American Sanctions Against The Soviet Union From Nixon To Reagan

By Donald G Boudreau

This study has three main purposes. The first is to submit to critical review selected cases during the Nixon-Reagan administrations (those which received the most public attention) in which the United States Government has imposed economic, trade, or noneconomic sanctions against the Soviet Union for foreign policy purposes. The basic concepts, underlying assumptions, logic, and supporting evidence are all reviewed. Dr. Boudreau argues that given the nuclear arsenals of the two superpowers, alternatives short of military action are particularly crucial, and that the international signaling function provided by sanctions can assist in maintaining international peace and security. He contends that the standards of evaluation commonly applied are mistaken because they neglect an essential aspect of sanctions: their signaling effects. The second purpose is to present a discussion of the pros and cons of United States sanctions toward the Soviet Union with a view toward dispelling some of the criticisms concerning their ineffectiveness by pointing to neglected, but crucial goals, and attainment of sanctions. The third purpose is to shed light on a number of common issues, allowing a fuller policy debate, and offering general conclusions which (notwithstanding substantial differences in the selected cases) can be applied constructively in the future. Dr. Boudreau’s thesis is that American Presidents and the United States Government have attained some foreign policy objectives through such techniques, and that in viewing them as useful tools, will continue employing them in the future under certain circumstances.

• Language: English
• Publisher: Donald G Boudreau
• Release date: Aug 10, 2012
• ISBN: 9781476225081

Donald G Boudreau

Dr. Donald G. Boudreau is an internationally recognized expert in the field of economic statecraft. He is also the author of the books, “American Business and Daytime Dramas,” “American Sanctions Against The Soviet Union: From Nixon To Reagan,” and "Resistance in the Gulag Archipelago (1918-1956)." Retired from Federal Government service, for nearly three decades, he held various United States Government appointments with the U.S. Postal Service, U.S. Department of Housing and Urban Development, U.S. Department of the Treasury, U.S. Department of Energy, and finally and extensively, with the U.S. Department of Defense. He holds the Ph.D. degree in International Relations from the Graduate Institute of International and Development Studies at The University of Geneva, Switzerland, a Master of Public Administration (M.P.A.) degree with specialization in public management from Rutgers – The State University of New Jersey, and a B.A. degree in Political Science from Montclair State University in Upper Montclair, New Jersey, with Pi Gamma Mu and Pi Sigma Alpha honorary, the National Social Science and Political Science Honor Societies, respectively. Dr. Boudreau served as Rutgers University’s premier Presidential Management Intern as a member of the first class of the Program (1978-80), having been nominated by Rutgers University and selected for such by the then U.S. Civil Service Commission in Washington, DC. The Presidential Management Intern Program (now, the United States Government’s Presidential Management Fellows Program) is a program “designed to attract to Federal service men and women of exceptional management potential who have special training in planning and managing public programs.” Formerly, he served as assistant business administrator for the Town of Irvington, New Jersey. Dr. Boudreau is the recipient of, including among other awards received during his distinguished Federal Government career, the Office of the Secretary of Defense Award for Excellence, a U. S. Treasury Department Sustained Superior Performance Award, and numerous other U.S. Department of Energy and U.S. Department of Defense performance awards. He moreover, while pursuing his doctoral studies at the Graduate Institute of International and Development Studies (“the Institute”) at the University of Geneva, Switzerland, was competitively and jointly awarded by the Institute and the U.N. Centre For Human Rights, an Hautes Etudes Internationales Graduate Internship in International Organization that he successfully served with the United Nations Centre for Human Rights at the European Headquarters of the United Nations at the Palais des Nations in Geneva, Switzerland. Dr. Boudreau’s articles on various foreign policy and national security subjects have appeared in the journals, World Affairs, Strategic Review, The International Journal On World Peace, European Security, Diplomacy & Statecraft, International Peacekeeping, and Strategic Analysis (New Delhi). He and his wife, Zoraida de, and their children reside in Fredericksburg, Virginia.

