October 16, 2015

Incentive and Investment in Iran

Having failed to block the Iran nuclear deal through Congressional review or other means, some critics of the agreement are now working to undermine its implementation. One of “backdoor” methods of countering the deal was recently laid out by panelists at a conference convened by the Washington Institute of Near East Peace. Despite the creativity in masking the true intentions of this approach, this effort is clearly yet another a disingenuous attempt to kill the deal.
Panelists at the conference discussed how to hinder sanctions relief required under the agreement by intimidating potential investors from doing business in Iran. They proposed a two-part plan designed to discourage foreign investment. First, they said investors must be convinced that doing legitimate business with Iran would be a liability from a public relations standpoint. In other words, they plan on diminishing foreign investment by making it a moral taboo to trade with Iran, and by threatening to damage the reputations of companies who consider investment. Second, they recommended that the non-nuclear sanctions that will remain in place under the deal should be expanded—which would then limit or negate the practical benefits of easing of nuclear-related sanctions.
This new effort is disconcerting and carries real risks. The nuclear deal is a good deal, and its terms – including resuming economic relations – must not be breached. The international community recognizes that the deal is based on reciprocation: if we want Iran to honor the deal, then we must also honor its terms as they were intended. If we reinterpret the terms of a deal that addresses the international community’s security concerns, we invite Iran to do the same and turn a good deal into a bad one. Moreover, it could cost us our partners’ cooperation going forward. Europe especially suffered economically as a result of the sanctions regime and is looking forward to recovering by setting the scene for serious investment in Iran. There will be little appetite for further cooperation to address other issues with Iran if the U.S. is viewed as renegotiating the agreed terms for sanctions relief and punishing our European allies in the process.

Moreover, the hawks’ attention to human rights is glaringly selective and ironic seeing as Iranian human rights defenders and human rights organizations support the deal as a means of paving the way for eventual improvements in human rights. Some, like Shirin Ebadi, have called for new investors in Iran to take certain steps to ensure human rights are improved. But she is also clear that she supports the deal and that engagement is the best approach. “Ending global isolation” of Iran under the deal, she says, will likely benefit ordinary Iranians. Contrary to hawks, human rights experts contend that ending Iran’s isolation – and balancing these new opportunities with continued focus on improving human rights – is the most effective route to empowering a middle class, democratization and human rights. By inaccurately claiming we can change Iran’s human rights record by maintaining the sanctions status quo, hawks only make the fleeting and insincere nature of their interest in Iran’s human rights more evident.
This approach – isolating to achieve stability – is not a sustainable solution for peace or human rights. As the embargo of Cuba, the sanctions on Saddam Hussein’s Iraq, and the case of North Korea have all demonstrated, embargo-level sanctions have a tendency to empower U.S. adversaries and entrench human rights abuses rather than seriously address them. Therefore, now that Iran has agreed to curb its nuclear program, interfering with trade will only support the Iranian hardliner position that the West is secretly pursuing regime change and undermine opportunities to constructively address other challenges.
Time and time again, opponents of the Iran deal have sought to circumvent the deal by hiding behind excuses like outstanding fines and secret side deals. Yet neither these obstructions nor the strategy of strangling Iran into submission are legitimate means of ensuring Iran honors the nuclear deal. The road to halting Iran’s nuclear program is the Iran deal. If we are serious about its goal, then we must follow the deal’s terms as they were intended – and do so in good faith.

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