As the Ukraine crisis persists, so do calls for the administration to attack the Russian economy by means of economic sanctions. To date, the administration has insisted that in order to be effective, such a tactic must be multilateral.
Unfortunately, that thinking may now be evaporating. In the face of unwillingness on the part of our partners in Europe to imperil their own economies given their interdependence with Russia’s, reportedly the White House is seriously considering a go-it-alone approach.
One: Unilateral sanctions don’t work. In “Economic Sanctions Reconsidered,” perhaps the most authoritative examination of the subject to-date, Dr. Gary Hufbauer demonstrates that the use of unilateral U.S. sanctions over a nearly 30-year period starting in the 1970s achieved their intended results only 13 percent of the time. And, in each of those cases studied, the subject countries were far less important to the global economy than Russia.
Two: Unilateral sanctions have a tendency to boomerang. They allow foreign companies to fill the void left by U.S. firms, and the U.S. economy loses markets, which are not regained. Hufbauer’s study estimated the loss in export value to the United States resulting from unilateral sanctions as between $15 billion and $19 billion annually. That figure could only increase given the increase in global economic interdependence.
No doubt, the administration sees clearly what a next round of sanctions should do to influence Russian conduct towards Ukraine. It needs to be as clear about what sanctions will actually do. To introduce an ineffective policy is one thing; to introduce one that both misses its intended target and then boomerangs back and harms the U.S. economy is quite another.
“The notion that for us to go forward with sectoral sanctions on our own without the Europeans would be the most effective deterrent to Mr. Putin, I think, is factually wrong,” a wise man recently told The New York Times. “We’re going to be in a stronger position to deter Mr. Putin when he sees that the world is unified.”
That wise man was President Obama. And the good news is: what was true back in April when he made those remarks happens to remain true today. Economic sanctions are, at best, a tactic. Any success they may have in changing geopolitical behavior is commensurate with rigorous multilateral agreement and application.
Sawaya is the director of USA* Engage and a member of the management team at the National Foreign Trade Council.