THE WORLD; WHAT CAN CONGRESS DO ABOUT APARTHEID?
By SUSAN F. RASKY
Published: June 12, 1988
WASHINGTON— WHEN the South African Government decided last week to extend the state of emergency imposed two years ago to put down protests against white minority rule, it added new fuel to a battle now under way in Congress. The fight is over whether to toughen American economic sanctions against Pretoria.
Later this month, the House of Representatives is expected to vote on legislation that would ban most trade between the United States and South Africa and, perhaps more significantly, force American companies and individuals to divest themselves of their South African holdings.
Democrats, who favor new sanctions, and Republicans, who oppose them, rest their respective cases on what may be the single point on which they agree: The limited sanctions adopted by the United States in 1986 have failed to force the South African Government to dismantle its apartheid policies. Few legislators on Capitol Hill dispute that political conditions in South Africa have worsened since the sanctions were enacted by Congress over President Reagan's veto.
But in assessing the economic impact of the 1986 sanctions on South Africa, and thus the potential that new, more sweeping United States sanctions might have in forcing political change there, Republicans and Democrats in Congress, more or less predictably, have reached vastly different conclusions.
Supporters of the use of sanctions cite the willingness of the United States to invoke restrictions against the Soviet Union, Poland, Cuba, Nicaragua, Libya and most recently Panama, to assert foreign policy goals even when the practical outcome has been at best negligible and at worst more damaging to the United States than to the intended target.
Opponents, citing some of the same examples, argue that the United States made its moral position on apartheid clear with adoption of the 1986 sanctions. Any further move, they contend, will only curtail South African economic growth, thereby undercutting the single most effective weapon available to South African blacks in fighting apartheid - economic leverage to stage consumer boycotts, work slowdowns or temporary strikes.
The 1986 sanctions included bans on new investment and new bank loans, a prohibition on oil and arms exports and a partial ban on computer exports. Imports of South African agricultural products, uranium, krugerrands, iron and steel are also banned. 160 Companies Leave Perhaps the most visible sanction South Africa has faced is the withdrawal of American companies. Since 1983, 160, or about half the total of American firms with businesses there, have closed down their operations.
But, according to Merle Lipton, a South African native who is now a senior analyst at the Investor Responsibility Research Center in Washington - an organization that monitors the American corporate presence in South Africa - nearly all the plants continue to operate, many of them with franchise or licensing agreements that enable them to sell the same products.
He adds that one unintended result of the American withdrawals has been windfall gains for the mainly white South African companies that bought out the firms that left.
Over the long term, however, the flight of foreign capital is potentially more damaging to the South African economy because it erodes business confidence and reduces new investment, Mr. Lipton maintained. The proposed sanctions being debated in Congress would ban the making or holding of any investments in South Africa. United States direct investment in South Africa was $1.4 billion in 1986, while indirect investment, mainly holdings in South African gold mines, was estimated at $2.5 billion to $3 billion in 1986. Some Exemptions
The trade ban would end virtually all American exports to South Africa, an amount that totaled $1.25 billion in 1987. But the ban would exempt agricultural products, which amounted to $55 million last year. American imports of South African products, which totaled $1.25 billion in 1987, will be affected less since they now consist primarily of strategic minerals that would still be permitted under the new sanctions legislation.
In addition, the proposed sanctions would ban new Federal coal, gas and oil leases for American subsidiaries or affiliates under common control of a foreign company that directly or indirectly invests in or exports oil to South Africa's oil industry.
The President would be required to retaliate economically against foreign companies or individuals ''taking significant commercial advantage of American sanctions.''
Some House Democrats have expressed concern that such retaliation would violate provisions of various international trade agreements to which the United States is a party, including the General Agreement on Tariffs and Trade.
The sanctions measure, assuming it is passed in the House, faces an uncertain future in the Senate, where key Republican moderates such as Nancy Kassebaum of Kansas and Richard Lugar of Indiana say they oppose it. Mrs. Kassebaum and Mr. Lugar, both members of the Foreign Relations Committee, were instrumental in getting the 1986 sanctions approved in the Senate, and House Democrats would like to enlist their cooperation again this year.
Photo of assembly line worker (J.B. Pictures/Louise Gubb)