Honey and Vinegar: Incentives, Sanctions and Foreign Policies

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Buttressed by input from scholars, diplomats, and observers with an intimate knowledge of U.S. foreign policy, Honey and Vinegar examines "engagement" ?strategies that primarily involve the use of positive incentives. The book contends that although engagement has received little scrutiny relative to other, more punitive foreign policy approaches, it has great potential as a tool for modifying the behavior of regimes with which the United States has significant disagreements.Heightened awareness of the costs ...

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Overview

Buttressed by input from scholars, diplomats, and observers with an intimate knowledge of U.S. foreign policy, Honey and Vinegar examines "engagement" —strategies that primarily involve the use of positive incentives. The book contends that although engagement has received little scrutiny relative to other, more punitive foreign policy approaches, it has great potential as a tool for modifying the behavior of regimes with which the United States has significant disagreements.Heightened awareness of the costs associated with the use of sanctions or military force has catalyzed a search for policy alternatives. In this quest to find other appropriate policy options for pursuing foreign policy goals, strategies of engagement warrant serious consideration. As argued in these pages, the use of incentives, rather than penalties, may be particularly well suited to the post—Cold War world, where globalization has made the economic isolation of any country difficult to achieve. At the same time, the collapse of the Soviet Union has meant that American carrots may be especially savory to many regimes once reliant on Soviet support. Paradoxically, engagement can be a good choice, even when it fails, in that it can open the door for other policy options. For instance, the two years in which America tried to engage Saddam Hussein before the Gulf War worked to the advantage of the United States later. After Iraq's invasion of Kuwait in 1990, American efforts to build a military coalition to oppose Iraq were facilitated by the sense in the region that the United States had earlier pursued a conciliatory policy, but to no avail.Contributors to this volume have provided seven cases exploring episodes of engagement: relations between the United States and China; Europe's "Critical Dialogue" with Iran; U.S. engagement with Iraq from 1988 to 1990; U.S. efforts to engage North Korea; the combination of U.S. persuasion and coercion toward South Africa in the apartheid era; the lessons of U.S.-Soviet détente; and the process of normalization of relations between the United States and Vietnam. In addition to contemplating the historical record, the book is forward looking, discussing ways in which incentives might be better introduced as the United States seeks continued or new relations with a variety of problem countries including China, Cuba, Iran, Libya, North Korea, Russia, and Syria. While the editors are careful to point out the difficulties of managing strategies of engagement, they nevertheless conclude that incentives should be accorded consideration equal to the more conventional punitive options of sanctions and military force.

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Product Details

  • ISBN-13: 9780815733560
  • Publisher: Brookings Institution Press
  • Publication date: 6/28/2000
  • Edition description: New Edition
  • Pages: 168
  • Product dimensions: 6.10 (w) x 9.10 (h) x 0.80 (d)

Meet the Author

Richard N. Haass is president of the Council on Foreign Relations. Until June 2003 he was director of policy planning for the Department of State, where he was a principal adviser to Secretary of State Colin Powell on a broad range of foreign policy concerns. Previously, Haass was vice president and director of Foreign Policy Studies at the Brookings Institution. He was also special assistant to President George H. W. Bush and senior director for Near East and South Asian affairs on the staff of the National Security Council, 1989-93. He is the author or editor of ten books in American foreign policy, including The Opportunity: America's Moment to Alter History's Course. Meghan L. O'Sullivan is a former fellow in the Foreign Policy Studies program at the Brookings Institution. She is currently a member of the policy planning staff at the U.S. State Department.

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Read an Excerpt



Chapter One


Introduction


RICHARD N. HAASS AND
MEGHAN L. O'SULLIVAN


The strategy of engagement, or the use of incentives alongside other foreign policy tools to persuade governments to change one or more aspects of their behavior, has received relatively little scrutiny. Instead, the attention of scholars, policymakers, and pundits has generally focused on those instruments of foreign policy—in particular military force or economic sanctions—that seek to attack, harm, or otherwise diminish the capacities of the target country. Thanks to a vast and ever-growing body of literature on these tools, policymakers have a better sense of the best circumstances for using these "negative" instruments as well as the ideal means of managing their use. However, with a few notable exceptions, far less effort has been devoted to discerning the most favorable circumstances and strategies for employing incentives or rewards, rather than penalties or punishments, to shape the conduct of problem regimes.

