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June 17, 1999


US govt, Congress differ over lifting of sanctions

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C K Arora in Washington

The Clinton administration and the Congress appear to differ, rather sharply, on the modus operandi and timing of the lifting of economic sanctions against India, imposed soon after the nuclear tests of May 1998. This has disappointed the business communities of the two countries who were expecting easing of sanctions.

The divergent approach came to the fore in the speeches of law-makers and a representative of the administration at the 24th annual meeting of the US-India Business Council which ended here Wednesday night.

Law-makers -- Sam Brownback and Benjamin Gilman (both Republicans) and Jim McDermott (Democrat) -- favoured immediate suspension for five years all the curbs that the US had slapped on India.

In fact, the Senate last week passed by a voice-vote an amendment of Senator Brownback, putting in abeyance all the sanctions, and Gilman promised to introduce soon an identical measure in the House of Representatives.

Under Secretary of State for Economic and Business Affairs, Stuart E Eizenstat, reiterated the administration's stand, linking withdrawal of the sanctions to the progress in the non-proliferation dialogue that the US had of late been having with New Delhi and Islamabad.

And, instead of immediate suspension of sanctions, as suggested by the Congressmen, he preferred ''a comprehensive and permanent national interest waiver'' for all of the sanctions of the Glenn Amendment under which India and Pakistan had been penalised.

''Until we see further progress on non-proliferation benchmarks, we are not prepared to waive the remaining sanctions -- for example, in the multilateral arena, on non-basic human needs lending to India by the international financial institutions, or on US bilateral assistance and military sales,'' Eizenstat observed.

On the other hand, the law-makers are wary of the administration ''I believe that giving the administration waiver authority does not fully accomplish the goal of getting the US India's relationship back on the track and restoring confidence in the future of that relationship,'' Democratic Congresman Frank Pallone said.

Explaining his point on the floor of the house, he said the broad discretion given to President Clinton ''means more of the same incremental, carrot-and-stick approach of the past.''

He was critical of the US opposing World Bank funding for India's infrastructural projects. ''We should not allow these important development projects to be held hostage to other diplomatic considerations,'' he remarked.

Meanwhile, leaders of several of America's best-known companies expressed strong support for the Senate initiative that would encourage reduction in economic sanctions against India, while affording to US diplomats ''greater flexibility'' in negotiations with India and Pakistan.

At a press conference held after the US-India Business Council meeting, its Chairman Dean R O Hare, Lehman Brothers Vice Chairman Howard L Clark and American International Group Vice Chairman Frank G Wisner (former US Ambassador to India) argued that differences between the administration and the Senate over technical details should not obscure an emerging bipartisan consensus on the US approach to South Asia.

"It is hard to justify a policy that seeks to compel poor nations to sign a treaty by blocking development loans,'' they said, in an apparent reference to the US action in denying World Bank loans to India for its inability to sign the Comprehensive (nuclear) Test Ban Treaty or CTBT.

Later, a press note issued by the council said the legislation introduced by Senator Brownback with the backing of both the Republican and Democratic Parties, represented a complex but workable legislative compromise. ''It takes away little, but gives a lot US negotiators are asked to relinquish one sanction, but gain new authorities on the issue that India and Pakistan are about most national security'', it added.

The law-makers too are divided on the issue of the Pakistan specific Pressler Amendment. The Brownback Amendment envisages its repeal which Gilman, Pallone and Gary Ackerman, a democrat from New York, oppose.

In 1990, under the Pressler Amendment the then president George Bush banned economic and military aid to Pakistan, which had been of the order $ 650 million a year in the 1980s. The action followed reports of Islamabad going ahead with its nuclear weapons programme.

However, almost all the Congressmen who spoke at the council meeting were critical of the administration's Entities List which has targeted wide-ranging companies and institutions in Pakistan and India most of which have no bearing on nuclear proliferation or other national security concerns.

They wanted the US to black list only those entries which made direct and material contributions to weapons of mass destruction.

Earlier, Under Secretary Eizenstat said, ''The current president waiver authority expires this October and we have now seen several different congressional proposals dealing with the sanctions issue. ''We work loosely with Senator Brownback and others last year and are actively engaged in consultations on the legislative proposals on the hill (in the Congress).

According to observers, a clear picture about the sanctions will be available only after the matter had been thrashed out at a joint committee of the Senate and the House.

The Indian delegation at the council meeting was led by the Federation of Indian Chambers of Commerce and Industry or FICCI president Sudhir Jalan. He and Indo-US Business Council chairman Shashi Ruia also spoke at the meeting.


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