By Hossein Askari

How to counterbalance sanctions for the future

July 15, 2022 - 16:30

Iran was entirely compliant with the nuclear agreement (JCPOA) signed by President Obama and ratified by the United Nations Security Council; nevertheless, Trump tore it up.

The economic sanctions relief that was due to Iran was rescinded and Trump piled on more sanctions, ordered the assassination of Iran’s general Soleimani, and designated its Revolutionary Guard as a terrorist. Yet Iran continued to keep up its end of the deal for some time before deciding that enough was enough.

Now that indirect negotiations have resumed in Qatar, the U.S., the country that recanted the agreement, is unwilling to make meaningful concessions for its restoration.

A simple restoration of the agreement will do almost nothing for Iran. Iran has paid a heavy price for Washington’s scrapping of the agreement. Iran will not get the sanctions relief it expects. Major companies will not make long-term and significant investments in Iran because they fear future U.S. sanctions, possibly under a new administration with another abrogation of a new agreement. Similarly, commercial banks are unlikely to extend financing on favorable terms given the continuing uncertainty. Any concessions Iran gets will be short-term, such as gaining the ability to open up its oil to more export markets. This would be oil that is much needed by the world, and yet Iran would have to submit its nuclear facilities to intrusive inspections and limit its nuclear progress.

Iran should not go back to the JCPOA without legitimate demands. Trump’s nullification of the agreement has caused irreparable human and economic harm to Iran. Iran should demand compensation for the damage along with much stronger financial guarantees against new sanctions and any potential unilateral annulment of the re-established agreement. Such compensation would be tantamount to reparations due after a war and these guarantees would simply serve as insurance.

In parallel, Iran should spearhead an association of like-minded countries to challenge the legal basis of sanctions at the International Court of Justice and to initiate a counterbalance to sanctions. Are sanctions legal without a formal declaration of war? Do sanctions contravene the Articles of Agreement of the International Monetary Fund? Do sanctions violate clauses of the World Trade Organization? In addition to legal challenges to sanctions, recognizing that only the powerful or modern-day imperialists use sanctions to subjugate weaker countries, the association of countries could form cartels around a number of commodities needed by the powerful, such as rare earth elements—if the powerful impose sanctions, then there would be an automatic response.

Some would respond that Israel and the U.S. would bomb all of Iran’s nuclear facilities and maybe Iran’s non-nuclear infrastructure. This is the same U.S. that has not been willing to support a nuclear-free zone in the Middle East (West Asia)—a goal supported by Iran and numerous other countries, with, of course, the exception of Israel. If the U.S. starts a war, it would boomerang on the U.S. and its allies in the Persian Gulf.

Today, the U.S. is in no position to ignite a regional war. Such a war could bring in Russia and China; a war with the background of the Ukraine war and Europe under threat.  There are ominous signs elsewhere, as China flexes its muscles in the Pacific, worldwide economic turmoil with high inflation, and food and energy shortages. And as always, with potential upheaval in a number of Arab countries as the U.S. pressures Arab governments to embrace Israel while it builds more illegal settlements on Palestinian lands, making a two-state solution near impossible. 

This may be the best time for Iran to challenge U.S. hegemony in the Middle East (West Asia).

Hossein Askari is an Emeritus Professor of Business and Int. Aff., George Washington University


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