Statement by Secretary of Agriculture Dan Glickman Before the Senate Committee
on Foreign Relations Washington, D.C. -- May 11, 1999
                                
                                            Release No. 0206.99
                                
Statement
                                
                               by
             Secretary of Agriculture Dan Glickman
        Before the Senate Committee on Foreign Relations
                Washington, D.C. -- May 11, 1999


     "Mr. Chairman, members of the Committee, I am pleased to appear with
Bill Reinsch, Under Secretary of Commerce for Export Administration, to
discuss sanctions and their effects on U.S. agricultural trade.

Reform of U.S. Sanctions Policy

     "Mr. Chairman, two weeks ago, President Clinton announced that the
United States will exempt commercial sales of agricultural commodities and
products, medicine, and medical equipment from future unilateral economic
sanctions, unless the President finds that it is in the national interest to
include such items due to compelling circumstances.

     "This is a significant step toward revising U.S. unilateral economic
sanctions policy and it has important implications for American agriculture. 
While this new policy does not mean automatic approval of agricultural sales,
it does give U.S. producers and exporters an opportunity to compete in more
markets.

     "In addition, the new policy will extend to existing unilateral economic
sanctions to permit case-by-case review of specific proposals for commercial
sales.  Because under current policy conditioned sales of certain items are
already licensable for Iraq, North Korea, and Cuba, this change would affect
only Iran, Libya, and Sudan.

     "We are working to implement these changes as quickly as possible.  We
are developing licensing criteria to guide this case-by-case review.  These
criteria will be designed to ensure that sanctioned governments do not gain
unjustified or unwarranted benefits.  Sales must be at prevailing market
prices and sales generally will be restricted to non-government entities or
government procurement bodies not affiliated with the coercive organs of the
state.  However, sales to some quasi-governmental organizations could be
authorized provided they are not affiliated with coercive organizations.

     "This policy change will cover agricultural commodities and products,
medicine and medical equipment.  We are working with the Departments of State,
Commerce, and Treasury to develop precise definitions of the products to be
covered.
     "This important step toward sanctions reform should help boost U.S.
agricultural exports of bulk commodities such as wheat, corn, rice, and
vegetable oil.  We estimate that our producers may sell an additional 500,000
to 1 million tons in exports of both wheat and corn as a result of this change
in policy.  In addition, some of these countries were once major markets for
U.S. rice, and we hope our rice producers will re-capture some of these lost
sales.

     "For example, Iran, a nation of 60 to 70 million people, represents
about a $3-billion food market.  Two decades ago, with only about half its
current population, Iran was the biggest customer for American rice and one of
the biggest for American wheat.  Now our producers will have the opportunity
to recapture their share of that market.

Conclusion

     "Mr. Chairman, the Clinton Administration is committed to the reform of
U.S. sanctions policies.  We need to ensure that unilateral economic sanctions
are effective; that the costs to U.S. interests are minimized; and that they
contribute to U.S. foreign policy goals.

     "The changes we are discussing today follow through on the President's
belief that agricultural commodities and other human essentials should not be
used as instruments of foreign policy, absent compelling circumstances.  

     "When it comes to monitoring rogue nations and combating international
terrorism, we will continue to be as vigilant as ever.  But we have found too
often that sanctions on food and medicine have no influence on the behavior of
governing regimes.  Instead, they may harm citizens, who may be denied basic
tools of survival.

     "And, of course, sanctions can have a negative economic impact here at
home.  American agricultural export shares in these markets are frequently
captured by our global competitors.  Just as innocent people abroad should not
be punished for the policies of their governments, there is no reason why
American farmers should be punished either.

     "With farm prices still low and global demand still soft, this new
sanctions policy could not have come at a better time.  Our farmers are
hurting, and they deserve every opportunity to reach out to as many potential
consumers as possible around the world.  They produce the very best food that
the world has to offer, and we cannot afford to handicap them by ceding
potentially lucrative markets to our global competitors.

     "Mr. Chairman, that completes my statement.  I will be happy to answer
any questions."