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Jul 11, 2014

The Case for Caution on Unilateral Sanctions


Executive Vice President and Head of International Affairs

Bloomberg_Russia_Ukraine_Flags_800px.jpg

Russia and Ukraine flags.
Russia and Ukraine flags.
Photographer: Vincent Mundy/Bloomberg.


On Wednesday, the Senate Foreign Relations Committee convened a hearing entitled "Russia and Developments in Ukraine." While all participants expressed serious concerns about events in Ukraine and Russia, senators from both parties joined with administration representatives to express caution about the dubious effectiveness of unilateral sanctions.

Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland cautioned all parties to make sure that "whatever we put forward [with regard to sanctions] doesn't disadvantage U.S. companies vis-a-vis others and that it will be effective... We would not want to be in a situation of denying our companies and having Europeans backfill."

Senator Tim Kaine (D-VA) said that the imposition of unilateral sanctions "opens up opportunities for European businesses to take the business we're doing; we at least have to grapple with that kind of cost-benefit equation moving forward."

Senator Jeff Flake (R-AZ) commented that "sanctions are more effective, in other areas of the world as well, when they are multilateral, not unilateral... It is far more effective if we work hand in glove with Europe."

The U.S. Chamber of Commerce agrees. We are deeply concerned by events in Ukraine and Russia. In no way do we condone Russia's actions, but we respectfully oppose legislative proposals to impose unilateral economic sanctions on Russia.

We believe history has shown that unilateral sanctions consistently fail to achieve their intended objectives, which is why many leaders of both parties have expressed a principled opposition to these measures as a tool of American foreign policy.

U.S. unilateral sanctions will have no meaningful impact on Russian policy as trade with the United States accounts for less than 5% of Russia's international commerce. The Ukrainian people would see no benefit; the only effect of such sanctions would be to bar U.S. companies from the Russian market and cede business opportunities to firms from other countries. The result would be lost sales for U.S. firms and lost jobs for American workers.

We understand the impulse to act. However, actions that are certain to be ineffective--doing nothing to promote stability while nonetheless costing American jobs--should be rejected.

Moreover, while European companies have a significant footprint in Russia, the risk of backfill by firms based in other countries is equally significant. Companies from China, Japan, Korea, Turkey and elsewhere are major players in the Russian market.

The most effective long-term solution to the crisis in Ukraine is certainly through a multilateral approach based on diplomacy to ensure Russia complies with international norms. Our partners abroad--including those in Europe but elsewhere as well--have an obligation to work with us to develop such a strategy. We look forward to working with the administration and Congress to promote real solutions to this conflict.

About the Author

Executive Vice President and Head of International Affairs

Myron Brilliant, executive vice president and head of International Affairs at the U.S. Chamber of Commerce, drives the global business strategy of the organization.

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