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From Wikipedia, the free encyclopedia

Economic sanctions are domestic penalties applied by one country (or group of countries) on another for a variety of reasons. Economic sanctions include, but are not limited to, tariffs, trade barriers, import duties, and import or export quotas. The most famous example of an economic sanction is the fifty-year-old United States embargo against Cuba.

Economic sanctions are not always imposed because of economic circumstances. For example, the United States has imposed economic sanctions against Iran for years, on the basis that the Iranian government sponsors terrorism.

The United Nations imposed stringent economic sanctions upon Iraq after the first Gulf War, and these were maintained partly as an attempt to make the Iraqi government co-operate with the UN weapons inspectors' monitoring of Iraq's weapons and weapons programs. These sanctions were unusually stringent in that very little in the way of trade goods were allowed into or out of Iraq during the sanction period (further information about these sanctions and their effects can be found at and at [1]). The sanctions were not lifted until May 2003, after the government of Iraqi president Saddam Hussein was overthrown.

There is a United Nations sanctions regime imposed by UN Security Council Resolution 1267 in 1999 against all Al-Qaida- and Taliban-associated individuals which has undergone years of modification by a dozen UN Security Council Resolutions. The cornerstone of the regime is a consolidated list of persons maintained by the Security Council. All nations are obliged to freeze bank accounts and other financial instruments controlled by, or used for the benefit of, anyone on the list.


Trade sanctions

Trade sanctions are trade penalties imposed by one or more countries on one or more other countries. Typically the sanctions take the form of import tariffs (duties), licensing schemes or other administrative hurdles. They tend to arise in the context of an unresolved trade or policy dispute, such as a disagreement about the fairness of some policy affecting international trade (imports or exports).

For example, one country may conclude that another is unfairly subsidising exports of one or more products, or unfairly protecting some sector from competition (from imported goods or services). The first country may retaliate by imposing import duties, or some other sanction, on goods or services from the second.


Politics of trade sanctions

Trade sanctions are frequently retaliatory in nature. For example, in 2002 the United States placed import tariffs on steel in an effort to protect its industry from more efficient foreign producers, such as China and Russia. The World Trade Organisation (WTO) ruled that these tariffs were illegal. The European Union threatened retaliatory tariffs on a range of US goods, forcing the US government to remove the steel tariffs in early 2004. Economic sanctions frequently result in trade wars. The WTO is the world governing body for trade disputes. Economic sanctions can be a coercive measure for achieving particular policy goals, either related to trade, such as the United States sanctions against Brazil over patent law in the late 1980s,[citation needed] or for non-economic policies such as the European Union's sanctions against Burma (Myanmar) based on lack of democracy and human rights violations.[1]

Sanctions can include a software product that may not be downloaded or otherwise exported or re-exported to any country subject to US trade sanctions governing the software: countries including Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria.

Recent historical examples of trade sanctions

Worldwide there have been many examples of such disputes and associated sanctions. For example, American steel companies requested, and were at times granted, protection from steel imports that they claimed enjoyed an unfair advantage due to the economic policy of the steel exporting country. At times it was asserted that the exporting company was dumping steel overseas (in the USA) at below cost. See United States steel tariff 2002

Again, as the Asian economies became more and more effective competitors on the international stage, achieved largely via export-led growth, many countries imposed import tariffs and other measures aimed at protecting domestic industries. The intention was not always permanent protection (of the threatened industry) but sometimes an attempt to give the domestic firms time to adjust to a changed competitive context.

The disagreements that occur are not only bi-lateral and can be fundamental to the working of the global economy and e.g. to the alleviation of global poverty. As of September, 2003, World Trade Organisation talks in Cancún broke down between the advanced nations and the developing world. Unresolved issues include that of whether the advanced nations are unfairly subsidising their agricultural sectors to the detriment of the developing world, which might otherwise sell more agricultural produce into e.g. the USA and Europe.

In mid-March 2010, Brazil introduced new sanctions against the US. These sanctions were on the basis that the US government was paying cotton farmers for their products; an action not allowed by the WTO. The sanctions cover cotton, as well as other products such as cars, chewing gum, fruit, and vegetable products[2] The WTO is currently supervising talks between the nations to remove the sanctions


  1. ^ Howse, Robert L. and Genser, Jared M. (2008) "Are EU Trade Sanctions on Burma Compatible with WTO Law?" Michigan Journal of International Law 29(2): pp. 165-196
  2. ^ Stanglin, Doug. "Brazil slaps trade sanctions on U.S. to retaliate for subsidies to cotton farmers." March 9, 2010. Retrieved on March 14, 2010.

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