator quoted. These are a few of the books that we’ve published on it over the years. Another comprehensive result is coming later this year. We have studied—it’s now over 150 cases—every one in the twentieth century. We’ve tried to score the effects on foreign policy. I think it is the most exhaustive study going, and I’ll try to base my remarks on that.

The first conclusion is that sanctions have an extremely poor record of achieving their own foreign policy goals. Since 1973, the last quarter-century, only 17 percent of U.S. sanctions have worked. That’s whether they’re unilateral or multilateral. But less than one in five of the cases we have applied have, according to our scoring system, had positive effect. They almost never work when they are applied on a partial rather than comprehensive basis, which is the norm. They almost never work when they are applied unilaterally rather than multilaterally, which in these days is almost always the norm. There is no case—repeat, no case—where unilateral sanctions have ever worked to induce a sizable country to make a major change in policy, no case in history that we have been able to discover. The simple reason is that the United States no longer dominates the world economy. There are always alternative sources of export, import markets, finance, whatever it may be. We alone cannot coerce others. And there are always alternatives, and they will always be available.

There’s a second reason, and that is the tendency of Congress to increasingly implement sanctions on its own. When it does so, it almost always totally disregards the views of our allies and other countries whose help we need to make the sanctions work or, indeed, to put it bluntly, very much careful thought at all to the criteria that need to be checked before one thinks the sanctions might work. Our studies do not show that sanctions must necessarily fail. There are certain criteria that have led them to work in the past. You have to pursue relatively modest goals—not ask a foreign regime to commit political suicide. You have to attack a regime that’s economically weak and politically unstable. You have to have lots of trade or economic transactions with it going in because then there’s something to cut off and you can hurt them. In short, there are criteria, the most important of which turns out to be the sanctions, must be multilateral.

And so if we really want to use sanctions in the middle way that the senator suggested, we have to figure out how to get multilateral support so they will have a chance to work. And that’s my second critique of current policy. Current U.S. sanctions are counterproductive because they almost always alienate the very allies whose support we need rather than getting them on our side. That’s because of the unilateral nature of the sanctions, the secondary boycotts that we apply to firms based in other countries rather than consulting and seeking to get them to work for us.

We tell Canada, the U.K. and Japan that their companies cannot deal with a country we don’t like, and if they do, we’ll hit them. Ask yourselves: How would we react if Canada, the United Kingdom and Japan told us that Boeing, General Electric, AT&T could not deal with countries they don’t like? How would we react? My answer is not theoretical. It’s happened. The Arab League told us, and we responded with legislation that forbid our companies to cooperate with the dictates of another country. Is it any surprise that other countries react to our unilateral dictates the same way with blocking statutes and the like?

The result is that the United States is isolated rather than the target country being isolated. The U.N. just voted 143-to-3 to try to get us to eliminate the Cuban embargo. At Santiago over the weekend, we heard more noises in that direction. It is the U.S. that isolates itself rather than the target country which is our goal.

My final conclusion relates to the costs to the United States themselves. There are substantial costs to our economy. We lose exports, as I mentioned at the outset, on the order of at least $15 billion to $20 billion per year as a result of our own sanctions against other countries. Those results are probably greatly understated because, over the long term, we acquire the reputation of being an unreliable supplier. We still lose agricultural exports as a result of the grain embargo of 1973. We still lose oil equipment exports as a result of the pipeline embargo of 1980-81. Those are big losses to the American economy, probably on the order of a quarter of a million high-paying jobs a year, on the order of $1 billion of extra export earnings. And as I mentioned, those are losses that are highly discriminatory and, one might even say, undemocratic because they hit companies and workers who just happen to sell to countries that we don’t like that year.

In short, a cost-benefit analysis suggests that sanctions are one of the worst foreign policy tools we have. Yes, middle courses are needed. We’ve developed a ramp of about 110 alternative measures that are somewhere between war and doing nothing. We think more systematic procedures are needed to look at them rather than mindlessly going to sanctions. We’ve obviously failed Woodrow Wilson’s test. The sanctions that we apply today are not done silently, they are not done effectively and I submit time has come for a basic change in this policy tool.

Dr. GELB: Thank you, Fred. Thank you, Senator Torricelli. Two-minute rebuttal, Senator.

