How Will U.S. Respond to Saudi Arabia for Khashoggi’s Murder?
By Natalie Maier
The U.S. is considering sanctions against Saudi Arabia in response to the murder of Washington Post journalist Jamal Khashoggi. President Trump has said very little to condemn the kingdom for the murder, but Secretary of State Mike Pompeo said in a statement on October 23 that the U.S. maintains “a strong partnership with the Kingdom of Saudi Arabia.” As details of Khashoggi’s death have continued to unfold with little reaction from the U.S., the silence begs the question – will the U.S. take legal action, and, if so, how?
In addition to revoking visas of the 21 Saudi nationals allegedly involved in the murder, Pompeo said that the U.S. may still enforce additional penalties, including Magnitsky sanctions.
The Magnitsky Act, signed into law by President Obama in 2012, authorizes the U.S. government to sanction human rights offenders, freeze their assets, and ban them from entering the United States. Congress passed the bipartisan bill as a response to the death of Sergei Magnitsky, a Russian tax accountant who was imprisoned for investigating tax fraud involving Russian officials.
Background
The U.S. business relationship with Saudi Arabia began in 1933, when Standard Oil of California (now Chevron) began exploring the territory and eventually struck oil in 1938. A joint company was formed, originally called the California Arabian Standard Oil Company, with the U.S. and Saudi Arabia splitting profits fifty-fifty. But in the 1980s, the Saudis nationalized the company, eventually calling it ARAMCO. Bloomberg News has called the company the most profitable in the world, and so it is no wonder that “protecting Saudi Arabia and other Persian gulf producers has been a cornerstone of U.S. foreign policy for decades” (Council on Foreign relations). However, after President Trump warned that the kingdom would face “severe punishment” for the murder of Jamal Khashoggi, Saudi Arabia issued a statement saying it would respond with “greater action.” Specifically, the statement noted that the Kingdom “has an influential and vital role in the global economy.” The exact threat is unclear, but Saudi Arabia has not enforced an embargo on oil since 1973. With President Trump aiming to end exports from Iran, Saudi Arabia becomes an even more crucial supply to the U.S. With oil off the table, the most obvious move for the U.S. would involve the Mutual Defense Assistance Agreement.
Mutual Defense Assistance Agreement
Signed by President Harry Truman in 1949, the agreement opened up U.S. foreign policy to bolster the defense of allies to the U.S. during the Cold War. Two years later, Saudi Arabia and the U.S. crafted an agreement that specifically allowed U.S. military aid to Saudi Arabia, and for the U.S. training of Saudi military. Fast forward to 2017, Secretary of State James Mattis asked President Trump to remove existing restrictions on U.S. military aid to Saudi Arabia. That very same year, Trump authorized a $110 billion dollar arms deal with the kingdom, including individual deals for companies like Lockheed Martin, Boeing, General Electric and Exxon mobile, to name a few. As a result of the news, U.S. defense stocks reached an all-time high. However, the deal involves a 10-year disbursement of assistance to the Kingdom, leaving time for the U.S. to pull out from the deal and stop aid.
Signs already point to the decline of the financial relationship between the two countries. U.S. Treasury Secretary Steve Mnuchin will not attend Saudi Arabia’s investment conference, known as “Davos in the Desert.” The conference is usually attended by big players in the global economy. But this year, representatives from the U.K., France, Holland and the U.S., along with big-hitting commercial companies have all pulled out.
If Trump decides to stall MDAA, the move could start a ping-pong financial battle between the two global players. Saudi Arabia would likely retaliate where it hurts the U.S. – our almost exclusive oil supply from the Kingdom. Even here in the United States, Trump estimates 450,000 jobs are at stake in nearly every state in America as a part of the deal.
For more information, please see:
https://www.ft.com/video/85938255-4b1b-4c67-bf83-99e922c7e40a
https://www.vox.com/2016/1/6/10719728/us-saudi-arabia-allies
https://www.cnbc.com/2018/10/15/saudi-statement-sparks-concern-the-kingdom-will-weaponize-oil.html
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