U.S. Lifts Ban on Food, Medicine to Rogue Nations

WASHINGTON —  The White House abandoned a major economic weapon against renegade nations Wednesday and said the United States would no longer restrict their purchase of American food, medicine and medical supplies.

The announcement marks a major departure in U.S. economic, foreign and farm policy. As a result, Cuba, Iran, Iraq, Libya, North Korea and Sudan could eventually gain access to U.S. supplies, which have been largely off limits.

“The signal has been sent by the administration: We are open,” Agriculture Secretary Dan Glickman said.

The shift responds to pressure from the politically potent U.S. farm industry, staggering from falling prices for its grains and other crops. The new policy does not require congressional approval. But slightly eased tensions with Libya and Iran make it less controversial among Clinton’s congressional critics.

Iran stands to benefit the most and provide American farmers with their most promising new markets. It has whet the appetite of American farmers with a request to buy up to $600 million in wheat and other agricultural commodities to feed a population that has doubled since the 1979 revolution to more than 60 million.

Before the Iran hostage crisis began in 1979, Iran was the largest market for U.S. rice and one of the largest for U.S. wheat. It purchases about $1 billion worth of non-U.S. wheat a year.

Stuart E. Eizenstat, the undersecretary of State who announced the shift, said that the national security concerns that led to the sanctions still remain. “What has changed is our calculation of the impact” that sanctions have, he said.

“The consensus was: Why discourage countries from using their hard currency to buy food from the United States rather than weapons from some other country?” said another senior administration official. “That gives them less for anything else bad.”

As the largest agricultural producer in the nation, dependent heavily on exports, California is likely to feel the effect as a result of a more stable U.S. farm exporting policy, agriculture and trade experts said. But other states sell greater volumes of the crops and products most likely to be sold: wheat, rice, corn and vegetable oils.

“Generally, there was a lot of sentiment in the agriculture community and business community that our sanctions policy was very patchwork and had unintended consequences,” a White House official said. “We’ve heard them out.”

The new policy results from a study begun last summer, aimed at eliminating economic sanctions that hurt the most vulnerable populations in countries viewed by the government as outlaw nations. At the time, Clinton declared that “food should not be used as a tool of foreign policy, except under the most compelling circumstances.”

The pressure to examine the benefits of sanctions and the costs to U.S. exports came to a head when India and Pakistan tested nuclear weapons last summer. U.S. sanctions on each led the farm lobby to push for exclusion of food exports.

Over the last 20 years, one administration after the next has turned to restrictions on food and medical exports as they reached into a limited arsenal of weapons to use in some of the most intractable foreign policy dilemmas, even as they decried the withholding of often desperately needed food.

“Sanctions are a legitimate tool of our foreign policy, but we have always sought to limit their impact on innocent and vulnerable people,” White House Press Secretary Joe Lockhart said.

Under the new policy, exporters may apply to the Treasury Department for an export license covering a specific, already-negotiated sale. Administration officials said that under all but the most extreme conditions, the requests, which in the past would have been turned down, would be approved.

Lockhart said, however, that exceptions would be made in cases of “actual or potential armed conflict involving the United States or its allies; a situation in which a regime is diverting imports of food, medicine or medical equipment to its armed forces or to its political supporters,” or if a regime or its officials stand to gain economically from the trade.

Among the six nations that stand to gain access to U.S. silos and medical supply houses, Iraq is already purchasing some supplies under the U.N.-sponsored program that allows it to sell oil if the earnings go directly for food and medical purchases. Sales to Cuba are restricted under federal law.

Because the change applies only in cases in which the United States has acted on its own to impose sanctions, rather than those imposed under a United Nations mandate, for example, it has no impact on commerce with Yugoslavia. Arms sales to Belgrade are prohibited, oil is being embargoed, but food and medical goods may still be sold.

From the rice fields of Louisiana to the wheat fields across the Great Plains and the lentil fields in Idaho, farmers have been looking to Washington for years to boost export markets. Their latest woes only magnify the potential political effect of the decision.

“Wheat prices are the lowest in a decade, rice is the lowest in three years, soybeans are the lowest in five or six years,” Gus Schumacher, an undersecretary of Agriculture, said in an interview. “Rural America is in parlous shape.”

Dale E. Hathaway, whose experience with the use of sanctions dates back to his job administering the 1980 grain embargo on the Soviet Union, said that “agriculture groups have been fussing about it for a long time.”

Administration officials said it was a coincidence that the decision was announced while Vice President Al Gore was spending the day in Iowa in his quest for the Democratic presidential nomination.

“It should work very nicely for Al Gore,” said Carole Brookins, director of World Perspectives, an agriculture and trade policy consulting firm.

Across the political spectrum, the decision won expressions of support, to varying degrees.

“Fidel Castro and Saddam Hussein have never missed a meal because of our sanctions policy,” said Sen. Byron L. Dorgan (D-N.D.). A spokesman for Sen. Jesse Helms (R-N.C.), chairman of the Senate Foreign Relations Committee, was less enthusiastic but said, “Every dollar Iran or Sudan or Libya wants to spend on American grain instead of on terrorism or weapons of mass destruction is fine with us.”

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Times staff writer Janet Hook contributed to this story.