Sen. TORRICELLI: Thank you very much. I should remind you, United States senators cannot clear their throats in two minutes. This reminds me of every reason why I wanted to get out of the House of Representatives into the Senate.

Dr. GELB: Time’s up.

Sen. TORRICELLI: That is a bit of nostalgia for me with the House. It has been said that the cost of American economic embargoes, this use of economic power, is $15 billion to $20 billion a year. This in a country which spent $3 trillion to win the Cold War, which until only two years ago had a military budget of $300 billion a year in adjusted terms—$15 billion to $20 billion a year? Frankly, in the Senate, we call that a rounding error.

To put it in its simplest terms, $15 billion to $20 billion a year, with all the carnage and the sacrifices of the last 50 years in American foreign policy, if one of those regimes of sanctions worked, considering the American lives they saved, with the conflicts they resolved, if one of the 115, it’s a policy that should continue to be refined and explored. The fact of the matter is the argument that Fred makes is not an argument against sanctions or economic leverage. It’s an argument to learn from our experience and to refine them, because Fred is right. They are not a perfect tool. They require that we have leverage, that there be dependence, that they be applied against those nations where they, indeed, will be taken most seriously and with realistic goals.

American sanctions against China will not succeed. American sanctions against nations with great trade with the United States and great dependence will succeed if, indeed, we are patient enough. But in the final analysis, remember, this does not require for success capitulation to American objectives—apartheid in South Africa, Soviet Jewry. They can be much more limited and still be effective. American sanctions against Qaddafi are successful, though he hasn’t changed any policy, because we have identified him as a criminal. American sanctions against Mussolini were successful simply because we defined who was right in a war that was inevitable. Remember the objectives. They can be limited but still succeed by the use of this economic power.

Dr. GELB: Thank you, Senator Torricelli. Dr. Bergsten.

Dr. BERGSTEN: Just on some of the historical facts, the sanctions against Mussolini, of course, did not work because they were weak and there was no resolve. Sanctions against Japan, likewise. They led to war. They didn’t prevent war. I don’t think they really lead to the conclusion that the senator wanted to draw.

He says that $15 billion to $20 billion is not much, and as an economist, I would, of course, say as a percentage of GDP, they’re not much. If they bought something, it might be worth spending. But on my conclusions, they’re buying very little. Moreover, I’d underline the point I made at the outset. The total foreign affairs budget of the United States is $15 billion to $20 billion. This is an amount equal to that total that we work, agonize on every year. If we’re going to spend even that much, we better do a better job doing it or else the whole foreign policy budget is an even worse failure than we think.

I’d like to say a word on the Cuban case because it’s one with which the senator has been particularly associated, as indicated in the chairman’s introduction. We’ve looked at the Cuban case in our study like all the others and scored them against two criteria. Have the U.S. foreign policy goals succeeded on a scale, one to four, lowest to highest? And have the sanctions contributed to that outcome, one to four, lowest to highest? Our conclusion is that the Cuban sanctions have been a total failure, a score of one on each count, a multiple of one, the lowest possible score. Indeed, there are counterproductive features of the Cuban sanctions that I think display the difficulty with the whole policy tool.

The Helms-Burton Act, now the dominant act in this area, eliminates any incentive, of course, for the current regime to reform because it wouldn’t permit the current regime to continue until the sanctions were eliminated. It has rallied anti-Castro sentiment within Cuba. Indeed, a group of former congressmen who came back recently reported quite widely that it’s now called in Cuba the Helms-Burton-Castro Act because it has so rallied support to the regime, even from those who oppose it more generally but feel they have to support it against the imperialist aggressor.

And finally, by denying food to the poorest, by hurting the weakest people in the target country, it replicates the disadvantage of most sanctions. And finally, because Helms-Burton has so antagonized relations with our European, Canadian and other chief allies, we have badly undermined not only any possibility for a successful sanctions policy but broader U.S. economic and foreign policy goals as well.

Dr. GELB: Thank you very much, Dr. Bergsten.

Why don’t you respond on the Cuba point, Senator, and...

Sen. TORRICELLI: I had a personal goal of getting through these...