Book preview

AMERICAN SANCTIONS AGAINST THE SOVIET UNION

FROM NIXON TO REAGAN

By Donald G. Boudreau, PhD, MPA

First Smashwords Edition, 2012

Copyright 2012 by Donald G. Boudreau

Published by Smashwords

Smashwords Edition, License Notes

This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each person you share it with. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then you should return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

Cover by Joleene Naylor

* * * * * * * * * *

CONTENTS:

Preface and Acknowledgements

Introduction

The Literature on American Sanctions Imposed Against the Soviet Union

The Nixon Administrationand the Rise and Fall of Détente 1969 - 1974

The Ford Administration: Transition and Continuity (1974 – 1977)

The Carter Administration: Human Rights and Soviet Expansionism (1977 – 1981)

The Reagan Administration: Dealing With an Evil Empire (1981-1983)

Sanctions as Political Statements: Symbols are Important

Unilateral Sanctions: Going it Alone

The Influence of National Political Considerations and Compensation for Losses to Affected U.S. Industries

Lifting Sanctions

Conclusions: Guidelines for Future Policy

Chapter Notes

Selected Bibliography

The Author

* * * * * * * * * *

DEDICATION

To my wife Sordi

The Bard said it best…

better lo’ed ye canna be

* * * * * * * * * *

"In the end, however, the public judges a foreign policy as it judges any other policy-by its results."

- William Schneider

* SOURCE: Public Opinion in Joseph S. Nye, ed., The Making of America’s Soviet Policy (New Haven: Yale University Press, 1984):34.

* * * * * * * * * *

PREFACE AND ACKNOWLEDGEMENTS

Pinpointing the inspiration for this book is easy. It was born in the harsh winter of 1980 shortly after my arrival in Washington, D.C., in acceptance of a position with the U.S. Treasury Department. During 1981 through 1986, my work with the Office of Foreign Assets Control in the Office of the Secretary of the Treasury involved assisting in the administration and enforcement of the U.S. Government’s programs of economic, financial, and trade sanctions against selected foreign countries. These included: Iran, Cuba, North Korea, Viet Nam, Cambodia (Kampuchea), South Africa, Nicaragua, and Libya.

These programs are administered under the authority of presidential emergency powers pursuant to the Trading with the Enemy Act (1) [of 1917 as amended], the International Emergency Economic Powers Act (2) [of 1979 as amended], and other related statutes. While these various embargo controls and blocked assets controls (the latter applicable to certain of the aforementioned countries) are an important expression of United States’ foreign policy and national security considerations, they do not involve the direct imposition of sanctions against the country’s major potential adversary in the world today, the Soviet Union.

Given the special relationship between the United States and the Soviet Union, U.S. sanctions against that country appeared to be generally administered on an ad-hoc, case-by-case basis by several departments and agencies rather than, as art of an ongoing program administered by one entity. In attempting to satisfy my curiosity regarding this particular phenomenon of the superpower relationship, I began in 1981 to search the holdings of the Library of Congress, without success, for a contemporary study on American sanctions imposed against the Soviet Union. This study is, to great extent, a product of that frustrating search.

Sanctioning, be it economic*, diplomatic, trade or financial, remains a highly debated topic on the national and international planes. In recent years, the effectiveness and utility of sanctions have been debated by presidents and prime ministers, legislatures, by NATO, the Western Alliance, and the European Economic Community. Nor have sanctions escaped the attention of that most international of international organizations, the United Nations (particularly, regarding the cases of Southern Rhodesia and South Africa). Yet, the debate on the use and efficiency of sanctions takes on a new dimension when cast in the superpower relationship of the United States and the Soviet Union. Today, given the intrinsic danger of international incidents sparking a possible military confrontation between Those two countries-sanctions-weighed against their alternatives—remain viable options on the continuum for policy makers in the Executive Branch and the U.S. Congress, in time of international tension and crisis.

As this study demonstrates, there are manifold reasons as to why the United States Government might rationally choose to employ sanctions against a foreign country. For example, they may provide means by which the Government can express its intense diplomatic dissatisfaction regarding certain of the target nation’s policies or actions. They can also be designed for the purpose of sending various political messages to the target regarding the former’s views, intentions, and future actions.

