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July 10, 1998


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US senate clears partial lifting of sanctions

US President Bill Clinton has issued a strong endorsement shortly after the senate passed a bill recommending lifting of the economic sanctions, though partially on India and Pakistan to penalise them for their nuclear tests in May.

The 100-member senate, on a vote of 98-0, approved the legislation last night, permanently exempting loan guarantees extended by the US agriculture department for food and other agricultural commodities from the sanctions imposed on India and Pakistan.

''Food should not be used as a weapon, and I will resist any action that would lead to a de facto grain embargo,'' the president said in a statement.

Passage of this legislation is an important first step, senator Sam Brownback said, adding, "We need to begin repealing the remaining sanctions on India and Pakistan. And, we must act now."

Brownback said his committee would begin hearings next week on whether to lift other economic sanctions on Pakistan and India, perhaps with some conditions such as an agreement by the two countries to avoid provocation in the contested Kashmir territory.

"It all comes down to trying to build peace in the region," he said. "There are some minimalist requirements we could put in."

Brownback was convinced that Pakistan, in particular, was on the brink of economic collapse.

"Our sanctions are only further destabilising the region. We must act immediately to put in place a plan to repeal the remaining sanctions to reduce tensions and to re-engage the United States economically and diplomatically in the region," he said.

Senator Charles Robb said the senate action was recognition of fact that the impact of sanctions was clearly limited. The situation in South Asia is far too important to be micromanaged by (the US) congress, he added.

Before it becomes a law, the legislation must secure the approval of the house of representatives. With the strong backing of the farm lobby, the bill would see through the other house, according to observers.

Though there is general disapproval of the idea of using economic sanctions as an instrument of foreign policy or for advancing the cause of non-proliferation, yesterday's bill was clearly a victory for America's powerful ''farm lobby,'' especially the wheat-growers in America's Pacific north-west.

Last year, they sold to Pakistan 2.2 million metric tonnes of US wheat, some 37 per cent of the wheat grown in the region.

During the two-hour discussion that preceded the passage of the bill, its sponsor, Mitch McConnell, said, ''We should not sacrifice the American farmer in our effort to put the nuclear genie back in the bottle.''

The legislation, expected to become law within a couple of days, would clear the way for US farmers to bid on a major Pakistani wheat tender, scheduled for July 15. Pakistan, which has emerged as the number one market for US white wheat, wants to buy 350,000 tonnes of wheat next month.

If the bill hadn't been passed, American farmers, already enduring low wheat prices, would have been prevented from exporting wheat to Pakistan. The sanctions have frozen the remaining $ 88 million in wheat credits for Pakistan this year and threaten up to $ 350 million in new credits for next year.

The haste with which the bill had been pushed through was to meet the July 15 deadline for submitting tenders for the wheat sale. Senators had warned against the delay in the passage of the bill.

''We should rethink sanctions across the board and what we mean by them,'' said Democratic senator John Glenn, the author of the 1994 law under which the Clinton administration was forced to impose nuclear-related sanctions on India and Pakistan.

Later, McConnell told the media that he wanted the senate to consider broader legislation in September. He wanted to allow the US Export-Import Bank and the US Overseas Private Investment Corporation to resume lending to US trade in the region, and give the president more discretion over other penalties.

''We got a lot more to do,'' said senator Byron Dorgan, a Democrat.

Senate agriculture committee chairman Richard Lugar (Republican) said he would press ahead with his own proposal, which would make it more difficult for congress or the executive branch to impose unilateral sanctions.

''They tend to harm our industries and hamper our foreign policy more than to advance their stated goals,'' Lugar said. ''This senate needs a broader debate on economic sanctions and their consequences.''


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