Washington DC – USA*Engage and the National Foreign Trade Council (NFTC) today expressed disappointment in the approval of three sanctions and divestment-related bills by the House of Representatives.
“While the intention behind the divestment legislation (H.R. 2347 and H.R. 180) is beyond reproach, enabling states to become more involved in foreign policy is likely to complicate the ability of the President and Congress to make foreign policy decisions in the future,” said NFTC President Bill Reinsch. “We are pleased with the work that went into revising H.R. 180 to make it more targeted, but continue to believe that foreign policy sanctions by states may undermine the ability of the U.S. to speak with one voice. These things may also frustrate cooperation with U.S. trading partners who often see them as a violation of U.S. international commitments.”
In particular, passage of H.R. 2347, which would enable state divestment from companies doing business in Iran, undercuts the assertion made in the Darfur Accountability and Divestment Act (H.R. 180) that “Congress acknowledges that divestment should be used sparingly and under extraordinary circumstances.”
Reinsch continued, “Through these bills, Congress is setting the stage for more attempts by state legislatures to divest from other countries, including potentially Russia and China, or the hot-button social issue of the day. State legislators are unlikely to wait for Congress’ blessing before attempting to divest for other reasons down the road.”
Since its introduction, the NFTC and USA*Engage have also opposed H.R. 957, a bill that seeks to expand the scope of the Iran Sanctions Act by imposing new U.S. sanctions on a number of companies in Europe and Asia.
“The Iran sanctions bill that passed the House today may backfire in terms of its intended impact. At the same time the United States is working with our allies to come up with a truly multilateral approach, Members of Congress have confused multilateral with extraterritorial and passed counterproductive unilateral legislation,” said Reinsch.
When the sanctions bill was first reported by the House Foreign Affairs Committee earlier in the year, the NFTC and USA*Engage joined five other trade associations in sending a letter to Chairman Lantos and Ranking Member Ros-Lehtinen to express concern. The groups highlighted the potential for legal issues resulting from the extension of penalties to cover the activities of foreign subsidiaries of U.S. companies. The associations observed in the letter that “governments could implement blocking statutes and other measures to counteract the threat of U.S. penalties.”
At the same time, the NFTC and USA*Engage acknowledged the leadership of the House Ways and Means and Financial Services Committees for amending the bill to provide flexibility to the executive branch.
The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.