Sanctions may also be designed to stiffen the backs of third parties in the target nation and/or in third nations: persons allegedly being injured by certain governmental policies and actions. Alternatively, sanctions might serve to lay down a marker to the target nation: specifically warning it of the ramifications should it choose or otherwise dare to cross the marker. More difficult, of course, sanctions can also serve to persuade the target to change certain of its internal policies or possibly, even aspects of its international behavior. They can also be constructed with a view toward inflicting economic damage on a nation and its economy for foreign policy or national security reasons. The argument in this book does not, however, necessarily suggest that increased use of economic sanctions is desirable. This is a study on United States sanctions from a U.S. Foreign policy perspective. It is designed to test several propositions regarding the efficiency of contemporary American sanctions imposed against the Soviet Union in selected cases during four recent Presidential administrations. While it borrows heavily from the theoretical framework employed by Dr. David A. Baldwin (1985) in Economic Statecraft, it is distinctively not a study about economic sanctions in general. The orientation of this study is American, in the sense that it attempts to identify the various targets and goals of United States sanctions in selected cases, and to make some judgments regarding their efficiency relative to their stated and unstated goals and targets. These cases were selected given that they were the cases which received the most public attention.

The research and writing associated with this endeavor reflect the influence, assistance, inspiration, and support of many people. A very special debt of gratitude is owed to Dr. Leon Gordenker, Professor of International Organization and Director for the Centre for Research on International Institutions in Geneva, Switzerland, who served as director of my doctoral dissertation. Professor Gordenker reviewed countless drafts and provided invaluable support, guidance, and constructive suggestions throughout.

His combined gifts of patience, tolerance, understanding (and humoring the author) made this work possible. The 19th century essayist Ralph Waldo Emerson once said that [O]ur chief want in life is somebody who shall make us do what we can. Dr. Gordenker would rightly take exception to the word make in this regard. Yet he has nevertheless, strongly encouraged me here to do what I can, for which I remain grateful. Above all, I thank him for impressing upon me the view that a scholar’s most important obligation is to speak the truth as he or she believes it to be (and be able to support it).

Dr. Gerard Curzon, Professor of International Economics, also of the Graduate Institute of International Studies, served admirably as co-director of the dissertation and president of the jury during its defense. Professor Curzon consistently drew my attention to the policy implications underlying the economic drawings on the Institute’s blackboards. Through his assistance, I acquired a deeper understanding of international economics and the indisputable fact that sanctions are hard decisions which can carry a heavy moral responsibility.

Both were members of my supervisory doctoral committee as was Professor Dr. Pierre Allan of the Department of Political Science of the Faculty of Economic and Social Sciences, University of Geneva, who performed an invaluable role as a very astute external reviewer. For his helpful comments and suggestions on the manuscript special thanks is also owed to the noted Egyptian jurist, Dr. Georges Abi-Saab, Professor of International Law at the Graduate Institute of International Studies. For serving as co-examiner during my major doctoral examination in International Politics, I thank Dr. Karl M. Meessen, Professor of International Law, also of the Graduate Institute. Individually and collectively, they were inspiring and influential teachers.

I am deeply grateful to Dr. Michael P. Malloy, Professor of Law, Fordham University School of Law, New York City, and to George L. Sherry, the Stuart Chevalier Professor of Diplomacy and World Affairs, Occidental College, Los Angeles, California, for their friendship and support, wise counsel, and helpful comments on earlier versions of the manuscript. They are, of course, blameless for any flaws that may remain. To my former colleague and dear friend, Richard j. Hollas, Chief of Enforcement of the Office of Foreign Assets Control, Office of the secretary, U.S. Department of the Treasury, my appreciation for having allowed me to benefit over the years from his lifelong expertise in American economic sanctions.