Dr. GELB: ...from that point on, why don’t you each fire at will.

Sen. TORRICELLI: I had a personal goal of getting through these entire remarks without ever mentioning the word ‘Cuba,’ which for me would be a first. I am in the position, of course, of defending Jesse Helms, which I only do inside for the fear that lightning will strike. Let me say this about it. There is much written about the Cuban Democracy Act of which I authored and the Helms-Burton Act that I think are similar to Fred’s argument. Let me tell you why I reject them. It is neither fair nor accurate to contend that we have had a near-40-year experience with an embargo against Cuba that has failed. The reality is the American economic embargo against Cuba is now about four years old. Until 1993, American multinational firms were free to trade through Europe and did so to the tune of nearly $1/2 billion a year in trade from American corporations. The Soviet Union was providing $5 billion a year in bilateral assistance. Even Fidel Castro, even with communism, could keep an economy going under those circumstances. We ended it. The Cuban economy has contracted by at least a third.

Has it succeeded? No. In four years, how could it? Apartheid didn’t end in four years after an economic embargo. The Soviets didn’t rethink Soviet Jewry after four years. It can succeed. I have probably met at the docks in Florida more Cuban refugees than anyone in this country. And I can tell you this idea that this is strengthening Fidel Castro is fallacious. It is not. It is not. This is an old song for Fidel Castro that somehow the United States is legitimizing his regime by this embargo. In fact, the bitterness at Mexican and Canadian corporations is palpable, the fact that they continue to support him through trade. This will bring a change.

Does anyone really believe that if it were not for this economic pressure and this embargo that Fidel Castro, after all these years, would invite the Pope? He have a change in religion? A new belief for dialogue? Would he, indeed, by dollarizing the economy, allowing some small capitalist enterprises? The best evidence of the success of our policy of the last four years is Fidel Castro himself.

Dr. BERGSTEN: I was going to try to get through this debate without quoting the Pope, but since you raised it, I’ll quote the pope. He says, “Get rid of the embargo,” Senator. But let’s join the substantive issue. You compare the Cuban case with South Africa, and as I mentioned in my remarks at the outset, South Africa is at least a qualified success for sanctions, but they were multilateral sanctions. I’ve argued that the inherent reason your Cuban effort won’t succeed—and it has not so far, as you acknowledge—is that it is unilateral and, indeed, so abrasive to the other countries that could make it work that they’re our opponents, not our allies.

So wouldn’t it be a more sensible strategy, if you really want to use sanctions to work, to change the approach, make a serious effort with the Europeans, Canadians and other allies, try to erect a multilateral mechanism that would lastingly and severely hurt the Cuban economy, provide a united world front against it, as we did with South Africa and Rhodesia and, to some extent, the Soviet Union, and, therefore, have a chance to work, rather than simply declare moral victories?

Dr. GELB: The audience may want to turn back to Cuba in a minute in order to get the final word on the Pope, but in the meantime, let’s look at another case. Let’s look at Iraq for a moment before we open up the floor. Many people have argued that we’ve done ourselves in with our efforts to wall off Saddam through the sanctions because, essentially, it hurt the Iraqi people without hurting Saddam very much. He’s even in greater control, if we’re to believe our own newspapers or the CIA. So where have sanctions benefited us there?

Sen. TORRICELLI: I think one of the most difficult cases to make in the application of modern American economic sanctions is Iraq. Iraq has not succeeded because of some of the factors that Fred laid out for necessity for economic sanctions. They were not limited and they were not realistic, even if they were multilateral. For the United States to have an objective of its policy with Iraq an inspection of an entire country over an unlimited period of time to eliminate any possibility of manufacturing or possessing chemical or biological weapons was never realistic and never going to be obtained. It simply put Saddam Hussein into a waiting game where he could wait us out, which he has, and has frustrated the cause of sanctions and, I believe, undermined their usefulness in other circumstances. This has not been a well-conceived or applied policy of economic sanctions.

Had they been limited in scope and realistic in their goals, economic sanctions against Iraq could have at least limited Saddam’s ability to gather the means of delivering those weapons, lessened his technology and weakened the regime. It was an overapplication of the cause of sanctions which has led to frustration and, I think, failure in the policy.

