U.S. Eases Sanctions Against Haiti : Embargo: Bush bows to pressure from American businesses, angering OAS leaders.

The Bush Administration, reacting Tuesday to intense pressure from American businesses and a negative public relations image, relaxed the severe economic embargo imposed on Haiti after the military overthrow of this nation’s first democratically elected president.

State Department spokeswoman Margaret Tutwiler said in Washington that American businesses that assemble a range of products in Haitian factories will be able to apply for permission to export raw materials to Haiti and bring them back as finished goods.

The Bush Administration described the policy shift, which could affect 44 factories and as many as 40,000 workers directly, as a humanitarian effort to ease the severe harm that the embargo has had on largely poor workers who took no part in the Sept. 30 coup against President Jean-Bertrand Aristide.

“Our information,” Tutwiler’s briefing paper said, “is that the sanctions on the assembly sector largely affect innocent Haitians and have no serious impact on those behind the coup.”

Her announcement came despite intense opposition to the move by the Organization of American States, which had recommended strong sanctions immediately after the overthrow of Aristide. OAS Secretary General Joao Baena Soares had argued that any U.S. relaxation of the embargo, imposed Oct. 29, would be seen by the Haitian military and its civilian puppets as a sign of weakness.

While the embargo has harmed Haiti’s poor and middle class, other officials say this had been anticipated and was intended as a hard-nosed tactic. But what was unforeseen was the public outrage in America and elsewhere when it became clear that the punishing sanctions were destroying Haiti’s poor and middle class without hurting the military and its civilian backers. Nor was it having any meaningful effect on forcing Aristide’s return.

Further, other officials said, earlier assurances to American business interests in Haiti that the embargo would force the usurping Haitian authorities to give in quickly have failed. “The pressure was intense to permit the plants to start up again,” said one official in Washington. “These are powerful and wealthy businessmen, and this is an election year.”

These sources, as well as other diplomats, ridiculed Tutwiler’s assertion that the relaxation of the embargo was a fine-tuning of U.S. sanctions against Haiti; they criticized her parallel announcement that the Administration was investigating ways to more directly punish those who carried out or financed the coup, possibly by blocking their bank accounts and targeting their other assets in the United States.

“All any of the army will see is that, if they stay tough, Washington will give in. It strengthens their belief that the Americans really don’t want Aristide to return anyway,” said one Haitian political expert, who added: “As for the individual punishment, that’s a laugh. If they already hadn’t taken their money out of the U.S., they certainly will now.”

Tutwiler said only that any decisions on actions against the coup instigators and supporters will be made soon but “I can’t give you any precise date.”

U.S. officials argued that Tuesday’s policy change was justified, claiming that moderate Haitian leaders, such as Rene Theodore--considered a key player in arranging for Aristide’s ultimate return--believe that Tuesday’s decision strengthens their position.

Others also argued for the policy shift, contending that the embargo was always meant as one of many approaches to returning Haiti to democracy; the point wasn’t “to force a settlement at any cost, particularly the destruction of the Haiti economy and people,” one official said. He also scoffed at OAS opposition, saying, “It is easy to call for sanctions, even an invasion. But the United States is always the one that has to pay the cost and clean up the mess.”

Tutwiler said the total number of Haitians benefiting from resumed assembly work could be 280,000 people, because each laborer has six or seven dependents.

But others said it is uncertain that all the jobs can be saved. John Baker, a Haitian who heads an association of assembly operators here, said many plants have shipped machinery to other countries and “I don’t know how many want to come back now, since it is still unstable.”

Still--despite the low wages of the factories, which paid only $3 a day when they last operated--any resumption of work will benefit this country’s poor workers. Although there are a few public construction projects, non-government jobs represent almost 90% of Haitian employment, experts say.

Times staff writer Norman Kempster in Washington contributed to this story.