A Corporate Coup d’Etat

Don’t look now, but over the past six weeks, we’ve quietly entered a new era for U.S. foreign policy. A decade after the end of the Cold War, we now have the Corporate Peace.

Since mid-May, the American business community has won a breathtaking series of victories in Washington, stripping away the sanctions that have somewhat limited its overseas operations. In all of these cases, corporate America has finally achieved foreign policy goals that it had been pursuing for at least a decade, and sometimes for much longer.

Each of the recent victories has been significant on its own. But the broader, epochal nature of the change becomes evident when we put these seemingly disparate events together.

Look what’s happened in less than two months:

* Last week, the House Republican leadership agreed to ease the U.S. trade embargo against Cuba by allowing some American food and medicine to be sold there. It was the first sign that the Cuba embargo, which has been in effect since 1962, may eventually be lifted.

* On June 19, the Supreme Court ruled that states and cities may not boycott companies that do business in Myanmar, formerly known as Burma. That decision was the first time the court has imposed limits on sanctions by state and local governments, which began to spread in the 1980s as part of the grass-roots movement against South Africa’s apartheid regime.

* On May 24, the House voted to make permanent China’s normal trading rights in the United States--thereby ending the annual battles over China’s trade status that have occupied Congress every summer since 1990.

* Two weeks ago, the Clinton administration announced it would lift economic sanctions against North Korea that have been on the books since the early 1950s.

And there may be additional moves in the same direction. The House bill on Cuba also would lift sanctions on food and medicine to Libya, Iran and Sudan. The Clinton administration is said to be thinking of further easing sanctions against Sudan after the November elections.

These changes are not taking place by accident. Rather, they are the result of a well-organized campaign by the American business community against the use of sanctions as a tool of U.S. foreign policy.

In 1996, several leading American companies banded together to found USA*Engage, a Washington organization through which corporate America has spearheaded the opposition to sanctions.

“We engaged the academic community and think tanks. We engaged nontraditional business allies ranging from religious and humanitarian organizations to human rights groups. We engaged the Congress and Clinton administration,” recalled USA*Engage Chairman William Lane, the head of Caterpillar’s Washington office, in a speech two weeks ago.

That work--and, more important, the sheer financial clout of the 670 American companies that have joined USA*Engage--brought results. Corporate America now has greater influence over U.S. foreign policy than it has had for decades.

To see the remarkable extent of change, let’s flash back to 1983. On a visit to Beijing, Secretary of State George P. Shultz met with U.S. business representatives, who griped about Reagan administration curbs on exports to China. Japan and Germany were much more accommodating to commerce, they said.

Shultz angrily told them off. “Why don’t you move to Japan or West Europe?” he shot back. The U.S. government, he said, had sound policy reasons for its restrictions. His message: You take care of business, and we’ll take care of government.

By 1994, when Secretary of State Warren Christopher had a strikingly similar confrontation with U.S. business executives in Beijing, he was on the defensive. Corporate America had gained the upper hand. That year, the Clinton administration retreated from its attempt to impose conditions on China’s trade benefits.

Yet at that juncture, in the mid-1990s, China was the exception: It was too big and too important in the eyes of the American business community for sanctions to stick. Elsewhere, sanctions remained in place.

Now, six years later, the power that corporate America came to wield on China has extended to virtually every other area of U.S. foreign policy, from Cuba to North Korea to Sudan.

The interesting question is, what sort of U.S. policy will we get under the Corporate Peace? What sort of values will it promote?

The business community has argued incessantly that it stands for the liberal ideals and internationalism of Woodrow Wilson. “By encouraging trade and investment abroad, America . . . promotes values [of] political freedom, the rule of law and respect for human rights,” said Lane, the USA*Engage chairman.

It will be nice if he’s right, but so far, this is only unproven theory. What if trade doesn’t succeed in bringing political change to North Korea or Cuba or China?

Then the lifting of sanctions might eventually be justified, in troubling ways, by a form of isolationism: The world is a nasty place and America can’t change it, so why bother to try?

In that event, the new Corporate Peace would stand for values different from those of the America that fought nazism and communism in the 20th century. Our foreign policy has changed, but we don’t know for sure where we’re headed.