Dr. GELB: Fred, let me put a hard case to you on Iran. Here, I think there is pretty good evidence—certainly, the administration believes there’s very good evidence—that Iran has been sponsoring terrorism. And what are their choices as they look down the list? It came to economic sanctions or virtually nothing but jawboning. The administration has hurt itself, has hurt American companies, relations with our allies. But at the same time, they believe that they’ve slowed down the sale of some sensitive potentially useful military equipment to Iran through economic sanctions. What about that argument?

Dr. BERGSTEN: It’s a tough case. I would note, as the senator did in the case of Iraq, that when there have been limited components of the sanction effort in Iran, they have worked. And you’ve cited some aspects of it. Again, I think the basic problem has been the excessive objectives that have been in place from time to time and the failure to really seek multilateral support.

I was harsh on Congress and blamed Congress for legislating, as in the Iran-Libya Sanctions Act. Those pieces of legislation, in fact, undermine any chance for multilateral agreement that would make the sanctions work. But I would say that successive administrations were not very skillful and effective either in trying to array multilateral support in a case where there’s a real rogue state terrorist problem, as there is in Iran. It’s hard to rerun history, but I’d still try to do it at this point, try to go back to the main allies and still try to erect an effective multilateral stance, simply because without it, we know that the results are ineffectual, as the senator said, with Iraq.

Sen. TORRICELLI: The United States is going to have to accept the fact that in many of these circumstances, multilateral sanctions simply are not available. There are always going to be nations that are going to seek individual economic opportunity. There is always an underground for weaponry and spare parts and commercial components. And, of course, there are always the French. Taken together, this makes multilateral sanctions often very difficult. But that does not mean that they are still not effective where it is most important.

And Iran is the best example. We are not, with a country of Iran’s size and financial resources, going to deny them many areas of technology or commercial goods. That is not going to happen. But at this stage, incredibly, we have returned to a position where many items of technology, commercially—oil drilling equipment and pumping equipment, exploration equipment, and in essential items of military technology—boastful though it may be, the United States is in a class by itself. There is a level of technology that if you do not get it from the United States, you will not be in a position to threaten on offensive means some of Iran’s neighbors and especially the American fleet in the Persian Gulf. That is not a perfect defense.

The Iranians or the Iraqis, when the Iraqi sanctions lift—for all practical purposes, they probably will next year at this time—they will escape and get many of the things they desire. But remember, going back to our definition of when sanctions are successful, in some of these items, the United States does have leverage, in some cases uniquely so, and in some items of technology, especially militarily. And in the high end, we are in a position of considerable leverage.

Dr. BERGSTEN: I would simply add two things. Sure, there are some items, but we know that there are black knights—in this particular case Russia and China—who are not going to participate, even in a multilateral Western embargo and, therefore, probably are going to evade the sanctions. We also know that embargoing Iran and cutting it off from all our efforts—all our support for pipelines and oil field technology adds another foreign policy problem which has to do with our dependence on oil in the Middle East. It limits the prospect for pipelines from the Caspian new production areas, which would otherwise add to our national security in a major diversification sense. So in addition to the normal economic costs, there are additional losses here. The prospect for success remains very, very limited despite the fact that there are a few items where we can deny them product, and there are a few investments that we can, admittedly, slow down.

Dr. GELB: Thank you. I think you’ve both done a terrific job of setting the stage. Let me turn to our colleagues in the audience. A number of people tonight are joining us for the first time as members of the Council. Our tradition is please stand when recognized, say your name, identify yourself and state your question crisply. One question to a customer. Floor is open. Please. Wait for the microphone.

QUESTIONER: I think—my question is, before I make a speech, is the real problem not that the United States is now employing sanctions much too frequently and as a facile policy tool that sometimes is a substitute for the elaboration of coherent foreign policy? The statistic that I believe that both Senator Torricelli and Fred Bergsten mentioned that since World War I, we have something like 115 sanctions imposed. But more importantly, between 1993 and 1996, 60 of those sanctions were put into place. So is the issue not that we’re not doing our job in elaborating coherent policies towards certain countries and regions in the world using preventive diplomacy and then multilateral sanctions and then, only as a last resort, unilateral sanctions? Is this not the danger?

