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Embargo: Let’s Not Trade

Problem

Have you ever misbehaved? In response, perhaps your parents or guardian took away your phone, revoked car privileges, or grounded you. They punished you, intending to show that your actions were unacceptable and that you need to change your behavior.

Explanation

Countries can take a similar response. Embargoes are like countries revoking privileges from one another when rules aren't followed. An embargo's intended effect is to isolate a country, hurting its economy or political circumstances to force it to act on an issue. They are an international tool to put pressure on a country.

Definition of Embargo

An embargo is an official government ban on the exchange of particular goods or commercial activities with a specific country. It acts as a tool in economic warfare by sending a political signal or weakening a country’s capacities by cutting off access to resources. Embargoes are also called sanctions. 

How It Works

Embargoes were first recorded in 432 BC. The Athenian leader Pericles implemented a trade embargo on Megara, its neighbor, who had violated sacred land. The blockade was intended to punish Megara and cause it to submit, but instead, it helped initiate the Peloponnesian War. Since then, embargoes have been used as a means of economic warfare. 

There are a variety of ways embargoes can be implemented. Trade embargoes deal with exporting to a country. They can strategically target one particular good that contributes to a country's economy to diminish its power and capabilities. For example, a country that mainly exports oil would take a big economic hit if nobody bought it. Embargoes are also used for arms in this manner to preserve neutrality or encourage an end to hostilities.

Broad embargoes let humanitarian aid like food and medication into a country to help people. It eliminates some of the hardships placed on the population in an attempt to pressure only those in power. Civil sanctions simply prevent goods from reaching a country, while hostile embargoes destroy or detain the supplies. Multilateral embargoes include many nations banding together and are often easier to enforce and more effective than an embargo imposed by a single country. If not all countries comply, third parties can trade and profit as a middle man. For example, in the 1995 trade embargo from the US against Iran, Japan and Europe did not follow because they relied heavily on Iranian oil. The sanctions arguably hurt the US more than Iran. 

The United Nations (UN) often makes decisions about embargoes or other economic sanctions. Allied countries come together to enforce trade restrictions to limit a perceived threat or force humanitarian aid. The World Trade Organization (WTO) and the General Agreement on Tariffs and Trade (GATT) both govern trade relations but have little executive power beyond suggestion. Because global trade allows nations to prosper, tools of isolation like embargoes have tremendous consequences for a country's economic and political wellbeing.

Impacts 

Sociologist Johan Galtung asserted that "the collective nature of economic sanctions makes them hit the innocent along with the guilty." While embargoes appear like a better alternative to war, they inherently hurt civilians to force governmental action. In a government where people have little to no voice, great harm is done to those who cannot provoke change. 

One of the most well-known embargoes is the United States embargo on Cuba and it had this precise problem. The blockade was very damaging, particularly in severe restrictions of medical equipment and high food prices, causing a significant amount of suffering. Yet even in its worst harm, the embargo did not change Cuba’s behavior as the United States had intended. The UN General Assembly cited this embargo as a violation of international law regarding the malnutrition and disease it caused. In 2006, a draft resolution to terminate the lengthy 40-year ban had the support of 183 countries. 

Also, embargoes often escalate tensions by further pitting countries against each other, rather than maintaining peaceful relations. Athens’ embargo on Megara sparked the Peloponnesian War, and US sanctions on Japan triggered their involvement in WWII. In cases like US sanctions on Cuba, efforts have arguably failed more than succeeded. Embargoes need to be applied, administered, and lifted well to be effective with concrete goals. As Soviet leader Mikhail Gorbachev stated when evaluating the effectiveness of embargoes, "In our dangerous world, we simply cannot afford to neglect — nor have we the right to do so — such stabilizing factors in relations as trade and economic, scientific, and technological ties. If we are to have genuinely stable and enduring relationships capable of ensuring a lasting peace, they should be based, among other things, on well-developed business relations." If embargoes are used, they should be carefully implemented with consideration of how they can also be removed.

Think Further

  1. If you were leading a country,  how would an embargo be used to promote neutrality for two other countries at war?
  2. What circumstances make an embargo an effective tool? 
  3. In what cases is an embargo a more harmful punishment than a strategic tool?

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  1. Liberto, Daniel. “What Is an Embargo?” Investopedia, .Dash, 26 Jan. 2019, www.investopedia.com/terms/e/embargo.asp.
  2. Klestadt, Andrea. “US Trade Embargoes — Are They Effective Tools to Promote Change?” NCBFAA, NATIONAL CUSTOMS BROKERS & FORWARDERS ASSOCIATION OF AMERICA, INC., www.ncbfaa.org/Scripts/4Disapi.dll/4DCGI/cms/review.html?Action=CMS_Document&DocID=17727&MenuKey=pubs.
  3. Ovans, Andrea. “Embargoes Work – Just Not the Way We’d Hope.” Harvard Business Review, Harvard Business School Publishing, 5 Nov. 2014, hbr.org/2014/08/embargoes-work-just-not-the-way-wed-hope.
  4. Haass, Richard N. “Economic Sanctions: Too Much of a Bad Thing.” Brookings, Brookings Institution, 28 July 2016, www.brookings.edu/research/economic-sanctions-too-much-of-a-bad-thing/