The Senate voted yesterday to impose sanctions prohibiting Iraq from receiving U.S. government-guaranteed loans for the purchase of American farm products.
The House passed a milder version of the sanctions, giving the secretary of agriculture broad authority to waive them if he judged they hurt the export competitiveness of U.S. farmers. Since Iraq became eligible for the program in 1983, it has purchased approximately $4.5 billion in U.S. commodities with the credits.
Both measures were inserted as amendments to the House and Senate versions of the 1990 farm bill, virtually assuring that they would appear in some form in the final bill to be sent to President Bush later this year. They follow a week of Iraqi military threats against neighboring Kuwait over an oil production dispute, but also reflect a larger congressional concern about Iraq's human rights record.
The Bush administration is known to oppose congressional imposition of sanctions against the Iraqi government of President Saddam Hussein, feeling that such action is the president's prerogative.
"It's been our view that the president should have the final decision on whether to waive sanctions either on national interest or national security grounds," said a senior State Department official. "The amendments are not good enough."
State Department spokesman Richard Boucher said at a briefing that "Iraq's recent behavior has caused us concern," and acknowledged that the administration was looking at "export controls" as a way of manifesting its displeasure and had a "general concern" about weapons proliferation in Iraq.
But he added the administration felt Congress's actions "would not help us achieve our goals."
Iraq in 1979-82 was subject to U.S. trade sanctions as a nation supporting international terrorism. Accusations have continued that the Iraqi government has used poison gas against its enemies and is seeking advanced weapons technology.
New congressional concern about Iraq arose last year with disclosures that the Atlanta branch of the Italian Banca Nazionale del Lavoro had written nearly $2 billion in unauthorized loans to the Iraqi government in the previous two years. Most of the loans had been used for the purchase in the United States and other countries of industrial products, weapons and technology.
The portfolio, however, also included $750 million in loans guaranteed by the U.S. government for grain and other agriculture commodities purchased from the Department of Agriculture's Commodity Credit Corp.
The guarantees are meant to facilitate sale of U.S. agricultural products to countries that would otherwise have difficulty obtaining credit.
Iraq joined the program in 1983, while mired in a bloody war against Iran. It owes approximately $2 billion for the $4.3 billion in purchases it has made since then, but is current on its payments.
Senate debate focused on Hussein and Iraq's questionable human rights record. Sen. Alfonse M. D'Amato (R-N.Y.), sponsor of the amendment, called the Iraqi leader "a butcher, a killer, a bully -- some day we're going to have to stand up to him. Why not now?"
His amendment precluded the president from extending any new financial credits to Iraq unless he certified to Congress that the Iraqi government had met a series of human rights conditions.
In the House, Rep. Dan Glickman (D-Kan.) introduced a measure restricting guaranteed loans for agricultural purchases by "any country" that had demonstrated lack of respect for human rights or used chemical weapons or supported terrorism.
The amendment passed 234 to 175, but was quickly followed by a second one granting the agriculture secretary discretion to waive the sanctions. This amendment, which passed 208 to 191, considerably softened the Glickman measure.
"We got 75 percent of what we wanted," Glickman said.
The Senate also passed an amendment to the farm measure, introduced by Sen. Jesse Helms (R -- N.C.), that would prohibit U.S. financial institutions from lending money to the Soviet Union for non-agricultural purchases at rates below what they offer to U.S. farmers. Sources indicated, however, that the amendment, which passed 64 to 32, was likely to be discarded by the House-Senate conference that prepares the final farm bill.