Trade Sanctions

The term trade sanctions refers to actions by which governments try to fulfill political or economic goals by using international trade as a policy instrument. Some other terms such as trade embargoes, boycotts, and economic sanctions are often used interchangeably and loosely to describe similar actions.

Sanctions are restrictions or policies directed very specifically at one country, or a group of countries, that attempt to restrict or even completely prevent trade or other economic interactions with that country. Restrictions may take the form of duties on imports from the sanctioned country that raise the cost of imports and may render that country uncompetitive, or they may take the form of complete ban on imports. Besides restrictions on imports, sanctions can be imposed on exports to the country and or on capital flows and investments between the two countries. In more extreme cases other forms of restrictions, for example, preventing a country from having economic interactions with third countries, can be used to achieve political goals. Sanctions may sometimes be imposed against a specific product such as arms or oil.

The purpose of imposing trade sanctions is to force the leaders of the sanctioned country to conform to the will of the sanction-imposing countries. Sanctions are seen as instruments that will impose economic costs on the targeted country and compel its ruling elite to bring about the desired changes. The most important sought-after change has been to bring about democratization of the regimes in the target countries. Trade sanctions are also imposed in response to a country's aggression against its neighbor(s). Other reasons for imposition of sanctions include nuclear proliferation, civil wars, violations of human rights, military coups, inability to control narcotics trade and distribution within the country, and support for international terrorism. It has also been argued that trade sanctions are sometimes imposed to serve the interests of particular interest groups within the sanctions-imposing countries that may wish to restrict imports into the country. International law permits use of sanctions to achieve certain goals because they do not involve the use of armed forces. Sanctions may be imposed by one country, or a number of countries may take the action together. Sanctions may be imposed under the aegis of an international body, such as the United Nations (UN), by an agreement between countries, or unilaterally by one country.

While economic warfare through sanctions is not a new idea, use of sanctions has increased during the past 50 years. According to one estimate, there were 62 acts of sanctions by the United States or the UN during the 1990s. Three examples of trade or economic sanctions during the past few decades help illustrate how trade sanctions work. The United States imposed trade and economic sanctions against Cuba starting in 1960 with the aim of bringing down the avidly anti-American regime led by Fidel Castro. Many countries joined together under the aegis of the UN to impose sanctions against the apartheid regime in South Africa in 1986. The UN was also used by some countries to impose trade sanctions against Iraq in 1990 in response to that country's invasion of Kuwait. These three examples highlight many aspects of trade sanctions as to their reasons, extent of the restrictions imposed, their effectiveness, and their consequences.

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