For information provided, I thank The White House; the Library of Congress; United States Senators Bill Bradley and Robert Dole; Speaker of the U.S. House of Representatives, Jim Wright; Director of the Congressional Research Service, Joseph E. Ross; Mike Donnelly, Congressional Research Service; Robert H. Brumley, Esquire, Acting General Counsel of the U.S. Department of Commerce; Amy Rothstein, Wendy Wrubel, and Mary Nell DeVaughn, Office of the General Counsel, U.S. Department of Commerce; Dr. Susanne S. Lotarski, Director, Office of Eastern Europe and Soviet Affairs, International Trade Administration, U.S. Department of Commerce; Vivian B. Whitehead, Historical Assistant, Agricultural and Rural History Section, Economic research Service, U.S. Department of Agriculture; Stephen G. Glazer, Esquire, Associate General Counsel, Export-Import Bank of the United States; Richard N. Cooper, the Marits C. Boas Professor of International Economics, Harvard University; The National Conference on Soviet Jewry, New York; Miriam Weiss, Department of Information, The Embassy of Israel, Washington, DC; Lynette K. Hamblin, Government and Public Affairs Department, The British Petroleum Company p.l.c., London; Leroy Watson, Legislative Representative, The National Grange; Carl F. Schwensen, Executive Vice President, National Association of Wheat Growers; Elbert Harp, Executive Director, National Grain Sorghum Producers Association; P. Scott Shearer, Executive Director, National Corn Growers Association; Eun-Soo Kim, First Secretary, Permanent Mission of the Republic of Korea, Geneva; Robert C. Satrom, Esquire, Esquire, Cole & Deitz, New York City; Norman DesJardins, Records Control Officer, Office of Foreign Assets Control, Office of the Secretary, U.S. Department of the Treasury; the European University Institute, Florence, Italy; and, the Director General of the Intergovernmental Committee for Migration in Geneva, Switzerland. Without the indefatigable assistance of Mrs. Cam-Lai Nguyen, Main Librarian at the Graduate Institute of International Studies Library in Geneva, Switzerland, who processed many inter-library loan requests throughout Switzerland and Western Europe on my behalf, this work would not have been possible.

For their encouragement in this work, my thanks to Dr. Gene Sharp, President, and Dr. Ronald M. McCarthy, Research Coordinator, of the Albert Einstein Institution in Cambridge, Massachusetts, a non-profit organization which supports work on the strategic use of nonviolent sanctions in relations to problems of political violence. For her stellar assistance and unwavering support at the earliest stages of this project, a special thanks is due to Mrs. Arnette M. Rudolph. I also record here my cardinal appreciation to Dr. David A. Baldwin, Professor of Political Science, Institute of War and Peace Studies, Columbia University, New York University, for his words of encouragement in this research, and especially for successfully challenging in his seminal work Economic Statecraft the conventional view that economic tools of foreign policy do not work (Princeton University Press, 1985).

Sole responsibility for the arguments and conclusion contained herein, however, rests as always at my doorstep. Finally, this book is dedicated to my wife, Zoraida de, who has contributed to this work through her moral support, understanding and encouragement. Her impact upon my life and the completion of this book is incalculable.

D.G.B.

Institut Universitaire de

Hautes Etudes Internationales

Geneva, Switzerland 1989

* * *

*Margaret P. Doxey (1980) observes that [S]anctions are familiar conformity-defending instruments in national societies; in the social context they may be positive (rewards) or negative (punishments) but in legal systems they are penalties which designated authorities apply to law-breakers. Doxey, Margaret P. Economic Sanctions and International Enforcement (London: The Macmillan Press, 2d. ed., 1980), p. 3. Donald L. Losman (1973) defines economic sanctions as penalties, inflicted upon one or more states by one or more others, generally to coerce the target nation(s) to comply with certain norms that the boycott initiators deem proper or necessary. Losman, Donald L. International Economic Sanctions, The Cases of Cuba, Israel and Rhodesia (Albuquerque: University of New Mexico Press, 1979), p. 1. David A. Baldwin (1985) employs an intentionally broad concept of economic statecraft as if it must be if it is to subsume all of the economic means by which foreign policy makers might try to influence international actors. Baldwin, David A. Economic Statecraft (Princeton: Princeton University Press, 1985), p. 40. For purposes of this study, generally, an economic sanction is any action taken by a nation or international body which is intended to prevent, regulate or otherwise hinder economic activity with another nation for the purpose of condemning or influencing the latter’s actions or policies.

* * * * * * * * * *

PURPOSES OF THE STUDY

This study has three main purposes. The first is to submit to critical review selected cases during the Nixon-Reagan administrations in which the United States Government has imposed economic, trade, or noneconomic sanctions against the Soviet Union for foreign policy purposes. The basic concepts, underlying assumptions, logic, and supporting evidence are all reviewed. My thesis is that given the nuclear arsenals of the two superpowers, alternatives short of military action are particularly crucial and that the international signaling function provided by sanctions can assist in maintaining international peace and security. The writer argues that the standards of evaluation commonly applied are mistaken because they neglect an essential aspect of sanctions: their signaling effects.

