Powerful Us Trade Lobby Urges an End to Iran Sanctions

By Luxner, Larry | The Middle East, May 2001 | Go to article overview

Powerful Us Trade Lobby Urges an End to Iran Sanctions


Luxner, Larry, The Middle East


From a nondescript office at 16th and K Streets in Washington DC, a little-known lobby backed by big business is working hard to abolish US trade sanctions against some of the world's most despotic regimes.

The National Foreign Trade Council (NFTC) says the United States currently imposes sanctions of one form or another against 70 countries, with `significant' sanctions against seven nations: Afghanistan, Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria.

J Daniel O'Flaherty, vice-president of the NFTC and executive director of the US-South Africa Business Council, says that while refusing to trade with these countries may make people feel good, in economic terms these sanctions are not only ineffective but counter-productive.

"The United States pays a high cost for these sanctions," he said, citing a study by the Institute for International Economics that claims sanctions deprive the US economy of 25,000 jobs and at least $15 billion a year in lost business.

"We don't dispute that sanctions are a useful tool. We do dispute that they are a universal solution to a foreign-policy dilemma," said O'Flaherty. "China, for example, is a repressive dictatorship. It is also a very important country, clearly in transition to something else, but we don't know to what. So, the question is how do you best influence them, by isolating them or by engaging them? Our answer is obviously the latter."

The NFTC, supported by 550 member companies, is now working hard to have sanctions against Iran lifted.

"In January 1995, our members expected that a Republican Congress would be more friendly than a Democratic Congress, and were therefore surprised when that turned out not to be the case," said O'Flaherty, explaining that US economic policy toward Iran is governed by two laws: executive orders dating from 1995, which President Bush renewed in mid-March, and the 1996 Iran-Libya Sanctions Act (ILSA), which was imposed on the two Muslim countries as punishment for supporting anti-Israel terrorist activity.

O'Flaherty says the two regulations constitute a "double barrel" devised by the influential American-Israel Public Affairs Committee "for the purpose of excluding foreign oil and gas firms from Iran and Libya in order to deny them dollars for developing weapons of mass destruction."

Under ILSA, the US government may levy penalties against foreign companies that make annual investments of more than $20 million in Iran's oil industry, though the Clinton administration waived the penalties in every case, arguing they could damage relations with key allies of the United States.

ILSA comes up for renewal on 5 Aug, and according to the Washington Post, many analysts believe Congress will allow it to expire or modify it to focus the embargo more narrowly around weapons-related materials. The Bush administration is considering similar changes to United Nations sanctions against Iraq.

The NFTC's 2001 agenda therefore consists of two efforts: first, lobbying against renewal of the extraterritorial sanctions imposed by ILSA; and secondly, urging the Bush administration to change the 1995 executive orders that prohibit most trade and investment with Iran. Both efforts involve engaging policy-makers and elected officials on the longterm benefits of more normal commercial ties with Iran, and the cost and ineffectiveness of the current unilateral sanctions policy.

"Iran is a very big country, Libya is somewhat less important, and Iraq is a special case," says O'Flaherty. "Our job is not to show that these countries are not that bad. US policy toward Iran should not be contingent on its domestic policy (either Iranian internal issues or the Arab-Israeli conflict). …

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Powerful Us Trade Lobby Urges an End to Iran Sanctions
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