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Economic sanctions are domestic penalties applied by one country (or group of countries) on another country (or group of countries). Economic sanctions may include various forms of trade barriers and restrictions on financial transactions. Economic sanctions are not necessarily imposed because of economic circumstances — they may also be imposed for a variety of political and social issues. Economic sanctions can be used for achieving domestic political gain.
Subsidization or the unfair protection of exports of one or more products, or unfairly protecting some sector from competition (from imported goods or services).
Politics of sanctions
Economic sanctions are used as a tool of foreign policy by many governments. Economic sanctions are usually imposed by a larger country upon a smaller country for one of the two reasons – either the latter is a threat to the security of the former nation or that country treats its citizens unfairly. They can be used as a coercive measure for achieving particular policy goals related to trade or for humanitarian violations. Economic sanctions are used as an alternative weapon instead of going to war to achieve desired outcomes.
Effectiveness of economic sanctions
Regime change is the most frequent foreign policy objective of economic sanctions. There is controversy over the effectiveness of economic sanctions in their ability to achieve the stated purpose. Haufbauer et al. claimed that in their studies 34 percent of the cases were successful  When Robert A. Pape reexamined their study, he claimed that only five of their forty so-called "successes" stood out, dropping their success rate to 4%.
It also affects the economy of the imposing country to some degree. If import restrictions were made, the consumers in the imposing country would have fewer choices of goods. If export restrictions were made or sanction prohibited businesses in the imposing country from doing business with the target country, the imposing country could lose markets and investment opportunities to competing countries.
Examples of economic sanctions
Asian economies became more and more effective competitors on the international stage, achieved via export-led growth, many countries imposed import tariffs aimed at protecting domestic industries. The intention was to give the domestic firms time to adjust to a changed competitive context.
In September 2003, World Trade Organization talks in Cancún between the advanced nations and the developing world were ineffective. Issues included the advanced nations subsidizing their agricultural sectors to the detriment of the developing world.
Vietnam as a result of capitalist influences over thye 1990's and having imposed sanctions against Cambodia, is accepting of sanctions diposed with accountability.
The United Nations imposed economic sanctions upon Iraq after the first Gulf War as an attempt to make the Iraqi government co-operate with the UN weapons inspectors' monitoring of Iraq's weapon program. These sanctions were quoted as being unusually stringent in that very little trade goods were allowed in or out of Iraq during the sanction period.. The sanctions were not lifted until May 2003, after the government of Saddam Hussein was overthrown.
There is a United Nations sanction imposed by UN Security Council Resolution 1267 in 1999 against all Al-Qaida- and Taliban-associated individuals. The cornerstone of the sanction is a consolidated list of persons maintained by the Security Council. All nations are obliged to freeze bank accounts and other financial instruments controlled by or used for the benefit of anyone on the list.
In March 2010, Brazil introduced sanctions against the US. These sanctions were placed because the US government was paying cotton farmers for their products against World Trade Organization rules. The sanctions cover cotton, as well as cars, chewing gum, fruit, and vegetable products. The WTO is currently supervising talks between the states to remove the sanctions.