Dr. BERGSTEN: My answer would be yes. The numbers you mentioned weren’t quite internally consistent. The 60 cases some people cite in the last five years, not on the same basis as 115, but you’re quite right. There’s been an escalation in the number of cases, and it’s certainly become the foreign policy instrument of choice with a failure to think through anything else. To underline the validity of your point, our studies show that prior to 1973 the success ratio was close to half. In a period when sanctions were used less frequently, more often multilaterally with much more targeted and modest objectives in mind, the payoff rate was fairly high. Now maybe that led to the destruction of the tool itself. People said, “Ah, it works pretty well. We’ll use it more,” and forgot that the method of using it was key.

But the history, at least from our studies, shows that the tool can work. It’s only its more recent manifestations that have had such a poor success ratio. And if we go back and learn the lessons of the earlier successes, as buttressed by the recent cases, I think we could resurrect the tool as a useful method of foreign policy. But it’s one that would have to be used more infrequently, more judiciously and, I would suggest, under new procedural safeguards, cost-benefit analyses and careful techniques for employing it, which, frankly, are not done now, either in the executive branch or particularly in the Congress.

Dr. GELB: Let me give you Ed Djerejian’s follow-up question. How would you use it in Iraq? I mean, show me in, you know, three or four steps how you would rejigger the sanctions so that they would work better in Iraq or work at all.

Dr. BERGSTEN: I’d apply our principles. The first is to target the objective very precisely, very specifically and with some degree of modesty. And here I suppose I’d be a little more bullish on the prospect even than the senator was. Maybe zeroing in on the discovery of weapons of mass destruction, techniques for using them, focusing on that and that alone, making it clear that was the goal. Going after that would, I think, as it has to some extent already, commanded multilateral support and avoided the excessive expectations—when you imply that your goal is to bring down Saddam Hussein, change the whole regime or make a massive switch, which essentially asks the target country government to commit suicide, which it’s not going to do. I think that kind of targeting can win the kind of support that would make the tool work, even in a tough case like Iraq.

Sen. TORRICELLI: I take the same statistics and look at it from an entirely different perspective. The rising use of these economic sanctions is an indication since the Vietnam War that a military option just increasingly is simply not available. What happened in ‘65 with the invasion of Santo Domingo for political purposes today probably would have resulted first in an economic sanction. I’m not sure that’s an indication of national failure rather than one of national political maturity. I also don’t think that you can take these sanctions, as varied as they are, and indicate, as Fred has done, that they only are successful if a nation completely capitulates in its policy. Ending apartheid in South Africa is an unqualified success. All sanctions are not going to result in that. Sometimes it is enough, as it may be in the final analysis with Libya, that the international community knows that those who brought down Pan Am 103 have not been brought to justice. They may never be brought to justice. But the fact that the international community has identified Qaddafi, who he is and what he represents and that he continues to defy international law may be a success enough.

Fred took issue with my historic analysis that either with the Japanese after Manchuria in 1939 or with Mussolini with Abyssinia that these were also failures. On the contrary. Roosevelt was using economic sanctions in the late 1930s, although they probably had no economic impact, certainly brought no political success, simply because he’s trying to make a case to the American people and prepare them, as he was trying to do with Mussolini as well. If we’re going to approach all of these cases and only decide on success based on national capitulation, we are going to be very frustrated. And Fred will be right. This is not only an imprecise tool, it is a failing tool. I’m suggesting to you, you need to look beyond that. There are many things we can be trying to achieve in doing this.

And frankly, although I know we’ll revisit it and it is controversial, in the case of Castro, we may not change his government. We may not change the human rights situation. But in delegitimizing the Castro model of national development in recent years, that doesn’t mean we still didn’t achieve something by isolating him.

Dr. GELB: Thank you.

Dr. BERGSTEN: Could I ask the senator why it’s necessary to apply sanctions to identify the bad guy? You can make lots of speeches from the White House and from the Senate. You can do lots of nasty things. I’ve got my list of 120. Why is it that applying the sanctions somehow adds to the opprobrium that you generate against a rogue state or an unwholesome dictator—why do you have to add that to make some difference at the margin?

