Nuke Tests Rattle Anti-Sanction Push

WASHINGTON — India’s nuclear tests could not possibly have come at a worse time for the Clinton administration.

Why? Because Monday’s three underground blasts point to the need for imposing economic sanctions on India, just when the White House was preparing to argue that such penalties are employed too often as a tool of American foreign policy.

For months now, a quiet campaign against the use of economic sanctions has been gaining strength in Washington. This movement, led by the American business community, has been spreading the notion that the United States should back off from trying to use economic leverage in dealing with other countries.

A lobbying group called “USA Engage,” a coalition of 670 American companies, has been arguing that unilateral U.S. sanctions do not work and are too expensive for American business, causing firms to lose contracts overseas.

American companies have been urging Congress to lift economic sanctions even on the most repugnant of regimes--such as the military government in Myanmar, which continues to keep Nobel Peace Prize winner Aung San Suu Kyi in seclusion eight years after she and her party won the country’s only democratic election.

This recent campaign has had considerable success. Congress has begun to conduct hearings questioning the effectiveness of U.S. sanctions. At the State Department, Undersecretary of State Stuart E. Eizenstat has set up a special team to investigate the effectiveness of sanctions around the world.

President Clinton seemed to be joining the anti-sanctions movement. Two weeks ago, he voiced some criticism of Congress for passing “automatic sanctions” aimed at Iran and Cuba, efforts that he said hampered his ability to conduct foreign policy.

This week, Clinton will attend the Group of Eight economic meetings with leaders of the world’s leading industrial nations in Great Britain. He is likely to lift the threat of U.S. economic sanctions against European firms that invest in Iran.

White House Press Secretary Mike McCurry told a breakfast meeting of Times reporters this week that the U.S. is “unique” in its willingness to impose economic sanctions.

“Most of those other industrialized nations . . . don’t believe in using economic power as a lever in diplomacy the way we do,” McCurry observed. The White House spokesman appeared to be echoing the American business community’s main argument: that sanctions mean the loss of business to other countries.

These remarks by McCurry were made Monday morning, only a couple of hours before news of India’s nuclear tests reached Washington. The Indian tests, however, underscore the fact that sometimes, economic sanctions can be an important and justifiable tool of U.S. foreign policy.

In 1994, Congress passed a law called the Nuclear Proliferation Prevention Act. It requires the president to impose a series of economic sanctions on any country outside the five declared nuclear powers (the United States, Russia, France, Britain and China) that is found to have conducted a nuclear test.

Among those sanctions is a prohibition on bank credits and loans. In addition, the U.S. is required to oppose any aid or loans to such nations by the International Monetary Fund or the World Bank, the two leading institutions of international finance.

Although the United States is the leading shareholder in both organizations, it cannot shut off international lending by the IMF or the World Bank unless it is supported by other governments with large voting shares, such as Japan. In the case of the Indian nuclear tests, it seems likely that Japan, the world’s staunchest opponent of nuclear weapons, might join in a move to cut off international lending.

“Japan is going to be the first country to act [against India],” one Clinton administration official said Tuesday.

The 1994 law puts Clinton in an awkward position. If he imposes sanctions, he will probably feed India’s chronic sense that it is treated unfairly by the United States and that our foreign policy is skewed in favor of China.

Indian leaders will no doubt point out that in 1994, Clinton backed away from curbing China’s trade privileges in the United States. For their part, U.S. companies may argue that imposing sanctions against India will mean a loss of jobs and contracts.

But look at the arguments for sanctions. First, the law passed by Congress is so clear that it seems to leave Clinton with no choice. Second, imposing sanctions on India might help deter Pakistan, or other countries, from following New Delhi’s lead by conducting their own nuclear tests.

And finally, the new Indian government has clearly defied years of appeals by the United States, including a specific warning in 1995 that sanctions would be imposed if it carried out a nuclear test.

“Sanctions will have to be imposed if the United States is to be considered serious about nonproliferation,” said Bates Gill, an arms control specialist at the Monterey Institute of International Studies.

There are cases where economic sanctions make sense. This would appear to be one of them.