The second purpose is to present a discussion on the pros and cons of United States sanctions toward the Soviet Union with a view toward dispelling some of the criticisms concerning their ineffectiveness by pointing to neglected, but crucial goals, and attainment of sanctions.

The third purpose is to shed light on a number of common issues, allowing a fuller policy debate, and offering general conclusions which (notwithstanding substantial differences in the selected cases) can be applied constructively in the future. These cases were selected since it was these cases which commanded the most public attention. My thesis is that American Presidents and the United States Government, despite conventional wisdom to the contrary, have attained some foreign policy objectives through such techniques and that in viewing them as useful tools will continue to apply them in the future under certain circumstances.

* * * * * * * * * *

STRUCTURE OF THE STUDY

How have United States’ sanctions imposed against the Soviet Union been viewed in the past? Have they not already been thoroughly analyzed and evaluated? A review of the literature later in Chapter 1 deals with such questions. Chapter 2 through 5 review selected cases in which recent U.S. Presidents have employed economic instruments of foreign policy in their dealings with the Soviet Union, and explain the measurable effects largely from the standpoint of American and other non-Soviet observers. Chapter 6 focuses on sanctions as political statements by U.S. Presidents assessing their symbolic value; Chapter 7 addresses the issue of unilaterally applied sanctions; and, Chapter 8 examines the influence of domestic political considerations on the sanctions formulation process and reviews the question of compensating affected U.S. industries for losses attributable to sanctions. Chapter 10 concludes with general policy lessons and guidelines for future sanctions policies derived from these case studies.

* * * * * * * * * *

LIMITS OF THE STUDY

It is important to clarify at the outset what this study does not address. First, it does not pretend to guide American policymakers as to the particular circumstances in which sanctions should be employed; such decisions by their very nature will always involve subjective elements in the decision-making process. The study does take into account American domestic political considerations and their influence on the sanctions formulation process. Domestic political costs and benefits are important factors in the decision maker’s calculus. Second, this is not an exercise designed for the purpose of second-guessing the decision to impose sanctions.

It is rather an attempt to determine whether the foreign policy objectives sought by the administrations were achieved given the policy contingency framework, and on what basis that belief rests. Thus, the central issue is whether economic sanctions in the context of the superpower relationship performs a valuable function in non-violent international signaling and will likely continue doing so in the future. A third limitation on this study arises from the case selection. A focus on these selected cases is useful for critically assessing the role which sanctions have played in the United States’ relationship with the Soviet Union; but it is not appropriate for generalizing about typical cases of economic sanctions. Such generalizations ideally should be based on the study of the entire universe of comparable cases or otherwise based on a random sampling of such cases. Nevertheless, these selected cases do reflect substantial American policies toward the Soviet Union. Given the greater ability of obtaining from non-Soviet sources, the perceptions of observers in the United States as to the effects of these sanctions on the Soviet Union, will be emphasized here.

Consequently, these cases of sanctions episodes reflect that there is an important emphasis on perceptions in Washington, DC. These were the major cases of American sanctions against the Soviet Union during these administrations since they received the greatest amount of attention from American observers.

* * * * * * * * * *

IMPLICATIONS

What difference does it make whether the United States Government believes it has attained foreign policy objectives vis-à-vis the Soviet Union through the use of sanctions? Or, that such U.S. sanctions have on occasion, imposed measurable costs on the Soviet Union? Given the unique nature of the superpower relationship, answers to these and related questions can assist in determining whether the utility of such techniques has been underestimated. Miscalculation regarding the probable utility of economic, trade, and noneconomic sanctions can lead to ill-informed policy recommendations finding their way onto the desk of the President of the United States. If certain tools of social science can assist in estimating the probable utility of such techniques, it could possibly lead to better informed policy recommendations involving a relationship in which issues are complex and stakes are at their highest. The writer thus argues that sanctions have had some usefulness within a broader context and that this method can help determine outcomes of application of sanctions in the future by giving policymakers a wider focus.

