Unilateral sanctions tarnish the image of U.S. companies and individuals as reliable suppliers, thereby eroding U.S. credibility and undermining U.S. leadership. U.S. companies report that rivals are quick to take advantage of unreliable U.S. behavior. Foreign competitors with no prior foothold in U.S.-dominated global markets take advantage of U.S. sanctions to gain entry, thereby gaining experience and economies of scale that facilitate future success. Unilateral sanctions violate Transatlantic norms and expectations, thus undercutting cooperation in support of U.S. interests. Together with the European Union, the United States makes the most use of the dispute settlement system established by the Uruguay Round of trade negotiations.
Unilateral sanctions fly in the face of the encouraging trend towards widely accepted trade rules.
In the case of Europe, sanctions have a high political cost because they consume high-level attention and stifle cooperation on other fronts. Despite these disadvantages, unilateral U.S. sanctions have been proliferating dramatically, affecting 35 countries accounting for one almost fifth of the world's export markets. These measures are seemingly random, reactive and ad hoc in nature. My proposal is best understood not as an alternative to the present approach, but rather as an effort to inject high-level political momentum and strategic purpose into the Transatlantic economic relationship. This process will take time.