October 8, 2015

U.S. Should Forge Economic Ties with Iran

US President Barack Obama speaks about race in the context of the not guilty ruling of George Zimmerman in the killing of Florida teenager Trayvon Martin in February 2012, as he appears at the start of the Daily Press Briefing in the Brady Press Briefing Room at the White House in Washington, DC, July 19, 2013. AFP PHOTO / Saul LOEB        (Photo credit should read SAUL LOEB/AFP/Getty Images)
SAUL LOEB/AFP/Getty Images)

Despite the resolution of the decade-long nuclear dispute, the Obama administration has declared that the United States will not seek economic ties with Iran, thwarting the hopes of the U.S. commercial sector and Iran’s young population. Instead of changing the paradigm that has existed in U.S. policy towards Iran – one in which Tehran’s isolation is valued more than its integration – the White House is sticking to a policy that has outlived its usefulness and now defies its justification. Having fenced Iran off from the world, Washington will be left fencing itself off from Iran in the years ahead, as European and Asian business leaders flood into Tehran looking to capture Iran’s market while America sits on the sidelines.

It is thus time for the United States to rethink its strategic approach to Iran. To do so, the Obama administration should turn to an earlier episode of American diplomatic history, where President Nixon likewise faced a similar situation with a regional power, equally hostile to America’s perceived intentions, and chose in favor of a new strategic approach.

Before President Nixon ever stepped foot in China, the U.S. had started to take tangible steps to end its isolation and set the path forward to a new relationship. In 1969, the Nixon administration took the first steps to lift the U.S.’s trade embargo on China – the initial opening in what Nixon himself would call a new policy of “containment without isolation.”

Under this policy, Nixon sought to push back on Chinese activities that the U.S. believed anathema to its interests in Asia, while opening the door to allow for China’s integration into the U.S.-led global economy. Two decades of isolating China had produced little for Washington, and U.S. policymakers saw that China was becoming increasingly invulnerable to American-led economic pressure. “Containment without isolation” thus became the new tagline for administration policy towards the mainland.

Unfortunately, the White House has taken the opposite approach with Iran. Despite the broad lifting of sanctions in return for constraints on Iran’s nuclear program, the Obama administration has determined that U.S. companies would remain prohibited from conducting business in Iran. By limiting interaction between the U.S. and the Iranian private sector, Washington ensures that Iran will continue to see it as a hostile superpower determined to stunt its economic development. Instead of encouraging Iran’s reform, it encourages Iranian antipathy. This policy does not serve long-term U.S. interests, insofar as commercial trade with Iran can be a precursor for better political relations between the two countries.

Two decades ago, President Clinton imposed a trade embargo on Iran in order to set an example for U.S. allies, including Japan and Germany. Few U.S. allies were listening to Washington’s recriminations about trade with Iran so long as the U.S. itself continued to have limited dealings with Tehran. Thus, the Clinton administration decided to cut off all trade-related dealings with Iran to prove its point. Even as sanctions on Iran’s nuclear program tightened, the U.S. allowed for narrow exception for humanitarian trade of food and medicine.

At the time, this policy had internal coherence: the U.S. limited its dealings with Iran in order to better persuade its allies to do the same. But now, at a time in which the U.S. is opening the door for European and Asian firms to resume trade relations with Tehran, the maintenance of the U.S.’s trade embargo with Iran lacks justification. Indeed, by conceding to Europe and Asia a vibrant, emerging economy of 80 million people who long for iconic American brands, such as Apple and Ford, the U.S.’s policy of isolating Iran harms U.S. strategic interests and effectively surrenders the Iranian market to America’s economic competitors for the next generation.

The time is thus ripe for Washington to develop a new outlook towards Iran – one in which economics facilitates an evolution of political relations. The example of Nixon’s policy of “containment without isolation” towards China should be a guidepost for the Administration in determining next steps in its dealings with Tehran. Nixon believed that lifting parts of the trade embargo with China would demonstrate to China’s leadership American intentions to take the relationship in a new direction. As Obama is today, Nixon was lambasted by the hard right, and yet he pressed on.

Previous administrations have struggled to change the tone in the relationship with Iran, but none have had the advantage of a historic nuclear deal with which to do it. As the president himself has said, “The United States is powerful enough to be able to test these propositions without putting ourselves at risk.” Following more than three decades of isolating Iran, it is time to test the proposition that Iran’s re-integration into the global economic order is more valuable to America than Iran’s continued isolation on the world stage.

This post originally appeared in The Hill. 

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