* * * * * * * * * *

INTRODUCTION

In every crisis, the West invents new excuses for why it would be inappropriate to interrupt economic relations, including the totally contradictory propositions that sanctions never work and sanctions are tantamount to an act of war -the last an especially dangerous legitimization of Soviet blackmail should economic sanctions ever prove unavoidable. 1

-Henry A. Kissinger (1985)

***

No U.S. government has been prepared to forswear the use of foreign export controls because there are cases, such as Afghanistan or Poland, when there is little else that can be done. As no government with international security responsibilities could comfortably stand by and watch in such instances, sanctions are seen to be the only means of indicating condemnation or having any possible influence on events. 2

-Stephen Woolcock (1982)

NINCIC AND WALLENSTEEN (1983), in Dilemmas of Economic Coercion: Sanctions in World Politics, observe that as the Cold war locked its protagonists into two rival military blocs, and as the potential costs of their confrontation grew, economic coercion became a less perilous manner of fighting the East-West conflict. 3 This study advances, among other things, the proposition that American sanctions imposed against the Soviet Union during recent administrations have, through the non-violent international signaling function provided by sanctions, made a valuable contribution to the maintenance of international peace and security.

Economic sanctions continue to be a hotly debated tool of international relations. Much attention has been focused on the United States Government’s use of sanctions in attempting to achieve foreign policy objectives vis-à-vis the Soviet Union. The U.S. grain embargoes and U.S. restrictions on the Soviet-European gas pipeline rekindled a heated international debate on the use of economic sanctions in pursuit of U.S. foreign policy goals. These and similar events have been the subject of journalistic and scholarly writing seriously questioning the effectiveness of such measures.

Are economic and noneconomic sanctions against the Soviet Union a useful instrument of U.S. foreign policy? Has the international signaling role played by sanctions been a stabilizing one in the superpower relationship and, if so, on what does that belief rest? These and related questions are a matter of increasing debate within the Western Alliance, particularly in light of President Reagan’s subsequently withdrawn decision in the latter part of 1983 to attempt to prohibit European licensees of U.S. companies from exporting technology to the Yamal gas pipeline to Western Europe.

In recent years, the United States has relied extensively upon the use of economic sanctions (and not just signals) as an instrument of its foreign policy toward among other countries, the Soviet Union, Iran, China, Cuba, North Korea, Viet-Nam, Cambodia (Kampuchea), Nicaragua, Libya, Panama, and South Africa as well as in some relatively minor cases such as the Dominican Republic or Uganda under Idi Amin.

With regard to the Soviet Union, what have been the specific objectives of the export controls employed by the United States and its allies? Nincic and Wallensteen (1983) contend that:

The purpose of U.S. controls of its exports (and those of its allies) to the Soviet Union has been to undermine Russia’s military capacity by depriving it of relevant military technology; controls however have also been designed to demonstrate distaste for Soviet communism, display toughness in Cold War sparring, and so forth. 4

Citing mounting evidence of an extensive military buildup; the U.S.S.R. invasion of Afghanistan; and its direct responsibility for the imposition of martial law in Poland, the U.S. Congressional Office of Technology Assessment in its 1983 report titled Technology and East-West Trade: An Update concludes in substance, that embargoes aimed at punishing the Soviet Union for actions in Afghanistan and Poland had no major impact on the Soviet union. 5 Moreover, the report noted that the embargoes created rifts in the Western Alliance, gave the United States an image as an unreliable supplier, caused economic hardship to companies trying to trade with the U.S.S.R., and increased U.S. farm surpluses as the U.S.S.R. switched to alternative grain suppliers. In this regard, this study will attempt in ascertaining the measurable economic effects of U.S. sanctions in selected cases as seen by American and other non-Soviet observers.

In spite of the Office of the Office of Technology Assessment’s 1983 report, it yet remains difficult to conceive of the United States Government abandoning the use of sanctions against the Soviet Union. These will form part of policy options on the continuum available to the President and/or the U.S. Congress in international emergency situations, short of resorting to direct military action. As Wallensteen (1983) argues:

In a world of increasing armaments and an abundance of armed conflicts, economic sanctions are of course preferable. However, military means probably continue to occupy the first place in strategic planning, and economic means only attract the same attention when their utility has been demonstrated and military action is ruled out by other