Newspaper article The Christian Science Monitor

Sanctions against Iran Sting US Businesses More

Newspaper article The Christian Science Monitor

Sanctions against Iran Sting US Businesses More

Article excerpt

Iran-bashing has been easy and popular in Washington for years, but unilateral American sanctions meant to punish Iran for alleged support of terrorism may be backfiring.

Iranians say that the US policy of isolating Iran - which includes two sets of sanctions imposed in 1995 and 1996 - is harming American business interests instead, and yielding no political change.

Sanctions have kept US companies from lucrative oil and gas contracts, meant giveaway losses to foreign competitors, and made Iran more self-reliant. And sanctions that target foreign companies investing more than $40 million in Iran's energy sector - billed by President Clinton as an "antiterrorist" measure - have left even staunch US friends fuming. Turkey, a NATO member and close ally, nevertheless signed a $20-billion gas deal with the Islamic Republic last year, and European allies maintain a "critical dialogue" and tight business links with Iran. Iranians say that, except for higher prices on American goods smuggled in from the Persian Gulf port of Dubai, and the replacement of US capital investment with foreign cash, they have suffered little. "Sanctions are an irritant, and no more," says a Western diplomat. In fact, Iranian officials contend that Iran has gained from US efforts to isolate it. Iran has had little problem filling any gaps:It has won guarantees for $5 billion in government-backed loans from Europe and Japan in the last 20 months alone. So far, Iran has experienced no fall in its oil exports, in part because a tight market has meant that when US companies turn elsewhere for crude, Iran can fulfill the needs of customers who had previously lost out to the Americans. America's loss, Europe's gain Though it will be several more years before the impact of the $40-million rule will be known, oil analysts say, Iran's energy industry is opening up. "Now we talk more openly {with other countries} about joint operations, and Iran wants to show that it is able to go ahead without US help," says Faradoun Barkeshli, an oil expert with the Institute for International Energy Studies in Tehran. "Sanctions have softened and liberalized Iran's oil outlook," Dr. Barkeshli says. Lessons of "crisis management" learned during the Iran-Iraq war of the 1980s, when oil facilities were primary targets, are paying off. But American companies have been unable to take advantage of the opening. A $600-million contract awarded to the American Conoco company for an Iranian gas project in 1995 was nixed by Washington, then granted to a French company. The resulting resentment among US businessmen prompted a policy review late last year that has yet to be revealed. But the worldwide cost of sanctions has been high for the US, and had little effect on target countries, says a recent National Association of Manufacturers report to Congress. …

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