    The term engagement was popularized amid the controversial policy of constructive engagement pursued by the United States toward South Africa during the first term of the Reagan administration. However, the term itself remains a source of confusion. To the Chinese, the word appears to mean simply the conduct of normal relations. In German, no comparable translation exists. Even to native English speakers, the concept behind the word is unclear. Except in the few instances in which the United States has sought to isolate a regime or country, America arguably"engages"states and actors all the time in one capacity or another simply by interacting with them. This book, however, employs the term engagement in a much more specific way, one that involves much more than a policy of nonisolation. In our usage, engagement refers to a foreign policy strategy that depends to a significant degree on positive incentives to achieve its objectives. Certainly, engagement does not preclude the simultaneous use of other foreign policy instruments such as sanctions or military force. In practice, there is often considerable overlap of strategies, particularly when the termination or lifting of sanctions is used as a positive inducement. Yet the distinguishing feature of engagement strategies is their reliance on the extension or provision of incentives to shape the behavior of countries with which the United States has important disagreements.

    During the cold war, the United States overlooked the egregious behavior of many regimes or leaders in the interest of securing their support against communism. Post-cold war American foreign policy, however, has the luxury and the need to be more discriminating, thereby justifying further consideration of engagement strategies. The ongoing sanctions debate has exposed the drawbacks of relying on economic coercion, particularly when exerted unilaterally, as the primary instrument of foreign policy. Although there is still a range of opinion about the efficacy of sanctions and the frequency with which they should be used, some broad areas of consensus have emerged. Sanctions almost always result in some economic hardship, but this impact is often insufficient or unable to force the desired political change in the target country. Moreover, sanctions can be costly for innocent bystanders, particularly the poorest in the target country and American businesses and commercial interests. In addition, sanctions often evoke unintended consequences, such as the strengthening of obnoxious regimes. Given these findings, there is increasing recognition that reliance solely on punitive tools like sanctions rarely constitutes an effective foreign policy strategy. This growing awareness has been behind calls to explore more nuanced foreign policy strategies that, while possibly having a sanctions component, are not entirely dependent upon it for achieving U.S. objectives.

    Moreover, just as the efficacy of sanctions has been questioned, the limits of military force have been exposed. Although military action will remain an essential foreign policy tool, its application is expensive and by no means certain of achieving its goals. Even in the face of overwhelming American military and technological superiority, recalcitrant regimes such as Iraq's Saddam Hussein have displayed the capacity to withstand military attack for surprisingly long periods of time. The more recent case of Kosovo demonstrates how even the most carefully orchestrated military campaigns can result in serious collateral damage to civilians and risk creating further conflicts by straining diplomatic relationships. The bombing of Serbia also poignantly reveals that even when military force is successful in achieving most of its original objectives, the costs associated with these achievements often suggest that alternative tools may have been preferable to the use of military force.

    In addition, the changing nature of post-cold war world threats makes them increasingly ill suited to being managed by strategies based on punishment alone. Threats from proliferation of weapons of mass destruction, terrorism, and ethnic conflict increasingly occupy the attention of those concerned with national security and global stability. One may argue that the United States can address these issues by using sanctions to isolate and weaken regimes that sponsor and support offensive behavior as it has done in the past. However, quite possibly, insecure regimes are more likely to pose these sorts of threats to America and the international system; if so, then policies that destabilize and ostracize countries can be expected to exacerbate problems, not mitigate them.

    Although these developments signal the need to consider other foreign policy strategies, the dissolution of cold war alignments has both opened new opportunities for engagement strategies and created new rationales for them. Even nations that have demonstrated little enthusiasm for adopting American ideals and norms—North Korea, Libya, and to a lesser extent, Vietnam—are today more receptive to American initiatives. Their heightened economic vulnerability and strategic insecurity in the post-Soviet era have opened new possibilities for American foreign policy strategies that involve incentives. Conversely, just as former Soviet allies are no longer bound to follow certain policies due to cold war cohesion, so too are America's allies freer to shape their foreign policy agendas subject to their own desires. If America hopes to enlist the support of its allies to deal with problem regimes, it needs policies whose appeal extends beyond rigid American preferences. Within the last decade, many of America's closest allies in Europe have revealed a preference for using incentives, rather than punitive actions, to achieve foreign policy goals. Finally, because the use of certain incentives can incorporate countries into world markets while at the same time promoting American exports, engagement strategies can be consistent with U.S. economic interests and positive trends toward liberalization and global integration.