Sen. TORRICELLI: Because I think, Fred, this returns to the Wilson strategy that we both employed in our opening comments, in 1919. And that is that in modern relations between nations, there is a scale of escalation. And on that ladder, we employ people like Ambassador Murphy here to send nasty notes when there’s something we don’t like, and after that we break relations, and after that we go to the U.N. and we make impassioned speeches of isolation, and after that we use economic sanctions. And when all else fails, we use military means, up to and then beyond declarations. But we have learned in the 20th century to climb that ladder very slowly. I think rather than seeing it as one of the failures of American policy in the latter half of the 20th century, it is one of our great successes, that we do it slowly, we do it deliberately. But every one of those 115 cases that we cited is an example where in the 19th century, somebody would have attacked, lives would have been lost, wars would have been declared. Now, simply, we’re drawing the line economically. It’s not a failure. It’s a success.

Dr. GELB: Senator...

Dr. BERGSTEN: Could I say that I simply doubt that an exercise of impotence of national policy and a display thereof is a very acute effective means of conducting foreign policy.

Dr. GELB: I know this could go on forever.

Sen. TORRICELLI: And may.

Dr. GELB: Just to correct you on Ambassador Murphy, generally we broke relations before we sent Ambassador Murphy. All the way down here, please.

QUESTIONER: Senator, how, in your own mind, as you contemplate supporting existing sanctions or rally to the support perhaps of proposed new sanctions, do you differentiate between trying to affect another country’s external policies which threaten us in some way and the country’s internal policies which only threaten their own people?

Sen. TORRICELLI: Well, that, of course, was the principal line traditionally in the use of sanctions or even military power, that we for a long time respected that a nation like our own had the right employing sanctions or military means if it affected our own vital interests. But if it went to their internal affairs, it was another matter.

I think there is no greater achievement in foreign policy than that line has been broken. There is now an undefined but still a certain understanding among nations that even with their own sovereign citizens, entirely within their own bounds, there is a level of conduct that is so outrageous that it will not be permitted. That should have been true with the Kurds in Iraq. It should have been true with Pol Pot internally in Cambodia. We have not applied it well. It certainly should have been true with the Tutsis in Africa. But nevertheless, that does not mean that we have not started to blur that line.

What happened in the late 1930s and early ‘40s with national socialism in Germany, when people were able to say it was internal, it was them, it was their matter, if I am right about this change in the concept of sovereignty is not going to happen again. It’s part of what I argue about Cuba. It is true Castro is no longer threatening Central America. No one can argue he’s a threat to American security. But can anybody argue that 1,500 political prisoners, people jailed with no charges and no trial is not an outrage or that at this late point in the Americas of the twentieth century no elections, no free speech, no competing political party is not a violation of basic human rights, thereby inviting the international community to have sanctions? The line that you cited has been blurred, and I think it is a great achievement.

Dr. GELB: Thank you. Over to my right.

QUESTIONER: Clearly, there’s a preference for multilateral sanctions in terms of producing results. Given the problems we’ve had recently with some sanctions regimes through the U.N., is the U.N. still the best forum for pursuing multilateral sanctions, especially given your mention of China and Russia? And that’s the one place where we have them seated at the same table and can get them locked in.

Dr. BERGSTEN: I think the U.N. still is the preferred place because, as our studies clearly indicate, the broader the net of countries applying the sanctions, the better the prospect for success. But certainly, there are cases where regional efforts may pay off. I’ve done a lot of work with APEC. It may seem a far stretch, but we might, in some cases, be able to get APEC to work together in Asia. The OAS did for a period work together against Castro when it was clear that there was a threat to security in the hemisphere from Cuba. I’d go wherever the action looks most likely to succeed. I certainly would continue to try the U.N., but in a world where we have proliferating regional arrangements of increasing importance in a lot of areas, particularly the economic area, I’d certainly look to them as a possible adjunct.

Dr. GELB: Thank you. All the way in the rear, please.

QUESTIONER: I’ve been paroled to the private sector since. None of you have, understandably, wanted to say much about the domestic aspect of the sanctions question, which seems to be one of its unique foreign policy components. As a good Wilsonian, an earnest one, wants to do good things in the world, how’s it possible to square a policy whose objective is to seize high moral ground internationally with something that our allies are increasingly viewing cynically as something seeking perhaps a lower domestic political ground in terms of appeasing or placating or one of the other P-words that one might use to associate with a profession even older than politics?

