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Sarah Stephens

Sarah Stephens

Posted: October 22, 2010 01:44 PM

Embargoes

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On October 19, 1960 President Eisenhower put in place an embargo against Cuba that has lasted to this day. Fifty years later, the Obama administration is enforcing these sanctions in some high profile areas with greater vigor than even the Bush administration.

Now we're learning that while the United States likes to impose embargoes, it doesn't really like being subject to them. So it's worth spending a moment considering what happens when the sanctions shoe is on the other foot.

China is in a trade tiff with the United States. China is accused of subsidizing its exports of green technology into our market. Such actions are at variance with its membership in the World Trade Organization, and now the U.S. Trade Representative is investigating the complaints.

China is retaliating against the U.S.T.R.'s scrutiny. Despite its denials, it is beginning to impose what experts are calling an "embargo" on shipments of "rare earths" to the United States and elsewhere. Rare earths -- not the 60s-era soul band out of Detroit -- are critical materials used to manufacture items as diverse as cellphones, wind turbines, guided missiles and pharmaceuticals.

While rare earths are actually abundant, China monopolizes the mining of them. An embargo of rare earth exports would violate international trade law, and a decision to withhold them internationally would shut down the world economy.

Consequently, China's rare earth retribution is stirring an extremely uneasy reaction. The Defense Department is studying the national security risks of dependence on China. Congress is considering loan guarantees to jump-start the mining of rare earth here in the U.S.

U.S. Representative Mike Coffman says "The administration needs to join with other countries and have a united front to tell China this is not appropriate." He calls the embargo "extremely disturbing" and is urging President Obama to ensure our national security interests are not beholden to the Chinese. Paul Krugman in the N.Y. Times goes a step further calling China "a rogue economic superpower, unwilling to play by the rules."

Strong stuff, indeed, and not a single U.S. policy maker, expert, or industrialist has called on the Obama administration to capitulate or to give China exactly what it's asking for despite the risks to our economy posed by its rare earth embargo. They'd be run out of town if they did.

Investigations, hot rhetoric, and government programs to circumvent the effects of an embargo -- understandable reactions as China, the third largest economy in the world, tries pushing around the world's largest economy in an effort to obtain trade concessions from us.

This brings us to Cuba, the world's 66th-largest economy, subject to a U.S. embargo for five decades; an embargo covering not just rare earth but everything with limited exceptions for food and medicine.

The purpose of the U.S. embargo against Cuba is every bit as clear as China's rare earth embargo against us; as President Obama restated this week, the goal is to bend Cuba to the will of the United States, until it reforms its economy and political system to our satisfaction. But Cuba, like its neighbor to the North, is unwilling to capitulate and undermine its sovereignty. So, the U.S. embargo continues.

Next week, as it has for the last eighteen years, the U.N. General Assembly will consider a resolution condemning the U.S. embargo against Cuba. In 2009, 187 countries voted for the resolution. Just three voted against it: Palau, Israel (itself subject to embargoes and boycotts since 1948), and the United States, which is now smarting from the shortage of rare earth. If past is prologue, this year's resolution will pass the General Assembly overwhelmingly, and the Obama administration -- which promised to move beyond unilateralism in foreign policy -- will essentially be left again standing alone.

This next U.S. vote to preserve our failed Cuba embargo will send a disturbingly familiar signal to the world community. One can only imagine the message received in Beijing.

 

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