    In short, the changing parameters of the post-cold war era suggest that policymakers seriously consider engagement as a foreign policy option, not only because of the need to supplement old foreign policy tools, but also because of new circumstances that may make incentives-oriented strategies particularly potent. However, it is worth highlighting that eagerness for policymakers to contemplate engagement strategies alongside more common foreign policy approaches is not to be confused with advocacy of the greater use of engagement in all situations. In part, our reluctance to promote engagement per se is based on the realization that all policies—like sanctions and military force—are applicable and useful only in specified circumstances. In addition, unlike other foreign policy tools, engagement is open to charges of not only appeasement but also moral hazard. Arguably, the provision of incentives to curtail offensive behavior could encourage others to engage in similar activities in the hopes of extracting benefits. Finally, engagement is likely to involve even higher risks and uncertainties than other foreign policy strategies given that it is a strategy that often depends on reciprocal actions between the United States and the target country.

    As is evident from the fairly small existing literature on the use of incentives in foreign policy, many different engagement strategies exist, depending on such variables as the actors engaged, the incentives employed, and the objectives pursued. The first important distinction to be made in any typology of engagement is whether the strategy is conditional or unconditional. A strategy of unconditional engagement would offer certain changes in U.S. policy toward the country without the explicit agreement that a reciprocal act would follow. Depending on the intention behind these unconditional initiatives—and, of course, the reaction of the target country—this form of engagement may be short-lived. Charles Osgood, in his GRIT (graduated and reciprocated initiatives in tension reduction) theory offers a model of cooperation that stems from an uninvited, opening initiative by one country. Although the act in itself is unconditional, the failure of the target country to reciprocate with meaningful gestures soon leads to the abandonment of the strategy; alternatively, if the initial accommodating steps are met with positive moves, cooperation ensues. President George Bush's 1991 nuclear reduction initiative, which was reciprocated by Soviet President Mikhail Gorbachev, is one instance of a GRIT approach spurring cooperation. Conciliatory gestures made by the United States to Iran in March 2000 may be another.

    Another form of unconditional engagement takes a broader perspective, by regarding inducements offered to civil society and the private sector over time as playing an important role in creating openings for cooperation further down the road. In these unconditional strategies, certain initiatives or changes in U.S. policy toward the country are made without necessarily expecting, or even soliciting, reciprocal acts from the regime. This form of engagement may be implemented by nongovernmental actors, such as the programs sponsored by the National Endowment for Democracy that promote democracy and the development of institutions in many authoritarian regimes. Alternatively, this engagement may entail explicit modifications to U.S. policy, as occurred with Cuba in March 1998 and January 1999. By allowing licensed sales of food and agricultural inputs to independent entities in Cuba, by easing travel and financial restrictions, and by promoting communication between America and the island, the United States sought to buttress the development of civil society and the private sector in Cuba. In doing so, the United States hoped to build momentum leading to greater political changes, which would facilitate U.S.-Cuban cooperation in the future, perhaps many years down the road.

    In contrast, the expectations surrounding conditional engagement strategies are more contractual; in its most narrow form of the tit-for-tat process explored by Robert Axelrod, cooperation is based on a strict cycle of reciprocity. However, conditional engagement can also refer to a much less tightly orchestrated series of exchanges in which the United States extends inducements for changes undertaken by the target country. These desired alterations in the behavior of the target country may be particular, well-defined policy stances, or as in the case of Alexander George's conditional reciprocity, they may refer to more vague changes in attitudes and the overall orientation of regimes. While recognizing the subtle differences among the various concepts of conditional engagement, this book uses the term largely to refer to strategies of reciprocity with focused, policy objectives in mind. The Agreed Framework struck between the United States and North Korea in 1994 is one such example. In a specific effort to curtail nuclear proliferation, America linked the provision of economic incentives to the fulfillment of North Korean commitments to halt Pyongyang's development of nuclear weapons.