Dr. GELB: Gordon.

Sen. TORRICELLI: I think what I respect most about that question was its objectivity and how it was presented. You know, it is a frustrated person who will seek to have the policy of a democracy designed without reference to its internal politics. That isn’t going to happen and maybe it never should. There is no question that American policy towards Cuba, as American policy toward the Middle East and every other region of the world, is affected by either internal political pressures or economic pressures. In our system, I don’t think that should be seen as a frustration or a failure. It is an inevitable part of what makes the process, in the final analysis, work and I don’t regret it.

I simply, though, want to go back somewhat to the previous point. In pointing out that when we talk about these economic sanctions, they are not all the same and they are not always applied the same. No one is prescribing that what we do for Cuba, because of human rights abuses, should be the same that we apply to China. Our leverage is different, the geography is different and so our prescription is very different.

With China, in my mind, it is enough to ensure that the technology for intercontinental ballistic missiles does not flow to China as part of their satellite program. With Cuba, our leverage is greater and, therefore, the policy is different. And on this question—the previous question is, well, about multilateralism or the United States going it alone, let’s recognize this, too. I’ve often argued to our friends in Europe: If Cuba were an island in the Mediterranean, we would have had multilateral sanctions a long time ago. The French and the Italians and the British would have tolerated a dictatorship with no elections and no free speech for about six months before we would have united in a great international effort. All nations, for a variety of historic reasons, are not weighed the same. And so if we, in our unique position as a great power in the Americas, has to apply this unilaterally, that may be the way it is, but that doesn’t mean it isn’t right or that we shouldn’t do it.

Dr. GELB: Thank you. One last question. We’ll try to conclude five past, which will give us one hour, and time for our debaters to make concluding remarks. One last question. Here, please.

QUESTIONER: I’m a journalist. Agreeing with everything you’ve said about the importance of sanctions and the importance of human rights as a standard for American foreign policy, at the moment Cuba has been admitted to the status of an observer in the Africa-Caribbean -Pacific group of countries that the European Union will be discussing the Lome convention with. The British have told the U.S. that they are going to put very tough new human rights standards on the agreement. Washington has been trying to persuade the Europeans not to let Cuba in. But if sanctions are part of the policy, isn’t negotiation using a carrot as part of the stick policy? Wouldn’t that be a useful thing to get very tough standards for human rights? And then if they didn’t meet them, perhaps we’d have multilateral sanctions against Cuba. Why don’t we support this?

Sen. TORRICELLI: If I achieve nothing else here tonight, let me do this. Let’s understand the Cuban Democracy Act and American policy towards Cuba as it is written, not as is portrayed in the media. The Cuban Democracy Act was a decision in 1992 that I made with my colleagues to bifurcate American policy towards Cuba on a twin track. That is, to make the embargo real, put the Cuban economy into a downward spiral, to create tension between Castro and the military and political leadership of Cuba, making one thing clear to those who surround Castro: If you continue with the human rights violations and no elections, nothing is possible. And this will go on as far as it can be. We’re passing this policy not just to the Republicans, but Republicans and Democrats. Its author is a liberal Democrat. It is over. You have united American policy. But the power to change it is entirely in your hands.

Under the Cuban Democracy Act, if Fidel Castro does not hold an election but schedules an election, the policy changes. This is all in Castro’s hands. Authorize a free newspaper, authorize a political party, schedule an election at the municipal level, not even the national election, and this policy begins to change. If the Europeans believe that they can engage with Fidel Castro in a policy of concession leading to concession, I hope they succeed. That has been our policy for four years, and so far Fidel Castro has not taken the bait. But the bait remains on the plate. If he wants to take it, everything’s possible.

Dr. GELB: Thank you. Let me ask you to make brief concluding remarks, no more than two minutes, and, if you would, to address in these remarks this question. If I hear you right, you both feel that economic sanctions is a blunt instrument, that you wish there were better ways of doing the job. Now is it possible to think of one of these better ways as going more directly after the leadership of these countries, say, through their bank accounts and assets overseas? Is this at all feasible to do? Can we find something other than a blunt instrument to change regimes without, essentially, making the populace as a whole suffer over a long stretch?

