How can Iran be persuaded to make another deal?

Washington says that US sanctions will not be lifted until “Iran’s behavior” changes. Esfandiar Batmanghlich explains in an article for Bloomberg how sanctions are effective and how to bring Iran back to the negotiating table.

Esfandiar Batmanghlich, an Iranian-American, is one of the economic activists who entered the Iranian market after the nuclear deal and began working with major companies such as Airbus, Cisco, Total, and Citigroup. In a detailed article for Bloomberg, he explained that the return of US sanctions against Iran will not work to bring Iran back to the negotiating table - as Trump administration officials want.

The US Secretary of State has threatened that US sanctions on Iran will remain in place until the Iranian government changes its behavior. The US President says the nuclear deal with Iran was the worst deal in US history and his administration is now seeking a better deal with Iran.

This statement means that in order to be free from sanctions, the Iranian government must comply with US demands regarding its missile program, relations with militia groups supported by the Islamic Republic, and stricter controls on Iran's nuclear program.

Esfandiar Batmanghlich wrote in his article for Bloomberg that these demands do not seem achievable. He wrote: The US believes that by increasing economic pressure on Iran, the Iranian people will put pressure on the government so that the government is forced to return to the negotiating table and negotiate to reach an agreement. But the problem is that lifting sanctions will not lift a huge burden from the shoulders of ordinary people, and the prospect of lifting sanctions in the future is not clear, and Iranian politicians do not believe that the US will fulfill its commitments.

According to this economic activist, the big problem America has with sanctions is that their impact is not completely eliminated even after the sanctions are lifted, and as a result, the credibility and ability of the US government to re-apply them is not effective.

He says that the Obama administration failed to help Iran reap the benefits of sanctions relief after the nuclear deal, partly because US government officials, who had been warning against doing business with Iran for months, had little credibility to encourage businesspeople to cooperate with Iran after the nuclear deal.

Now, the Donald Trump administration hopes that the US's secondary sanctions against Iran will bring the Iranian government to its knees, but the reality is that Iran has been struggling with sanctions for years, and sanctions are part of the country's daily reality.

Esfandiar Batmanghlich believes that the removal of sanctions will be important in future negotiations between Iran and the United States, and that the stick of sanctions will be effective only when cooperation to eliminate the impact of sanctions is the sweet carrot.

In his article for Bloomberg, he wrote: "Before imposing sanctions on any country, the United States should have a new mechanism in place that will be effective when sanctions are lifted." He believes that such a mechanism should be based on three pillars:

First: The psychological impact of sanctions must be addressed. A year after the nuclear deal with Iran, non-US banks were encouraged to do business with Iran, but there were no guarantees for US banks in this regard.

Second, the United States should have resources available to help target countries address the impact of sanctions on government institutions, namely reducing trade capacity and facilitating investment after years of economic isolation. For example, a new agreement with Iran should include technical assistance to help the country join the World Trade Organization and other institutions that govern global trade and investment.

At best, the United States should commit to increasing its trade by investing in a previously sanctioned country to help offset the economic growth lost due to sanctions. This is difficult to achieve, however, because the US government has limited ability to persuade US companies and investors to cooperate with other countries, especially if those countries have a history of hostility towards the US.

And finally, the US can and should have programs to help those who are hurt by sanctions: the poor. For example, after the nuclear deal with Iran, Europe allocated 50 million euros to support development projects in Iran. A significant commitment from development cooperation organizations such as the US International Exploration Agency would encourage other countries to support Iran and send a reliable message to investors.

Esfandiar Batmanghlich wrote for Bloomberg: “Achieving these goals will require the formation of new management teams in the Treasury Department, the State Department, and the Commerce Department, ideally supported by new assistance from Congress.”

He believes that until such tools exist, there will be no new deal with Iran and the United States will face sanctions with resistance from the country's allies and opponents.

He also wrote that it is currently highly unlikely that the US government will heed such advice, and that the situation will not change until the current situation does not have a political cost to the Trump administration and does not put significant pressure on the US economy. But when the next US president is forced to repair the damage caused by the Trump administration's policies, he must first prove that the US is capable of doing so.

Source: DW