    Architects of engagement strategies have a wide variety of incentives from which to choose. Economic engagement might offer tangible incentives such as export credits, investment insurance or promotion, access to technology, loans, and economic aid. Other equally useful economic incentives involve the removal of penalties, whether they be trade embargoes, investment bans, or high tariffs that have impeded economic relations between the United States and the target country. In addition, facilitated entry into the global economic arena and the institutions that govern it rank among the most potent incentives in today's global market.

    Similarly, political engagement can involve the lure of diplomatic recognition, access to regional or international institutions, or the scheduling of summits between leaders—or the termination of these benefits. Military engagement could involve the extension of International Military Educational Training (IMET) both to strengthen respect for civilian authority and human rights among a country's armed forces and, more feasibly, to establish relationships between Americans and young foreign military officers. These areas of engagement are likely to involve working with state institutions, while cultural or civil society engagement is likely to entail building people-to-people contacts. Funding nongovernmental organizations, facilitating the flow of remittances, establishing postal and telephone links between the United States and the target country, and promoting the exchange of students, tourists, and other nongovernmental people between the countries are some of the incentives that might be offered under a policy of cultural engagement.

    This brief overview of the various forms of engagement illuminates the choices open to policymakers. The plethora of options signals the flexibility of engagement as a foreign policy strategy and, in doing so, reveals one of the real strengths of engagement. At the same time, it also suggests the urgent need for considered analysis of this strategy. The purpose of this book is to address this need by deriving insights and lessons from past episodes of engagement and proposing guidelines for the future use of engagement strategies. Throughout the book, two critical questions are entertained. First, when should policymakers consider engagement? A strategy of engagement may serve certain foreign policy objectives better than others. Specific characteristics of a target country may make it more receptive to a strategy of engagement and the incentives offered under it; in other cases, a country's domestic politics may effectively exclude the use of engagement strategies. Second, how should engagement strategies be managed to maximize the chances of success? Shedding light on how policymakers achieved, or failed, in these efforts in the past is critical in an evaluation of engagement strategies. By focusing our analysis, these questions and concerns help produce a framework to guide the use of engagement strategies in the upcoming decades.

    Seven cases provide the basis for analyzing engagement strategies and formulating recommendations for their future use. In selecting these cases, we were interested in the use of incentives not with allies, or even "friendly tyrants," but with "rogues," adversaries, or other problem regimes. As policymakers have preferred to use largely punitive policies to deal with these countries, the range of engagement efforts available for analysis is small. Within this grouping, we chose the most prominent examples of the use of incentives to pursue foreign policy objectives. Six of the cases examine a period of engagement between the United States and a country with which America has had a turbulent relationship; one of the cases involves European efforts to engage a problematic regime. Although many of these cases involved economic coercion, in each instance the dominant tool employed was the extension of incentives. As a result, the success or failure in each case must be evaluated as a product of a broader engagement effort.

    China is an essential component of any study of the strategy of engagement, in part because it remains one of the largest ongoing challenges to U.S. policy. Under the umbrella of a somewhat ambiguous policy toward China, the United States has pursued a range of objectives, including the security of Taiwan, human rights, nuclear nonproliferation, the stability of the Korean peninsula, democratization, trade issues, and intellectual property rights. The results of this strategy are the subject of great controversy. Some argue that engagement with the United States has influenced China to be more democratic, more market oriented, and more cognizant of international norms than it was even two decades ago. However, others point to Chinese theft of U.S. nuclear technology, America's burgeoning trade deficit with China, continuing threats of force against Taiwan, and a stagnating human rights agenda as evidence that U.S. engagement with China has failed miserably. In this volume, Robert Suettinger moves beyond the advocacy of such positions to examine both the difficulties and the benefits of using engagement to manage a complex relationship with a major emerging power.

    Iran has posed a challenge to both European and American policymakers since its revolution in 1979. Until recently, the United States mostly lobbied for the international isolation of Iran, but Europe has sought moderation of Iranian behavior through much less extreme measures. These differences in strategy—epitomized by American legislation mandating secondary sanctions on foreign firms investing in the Iranian petroleum industry—have fueled significant friction between the transatlantic powers. Nevertheless, despite American pressure, the provision of incentives has continued to be the centerpiece of European policy toward Iran. As explored by Johannes Reissner, the European Union's "critical dialogue" with Iran is an example of a particularly conciliatory engagement strategy in which Europe sought to translate its economic ties with Iran into effective pressure to advance human rights, nuclear nonproliferation, and peace in the Persian Gulf.

