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July 12, 2016

It’s pointless to be the last country sanctioning Iran

America will have more influence, not less, if we lift the embargo.


In 1971, President Richard Nixon lifted the United States’ trade embargo of China — a decisive turn in U.S.-China relations that was part of a broader rapprochement. In doing so, the Nixon administration bet that American interests were best served with a globally integrated China, rather than one that remained isolated and insulated from American influence.

That bet paid off. And it’s one that President Obama should make now when it comes to lifting the U.S. embargo on Iran.

The ultimate objective of the embargo — blanket trade sanctions implemented through a series of executive orders — has been to change Iran’s foreign policy. But several decades of these unilateral American restrictions haven’t achieved that goal. Rather than softening Iran’s policies, a nuclear standoff escalated until the Obama administration eventually shifted toward diplomacy, backed by multilateral sanctions.

The result was last year’s nuclear agreement, the lifting of multilateral sanctions and Iran beginning to rejoin the global economy. The U.S. embargo, though, remains in place, limiting our ability to further shift Iranian policy. We would be better served by lifting the embargo, increasing commerce between Iranian and American firms, and drawing Iran into the American-led global economy, making Tehran more responsive to the United States economically.

To do this, Obama should begin to lift sanctions related to finance, energy and technology while maintainingtargeted sanctions related to Iranian human rights abuses and sponsorship of terrorism. Critics will undoubtedly call this an unacceptable concession, particularly after trade-offs already made with Iran in the nuclear deal. But while Iran would certainly benefit economically from increased trade, lifting the embargo ultimately serves America’s long-term interests.

Americans won’t succeed at influencing the decisions of Iran’s leadership, or the opinions of the Iranian people, without increasing ties with Iran. The Obama administration has already taken steps to permit the export of personal communications technologies, which has begun to facilitate the integration of Iranians into the global tech community — imagine the impact on U.S.-Iran relations if leaders in Tehran were forced to factor in the impact of financial and energy sector ties in their policy deliberations.

And consider the purely commercial incentive for lifting the embargo. According to our 2014 study, unilateral sanctions have cost the U.S. economy as much as $175.3 billion in lost export opportunities over 18 years. Those costs are set to accelerate, particularly as Iran opens itself up to foreign business and reforms its markets. Over the long term, barring U.S. commerce with Iran would lead to an unnecessary loss in American prestige, power and profit.

This is, in part, because with or without U.S.-Iran trade, Iran is unlikely to remain economically isolated. Since the nuclear deal’s implementation, delegations from Europe and Asia have headed to Tehran seeking renewed business. Germany sent its first trade delegation to Iran soon after the signing of the nuclear accord. In May, South Korean President Park Geun-Hye led a 230-member delegation to Iran, where the two countries committed to tripling annual trade to $18 billion.

The pace of trade is still slower than it can and should be, in some measure because the “wariness of western banks to work with Iranian institutions” — a symptom of the embargo — has kept the brakes on Iran’s reintegration. Which in turn means that Iranians have, so far, not fully realized the benefits of its nuclear bargain with Western powers, and that the West hasn’t maximized its leverage with Iran. As Iranian Foreign Minister Mohammad Javad Zarif explains, the nuclear deal “will be sustainable if everybody feels they are making gains.” It will work better, in other words, if the Iranian regime stays invested in it.

The good news is that the current administration has signaled a subtle shift in U.S. policy, publicly statingthat it will no longer stand in the way of legitimate business activities involving Iran and businesses around the world — a significant break with the recent past.

But if Obama is, indeed, breaking with the past and no longer committed to fencing Iran off from the world, he should consider completely lifting the embargo to boost America’s ability to meaningfully influence the Iranian regime. And, unlike America’s Cuba embargo, he has the power to lift the Iran embargo without Congress’s approval.

As the president has said, Iran has the opportunity and capability to become “a very successful regional power.” It should follow, then, that Iran is too important a country to cede to the influence of geopolitical rivals like Russia and China. But that’s exactly what we’re doing by fencing ourselves off from Tehran. Permitting competitors’ unrivaled influence over one of the region’s major powers, the United States risks losing its ability to shape favorable outcomes in the Middle East, whether in the Syria conflict, the sectarian stalemate in Iraq or the transit of U.S. naval forces in the Persian Gulf.

As President George W. Bush recognized, in 2004, when it comes to Iran, in the absence of commercial ties, Americans have been “relying upon others, because we’ve sanctioned ourselves out of influence with Iran.”

It doesn’t need to be this way. Just as commercial ties between the United States and China predated restoration of diplomatic relations, so, too, can lifting of the Iran embargo be a precursor to an eventual change in the tenor of a long-fraught relationship. If Obama lifts the embargo and draws Iran toward the U.S.-led economy, the dividend will be influence for years to come.

This piece originally appeared in The Washington Post.

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