Dr. BERGSTEN: I think the simple answer to that is yes, in some cases. It has been done in a few cases. Our studies show that financial sanctions always tend to work better than trade sanctions, and that is a promising way to go. It’s, in fact, part of the wrap-up remarks I wanted to make. The senator and I have agreed that sanctions can be useful. He thinks they’re useful a lot more than I do. He thinks unilateral sanctions have virtues that I disagree with, because I just think they’re ineffectual, and that’s not a way for a great power to carry on its foreign policy.

But I do think the tool is reformable. I think we can put in place a three-step process that will really turn it into something useful, and it would include the kind of option you talk about. First, we really need to have in mind a systematic list of alternatives for that middle course, when we want to escalate from doing nothing but not go to war, with which I certainly agree with the senator. There are lots of things you can do instead of turning almost mindlessly to sanctions, as both executive branches and Congresses have now tended to do increasingly for 20 years, and that’s why they don’t work.

So we want to put together an elaborate matrix of alternatives and look at it every time a problem country comes on to the radar screen. Second, we want a careful process within the administration, within the Congress, to look at those alternatives, to do serious cost-benefit analysis, which is doable, and it’s usually not such a great rush, because once these things are put in place, they stay for a while. A little aforethought is highly desirable. And then, finally, the real substance of it, look at the specific lessons of history. Look at why sanctions have worked in many cases and not worked in others. Target the objective. Target countries which are vulnerable in both economic and political terms. Hit quickly, decisively and comprehensively.

Our studies show that ratcheting it up is a big mistake and usually tends to fail. If you’re going to do it, do it quickly, do it strongly, do it with multilateral support, because of the other pieces of the matrix that I’ve outlined. And then you may have a useful policy tool that the senator and I can agree on when we come back here five years from now.

Sen. TORRICELLI: Thank you very much. Can’t wait. It is, I think, important to be realistic about American leverage in coming years. Without the discipline of the Cold War, it is increasingly unrealistic, as nations seek their own economic opportunities and do not feel directly threatened with their own security, that they’re going to join the United States and international regimes to defend things like human rights and sovereignty, to prevent genocide. Only a few nations are going to feel that they have the economic luxury or the moral standing to undertake that cause. Sometimes we may be alone. It shouldn’t bother us. It should be something we’re proud of. It also doesn’t mean it can’t succeed.

The way history has evolved in our generation, the United States is in an almost unprecedented set of circumstances, controls certain technologies, means of communication, but most importantly, legitimacy. If I hear one complaint as you travel the world, from the Colombians who complain about our drug certification, to the Russians who complain about our human rights certification, it is, `Who appointed the Americans the arbiters?’ Nobody. But history has evolved where the United States government has a unique credibility. It matters not only internally, but it is of concern to despots and dictators if they are even unilaterally identified by the United States government as being abusers of their rights or international threat.

They may argue it’s not fair. They may argue it’s not right. They may question how we came to this position. But we have. And if it is a power that we do not use, we will regret it. This may be a blunt instrument, but it is the most effective alternative there has been since 1919 when we were in a consensus to avoid international conflicts for conflict avoidance. Sanctions are conflict avoidance. They will not always succeed and sometimes may escalate to war, but they should always, always be tried.

And if it costs us economically, then we should simply be grateful, as a nation with a standard of living, an economy without peer in the world, that we’ve come to a position of power where we can afford to spend our capital for something as good and as great as human rights and democratization and peace.

Dr. GELB: Thank you. All of you are invited downstairs for cocktails. Many of you will be staying on afterwards for the dinner, where we’ll continue to hear our colleagues broach some of these questions in even greater depth. I think what the conversation has shown thus far is that senators can in just a few minutes be very succinct and sharp.

Sen. TORRICELLI: It was painful.

Dr. GELB: You never broke a sweat. And if you stay on, you’ll continue to hear Fred quote the papal authority on behalf of the Institute for International Economic Studies.

Dr. BERGSTEN: There we go. Thank you.

Dr. GELB: Thank you both very much.

Sen. TORRICELLI: Thank you very much. Enjoyed it.