    Iraq, while now an object of U.S. animosity, was not too long ago the subject of an American policy of engagement. From 1988 to 1990, the Bush administration sought to moderate Saddam Hussein's regime in Iraq by extending credit guarantees for trade and other selected economic incentives to the country. Kenneth Juster's chapter, in delving into this episode of American diplomacy, augments knowledge about the benefits and drawbacks of using economic engagement to accomplish strategic goals. Particularly when assessed in the wake of Iraq's 1990 invasion of Kuwait, this engagement effort raises important questions about the evaluation of such strategies and highlights some of the domestic risks of carrying them out.

    North Korea and the Agreed Framework—an accord in which North Korea consented to abandon its nuclear ambitions in exchange for certain economic and diplomatic concessions from the United States, Japan, and South Korea—is perhaps the best example of the use of incentives to promote foreign policy objectives. As such, a close consideration and the extraction of accurate lessons from this case is essential for the management of similar situations bound to arise elsewhere in the near future. However, as revealed by Leon Sigal in this book, the North Korean experience is also of great utility in what it exposes about engagement efforts with extremely closed, totalitarian regimes with long histories of hostility to the United States. Moreover, U.S. endeavors to engage North Korea bring to light important issues concerning the role that American allies should and could play in U.S. engagement strategies.

    South Africa is an interesting case in its own right; its inclusion in this volume is essential as the concept of constructive engagement first gained prominence in relation to the policies pursued under President Ronald Reagan. The many seemingly mutually exclusive lessons that have been drawn from this case attest to the need to reexamine this episode. Moreover, the South African experience reveals the many faces of engagement. During the first term of the Reagan administration, the United States followed a policy of offering political and economic incentives in the hope of achieving strategic objectives. However, in Reagan's second term, the sequence of priorities reversed and the instruments of engagement changed; seeking improvement in the human rights situation in South Africa above anything else, the United States sought to promote civil society while imposing economic penalties. As examined in the chapter by Pauline Baker, these two periods of engagement attest to the importance of various U.S. actors and constituencies in formulating and implementing engagement strategies.

    The Soviet Union and the United States were arguably intertwined in some form of engagement throughout most of the cold war. Even when America sought to contain Soviet influence most strictly, U.S. policy was formulated with the hope that it would eventually lead, in the words of George Kennan, to the mellowing of the regime and society. However, the détente period of the late sixties and early seventies examined in this book most clearly meets our criteria as an episode of engagement. Soviet and American leaders made arms control pacts and commitments in other realms in anticipation of more extensive economic ties and strategic agreements. As demonstrated by James Goldgeier in this volume, although the fruits of détente ultimately fell far short of the expectations of both sides, this episode remains an important example of how America used engagement to manage a vital relationship with a major global rival.

    Vietnam is an instructive case in part because it offers vivid comparisons and contrasts. The Carter administration attempted an unconditional normalization of relations with Vietnam without success; more than a decade later the Bush and Clinton administrations achieved many of Carter's goals under terms more favorable to the United States. Frederick Brown explains how such a contrast not only highlights the importance of the changing geopolitical context to engagement strategies undertaken in the wake of the cold war, but also explores important lessons the Vietnamese case offers about managing the domestic politics of engagement in the Unites States.

    The concluding chapter brings together the lessons from the individual cases and synthesizes them into general guidelines for when and how to use engagement strategies. In addition, the conclusion considers the current relationships between the United States and China, Cuba, Iran, Libya, North Korea, Russia, and Syria, asking whether incentives might be better incorporated into U.S. policy. Using the general lessons extracted from the historical cases examined in this volume, the conclusion assesses the suitability of engagement and, where appropriate, suggests steps that policymakers could undertake to better advance U.S. interests in the process of moving away from the strategies of isolation currently in place.

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Table of Contents

1 Introduction 1
2 The United States and China: Tough Engagement 12
3 Europe and Iran: Critical Dialogue 33
4 The United States and Iraq: Perils of Engagement 51
5 The United States and North Korea: Cooperative Security on the Agreed Framework and Beyond 70
6 The United States and South Africa: Persuasion and Coercion 95
7 The United States and the Soviet Union: Lessons of Detente 120
8 The United States and Vietnam: Road to Normalization 137
9 Conclusion 159
Contributors 202
Index 205
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