Business coalitions and networks work on the principle that a ‘combined voice is more powerful than one that is fragmented’.
The European Services Forum (ESF) recognized that: ‘By tabling a coordinated document, the industry will be stronger within the European Union and vis-à-vis the other WTO Member States and will give to their sectoral requests a political dimension that individual sectors will not be able to achieve.’
The Intellectual Property Committee (IPC) used the same strategy in putting together the ‘Basic Framework’ document on intellectual property, with UNICE and Keidanren.
A great number of trade coalitions have been formed for this purpose of presenting a combined and powerful voice for business. These coalitions are tightly networked as shown in this figure. They are also closely interrelated through their common corporate membership as shown in this table. This multiplicity of coalitions with heavily overlapping membership and leadership enables corporations to multiply their power and influence.
The National Foreign Trade Council (NFTC) has been the leading business coalition campaigning against sanctions. It has taken legal action to prevent state and local governments from discriminating against companies who do business in countries where governments abuse human rights. For example it won a precedent-setting case in 1999 against Massachusetts legislation that added ten percent to government tenders from companies that did business with Burma (Myanmar).
It is common in many US states and cities for locals to express their disfavour of foreign regimes through ‘selective purchasing’ laws. For example in the 1980s such laws had succeeded in getting some large US companies to withdraw from South Africa and in the late 1990s companies such as Apple computer, Levi Strauss, Eastman Kodak and PepsiCo were withdrawing from Burma to ensure their US business continued.
NFTC president Frank Kittredge stated in relation to the court case that NFTC won against the Massachusetts law: ‘This ruling has broad, nationwide significance, and should help to put an end to local efforts to make foreign policy.’ In other words he opposed local democratic efforts to influence local government purchasing decisions. NFTC had also lobbied in Washington to have the law overturned by the Federal government.
NFTC is one of the oldest business coalitions lobbying for free trade and open markets. It was formed in 1914 and currently has over 300 US companies as members. Its Board of Directors has included AIG, Bechtel, Boeing, BPAmerica, Caterpillar, Citigroup, ExxonMobil, Ford Motor Company, General Electric, Haliburton and Hill and Knowlton, Pfizer and Procter & Gamble.
On its 2003 website the then US Trade Representative (USTR) thanked NFTC for ‘all your efforts to help us prepare for the WTO ministerial in Doha’ and for its ‘tremendous amount of work to promote the launch’ of a new round of WTO negotiations. And US Vice-President Richard Cheney, former CEO of Haliburton, stated: ‘From the point of view of Haliburton, one of the most valuable organizations we are a part of is the NFTC.’
NFTC offers its members influence, access to Congress and the Executive, information and expertise. It claims to shape and support free trade agreements such as NAFTA and WTO, through providing ‘a broad-based U.S. business voice and leadership’ in negotiations and engagement ‘at the highest levels with key decision-makers’. NFTC’s contribution to portraying regulations as trade barriers include presentations to embassies of developing countries and a white paper on the economic harm regulations do when they seek to reduce risks but are not fully based on science.
NFTC’s interest in free trade is based on the financial interests of its members rather than free market ideology and so it is also a big supporter of export credit agencies such as OPIC and Ex-Im Bank, which basically subsidies companies operating overseas. It spends well over $1.5million each year on government lobbying.
USA*Engage is a corporate front group that was formed in 1997 by the NFTC to promote the business case against sanctions. NFTC continues to play a leading role in its activities and maintains its website. As a front group USA*Engage enables corporations to push for trade with dictators and regimes that abuse human rights without fronting up themselves and suffering a loss of corporate reputation. According to Frank Kittredge, president of NFTC and vice-chairman of USA*Engage, ‘USA*Engage was formed because a lot of companies are not anxious to be spotlighted as supporters of countries like Iran or Burma… The way to avoid that is to band together in a coalition.’
USA*Engage has more than 600 corporate members from all sectors of the economy as well as 40 national and state associations and organizations. It campaigns against selective purchasing laws and sanctions by persuading ‘policy-makers, opinion-leaders, and the public’ of the economic costs and ineffectiveness of sanctions.
NFTC hired PR consultants and coalition builders, the Wexler Group, to set up and maintain USA*Engage. Members include the National Association of Manufacturers (NAM); Unocol and Caterpillar which do business in Burma; Mobil and Texaco, which do business in Nigeria; and Boeing, Westinghouse, and ABB which are all keen to do business in China.
USA*Engage argues that ‘American values are best advanced by engagement of American business and agriculture’ – hence its name. It claims this engagement inevitably improves the lives of people world wide and therefore advances democracy and human rights. In contrast, unilateral economic sanctions impose costs on the US by spoiling relationships with allies; increasing costs of imported goods; and compromising the competitiveness and investment opportunities of US companies by giving competing foreign companies the opportunity to access markets that the US is boycotting.
USA*Engage claims direct access to Congressional, Administration, state and local officials. It particularly targets members of Congress by estimating the cost of sanctions to their constituents. It also recruits ‘respected foreign policy and economic experts to speak out against sanctions, actively engage the media, and provide outreach’ in key states. In this way USA*Engage claims to have ‘effectively recast the political debate on sanctions’.
USA*Engage was founded, and for a time chaired, by the Caterpillar Inc’s Director of Government Affairs, William Lane, who also played an active role in lobbying for GATT. Lane detailed USA*Engage’s strategy: ‘We engaged the academic community and think tanks. We engaged nontraditional business allies ranging from religious and humanitarian organizations to human right groups. We engaged Congress and the Clinton administration.’
USA*Engage succeeded in getting dozens of supportive newspaper editorials following its formation. The results seemed to be paying off in 2000 when ‘the House Republican leadership agreed to ease the trade embargo against Cuba… the House voted to make permanent China’s normal trading rights in the United States… the Clinton administration announced it would lift economic sanctions against North Korea’ and a house bill proposed lifting sanctions on food and medicine to Libya, Iran and Sudan.
The Institute for International Economics (IIE) did a study on the cost of sanctions, which was partly funded by NFTC and released at USA*Engage’s first press conference. USA*Engage has also made good use of reports and studies funded by NAM, the Cato Institute, the Center for Strategic and international Studies, and the Center for the Study of American Business. These think tanks all receive funding from USA*Engage members.
USA*Engage managed to get its allies in Congress to sponsor a bill in 1997: the Enhancement of Trade, Security, and Human Rights through Sanctions Reform Act. The Act would make sanctions very difficult to impose, unless they were to remedy unfair trading practices. It would require a comprehensive assessment of the ‘likely impact on US foreign policy, economic, and humanitarian interests’ of any proposed sanctions as well as a cost-benefit analysis of the economic impact on private companies. It would exempt companies with preexisting contracts from sanctions imposed, and would require sanctions to be reauthorized every two years. An internal memo obtained by Mother Jones magazine suggests that the bill was initially drafted by the Wexler group.
As part of the lobbying for this bill, USA*Engage wrote to its members in 1998 asking for their help in ‘mounting a grass roots letter writing campaign’ in favour of the bill. Such a campaign would involve ‘senior executives, suppliers, facility managers and, wherever possible, employees’ and would support ‘our congressional champions’ who were asking for help to make the bill a top priority: ‘if we are going to prevail we must act now….In their view and ours, a successful legislative strategy hinges on our ability to rapidly assemble large, bipartisan cosponsor lists’.
The Trade Sanctions Reform and Export Enhancement Act was passed in 2000 but lacked some of the teeth that USA*Engage would have liked and it continued to lobby for further legislative reform until the issue got sidetracked by the events of September 11.