Agricultural Cooperatives and Grain Export Issues
7 Pages 1707 Words
ia is not an arch rival and nuclear enemy any more and this directly effects the grain exports to there.
The FAS (Foreign Agricultural Service sums up the political changes in foreign markets in this way: "Economic sanctions can be powerful foreign policy tools targeted to further U.S. foreign policy and national security objectives." It is a case of the American government causing some degree of economic restraint and even burden, on private grain producers keen to expand their markets worldwide. The results are often negative, but always rather complex:
Trade restrictions imposed by the U.S. Government, however well-justified, do impact U.S. commodity exporters and consequently the entire agricultural sector. Furthermore, the effects of these restrictions are not limited to just the markets that U.S. exporters are prohibited from trading with: other exporters change their marketing strategies to the detriment of the U.S. (F.A.S. 2000)
The restrictions in trade are controlled by the Office of Foreign Asset Control (OFAC). The main countries targeted for restrictions are:
Cuba
North Korea
Iran
Iraq
Libya.
According to the FAS, the OFAC restrictions on these countries is fairly substantial. Taken as a total, the countries will import approximately 11% of the world wheat trade. This is not a trifling amount in terms of world market demand. It is enough to cause fairly serious economic concerns to American coops and grain exports.
In general, there is a ...